The much larger hurdle facing contemporary liberalism is the need to reconfigure the welfare state in ways that maintain popular support while addressing a host of conflicting forces:
The aging of the population is steadily reducing the ratio of workers to retirees, expanding the “dependency ratio,” even as global competition drives governments worldwide to reduce corporate and individual taxes, cutting off the revenues to finance social welfare spending.
Other demographic trends, particularly the erosion of supportive extended family networks and the rising numbers of single elderly, serve to increase the demands for benefits from the welfare state.
Austerity policies enacted in response to high deficit and debt levels have resulted in increased voter suspicion of the “undeserving” poor and of “free riders” who are perceived as getting more out of government programs than they pay in, weakening support for the welfare state. Similarly, means testing old-age income security initiatives – particularly Social Security –would inevitably undermine universal support.
