The larger context is that society is a give and take. I have an old, likely out-of-print, book called "Your Rugged Constitution" that I got from an old Marine. What I like about that book is that it frames each part of the Constitution, not just in terms of what one gets from the government but also what one is expected to give up. I get concerned when people only focus on one side of that equation.
I don't think it should be used as a catch-all, but as a reasoned and balanced approach. It may be used as a justification for "government control", but hopefully people recognize that there is an expectation for something to be received in terms of what was given. It's up to society to determine whether that's a good trade, not to automatically disregard the option because of some "government control" boogeyman.
Take the Fed which is such a big part of this discussion. Society gives the Fed certain levers to affect the economy and monetary policy. In return, society gets more stabilized unemployment and inflation to limit boom/bust cycles. Society has determined that is a reasonable tradeoff. Likewise, we give the Congress the ability to levy taxes and in exchange we expect to be provided common defense and general welfare.
>Has welfare been in some way proven to increase stability? Seattle, Portland, and SF all have strong welfare programs, but they seem to me to currently be much less stable than other cities.
It gets harder to study because of the larger number of confounding factors as you get to larger groups (city, state, or federal levels). There's certainly evidence that social safety nets provide stability at the family level and evidence that safety nets like unemployment insurance enhance stability as well.