wildbourgman wrote:2. The breakdown of the family unit, due to welfare taking the place of the family.
If you rely on the "family" unit you lose geographical mobility of the work force. One of the most important strengths of the American work force: its ability to travel to seek out the best work conditions.
You also will see a huge amount of money sucked out of circulation as people have to have large reserves available in case of job loss or so on. This is the "paradox of thrift", you end up with so much money being saved its a major drag on the economy and reduces the flow of capital to productive and risky enterprises.
Also countries with far more generous welfare programs have less issues with structural unemployment. I strongly suspect the failure is the underfunded schooling system that is maladapted to the low income urban poor, where the most resources should be targeted. A huge wealth of human capital is left to rot in the US ghettos.