During World War II, a British clergyman gave a speech in which he contrasted the “warfare state” of Nazi Germany, dedicated to conquest, with Britain’s “welfare state,” dedicated to serving the welfare of its people. Since then, the term welfare state has come to refer to the collection of government programs that are designed to alleviate economic hardship. A large share of the government spending of all wealthy countries consists of government transfers—payments by the government to individuals and families—that provide financial aid to the poor, assistance to unemployed workers, guaranteed income for the elderly, and assistance in paying medical bills for those with large health care expenses.