"...a babysitting co-op for working mothers."

That says it all. You obviously cannot think beyond your mouth.

If they are working, who will be the babysitters?

I guess you expect that they will arrange their working hours to suit the babysitting arrangements. Dream on.

How about govt. subsidized daycare? The govt. could offer incentives to employers to offer on-site daycare or they could offer direct subsidies to parents.

...and Dickey, the reason the Taiwanese family has the option of working at home is because that kind of job is outsourced by the U.S. You'll have to think a little more creatively if you want to offer an alternative to staying at home to care for your own children while collecting welfare.

In fact, staying at home with your child (welfare) until the child is school age is probably a very good solution to the problem. When the child enters school, mom could be given subsidized training and/or education in addition to after school daycare.

That would help but it still does not account for the huge number of people with mental health issues that deserve better care than they are receiving.