I look upon the above as a description of the rise of the welfare state, coupled with a breakdown in personal morality and of the concept of the family unit, followed by eventual implosion. The following opinions are going to sound very sexist: it's from observation here in NZ, I cannot speak for other countries.
We have the current institution of "welfare mothers". When certain segments of society have a financial incentive to have multiple children and no husband, they will have kids. The nominal "husband" is typically a live-in boyfriend of the moment. (I know, not all women are like this! Only certain types will follow this path.)
Said children don't have great role-models while growing up (deadbeat mothers and fathers). This often results in higher crime. (I'm tempted to say self-perpetuating, yet at least it's a trend.)
People with different standards (generally the more hard-working types) look at this, shake their heads, and move elsewhere. With them goes a large chunk of money which would otherwise have gone into the local community. Things start going downhill faster.
The government raises taxes so that they can pay these deadbeat types. People with money restructure their affairs to shield themselves, or move out of the country(!) - lower tax revenues, more wealth gone: from the wider community this time.
The higher taxes make things more difficult. There is less incentive to earn (if I decide that I want to earn more money, then slightly over 50% of anything extra over the current goes in taxes and levies). It is also difficult to set up new business, which makes less jobs available in the community for people to earn a living from.
Eventually you end up with fraud and capital flight coupled with a collapse of government. Your social structure implodes, violence due to desperation, etc etc. A nasty macro-trend for smaller countries (that we've seen overseas, cf the book Secret Money). Remember though: in the end,
nothing is too big to fail.
That said, the NZ government has made a recent change in an attempt to stop this cycle. Welfare for mothers with one child only (that could be an honest mistake) and nothing for those who have more than one child (a trend that they want to nip in the bud).
I personally think that the effect will not be what they hope. What I think will happen is a declining birthrate instead, below sustainability for the country, coupled with a rise in immigration to keep the numbers up. We'll be importing people from overseas to keep ourselves going, and then bitching about the watering-down of our culture. It's going to be an interesting next couple of generations.
Personal thoughts for a solution: knock off as many forms of welfare as possible. Then you don't need to tax so heavily, because the taxes are only needed for actual basic infrastructure. Then people will be inclined to work more, and start more businesses, and build their homes and communities up. The concept of welfare mothers will die away due to lack of support.
*shrug* Just my 2cents, doubt it'll happen. Too much "what's in it for me?" in people's heads, they'll keep voting themselves more largesse from the government.
“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years.”
― Alexis de Tocqueville (1805-1859)