I’ll just toss in a couple of cents worth on the unemployment insurance debate. As the system is set up (another unhappy New Deal legacy), workers who have stable employment wind up subsidizing workers who have unstable employment, since the payroll taxes that fund the system ultimately come out of wages. It’s not necessarily true that stable employment means high earnings (think of Wal-Mart cashiers) or that unstable employment means low earnings (think of construction workers). Therefore, UI has quirky and indefensible redistribution effects, not to mention its incentives for gaming the system to squeeze out as much money as possible before seeking new employment.
If you go back before the days when government took over UI, there were private efforts to smooth the financial burdens on those who lost their jobs. Some unions took this upon themselves, but once they had a friend in the White House (FDR), they were delighted to off-load this responsibility to government. Also, there were attempts by some insurance companies to sell unemployment insurance, but they ran into opposition from “liberals” who wanted UI to be part of the government’s welfare apparatus.
