Don't think its that simple. I hear the pundits speak about how poor of a recovery we have from the "great recession" compared to previous recovery's and quote numbers to prove it. Its misleading. The economic landscape has changed drastically today from yester year. What is never mentioned is the fact that technology has given companies the ability to outsource a significant amount of their workforce as compare to 50 years ago. Mostly low/entry level positions. This undoubtedly impacts the poverty level. I cant deny that a side effect of public assistance perpetuate a pathology of dependency. There will always be a segment of the population that takes advantage of situations. However, by its very nature, a capitalist system will have a segment of its population in poverty, public assistance is not the cause, it attempts to be a solution. The question is then, how else should this population be addressed if you took away the safety net?
In the first place, capitalism is the greatest instrument of social change the world has ever known. It has brought more people more wealth and more prosperity than all other economic systems combined. Whereas the socialism so beloved by progressives purposefully killed twice as many people in the last century than died in two world wars: 30 million dead of engineered mass starvation in the Soviet Union; another 30 million "reeducated" in China; two thirds of the population murdered in Cambodia. So I find it hard to take you seriously when you talk about the "capitalist system," as if there's another alternative. There isn't. Sweden wouldn't exist today if not for NATO, paid for by capitalism.
As to the poor, the poor will always be with you. As to the social safety net, I don't deny that there are those who need charity and that in a civilized society there is an imperative to deliver charity to them. By all means feed the poor, treat the sick, accommodate the infirm. The question is how to best serve those in need, who should do the serving, and who should pay for it. In my utopia local charities would care for local needies through voluntary contributions - even I give money to charity and I hate everyone. (Also in my utopia my bong would have a vagina.) In a republic state and local governments would tend to deprived citizens through reasonable and fairly legislated taxation. In the US today charity is administered by a ravenous brobdingnagian federal bureaucracy that perpetuates poverty and despair in the name of compassion, as a means of usurping the liberty of its citizens, with the goal of making them its subjects. The worst of it is the incentivizing of single parent households, which by every metric is a plague upon children and communities.
As to the economy, there was in the past a great depression, various lesser depressions, a couple of world wars, a civil war, various other wars, a dust bowl, and floods of biblical proportion. At the beginning of the 20th century 100 million people - 5 percent of the world's population - died from the flu. (Fortunately capitalism found a cure.) If the greatest threat to its security this generation faces is outsourcing, that's a pretty sweet deal. If the current cadre of whiny progressives hadn't spent their childhoods wearing bicycle helmets while playing T ball and not keeping score having to work a minimum wage job wouldn't seem as onerous as it does.