I can't think of any country in the western world who has a social welfare system on the same low level as the US - and yet we don't have such a 'decline in social indicators'. Quite the opposite. And we are not perfect: the upcoming NZ election is pointing out all the remaining flaws in our society, along with futile attempts to fix them by empty-promising politicians. But no one would ever say we are not vastly better off than the average US citizen, so clearly 'social welfare' is not the problem.
Maybe having a society where a random illness or infection doesn't destroy you economically - unless you are slaved to your employer with health insurance - might help fix things? Or maybe endless foreign wars and an influx of PTSD veterans along with an outflow of patriotically brain washed kids is not healthy? Maybe a political system where a egotistical demagogue can hijack the government is a flaw to correct?