"Is a country really better off with an "everyone survives with a basic level of services, no matter how horrible their decisions" ethos or should a certain percentage be allowed to slip through the cracks as a way of encouraging everyone else to examine what they are doing and make better choices?"

What you're talking about here is Social Darwinism. That came long before Rand, during the gilded age in this country. It's all about justifying the uber-rich's lifestyle that requires thousands of wage slaves. The poor are just inferior people, so that's their station in life.

It's nice that you can believe that hard times only befall those that make 'bad choices', that it has nothing to do with external forces or bad luck. My experience has been that good people can have bad things happen to them, no matter how smart they are or how hard the work, or how good their choices seem to be.

A society is judged by the way it treats its infirm, elderly and the young. There is no room for compassion in either your or Rand's philosphy. It's one of mankind's better virtues. Selfishness and greed never will be seen as such.

Imagine a bunch of Randians in a foxhole. Her every man for himself philosphy wouldn't even work in wartime.