Equality, Efficiency, and Dependency

Countries run more efficiently when there is less government intervention. Government certainly has its role in providing a strong military, adequate border defense, police and fire protection, and education.

Unfortunately government intervention in the free market has caused again and again more harm than good. And government has now become a Hydra that we fail to legally slay. Voting in a new government has been discouraging; it is now impossible to rid ourselves of the encroaching octopus with sharped-edged suckers.

Contrary to economic laissez faire, President Bush said in 2008, “I’ve abandoned free market principles to save the free market system.” In other words, because his administration attempted unsuccessfully to reign in the Democrats with their entitlement plans to lend money for homes to people who could not afford them and then disabled regulations that would have checked bank loans and mortgages, he had to prop up the too-big-to-fail bankers whose bankruptcy would have sent painful shockwaves around the world and would have upset the crony capitalists. The taxpayers were forced to the rescue.

The non-stop tirade of the “rich do not pay their fair share” and “you did not build that” began the vilification of small and large businessmen, followed by the marginalization and destruction of the middle class, the very geese that lay the golden eggs. The government nanny must be in total control of every facet of our lives.

Productivity, the industrial revolution, manufacturing are better left to other parts of the world. The new global order dictates that we must now be a service society, government-catering to the “hope and change” new citizens coming from far-flung corners of the illiterate third-world kingdom.

You can’t make a “living wage” at your minimum-wage job? It’s the fault of the rich! You vote for a living, stay on welfare, have out-of-wedlock babies, drop anchor-babies, and keep bringing in the flotsam of the world to replace the millions of babies aborted since Roe v. Wade. Make sure you vote into office the same corrupt politicians that keep you perennially poor under the guise of protection; you are dumb enough after graduating from a Common Core school to believe that it’s the fault of the rich who keep you “down.”

Do you accept any personal responsibility for your boorish behavior, drug use, lack of motivation, poor education, sloth, and lack of job skills? Nanny government tells you it is not your fault; you are entitled to the wealth of the rich. And when the rich run out of money, because socialists always run out of other people’s money, they can fleece the middle class, people who worked hard for a living, got an education, and paid taxes.

Today’s rich pay taxes to support the government and the welfare state.  The rich of long ago, after taxation, even though still wealthy, did not enjoy the comforts that you have in your alleged poverty of today. In the winter of 1695, when the climate change industry did not exist, the wine at the palace of Versailles froze in the fancy goblets at King Louis XIV’s table. Even in the nineteenth century America, the ink froze in the inkwells in winter time, that’s how cold and miserable life was.

The Pennsylvania legislature almost destroyed George Washington’s army quartered at Valley Forge. The government decided to try price controls on commodities that were needed by Washington’s army. No farmer with a large family to support was dumb enough to sell their produce at controlled prices when the British were paying in gold. The army almost starved to death in the winter of 1777-1778. The unwise government price controls brought the army to its knees.

Government does not believe in Adam Smith’s “invisible hand;” there is no such thing as people, by pursuing their own self-interest, are led by an invisible hand to promote the well-being of the community. The government must intervene because they know best.

If government does not dictate every last rule and regulation in great detail, how much and what we can eat, what we can drink, how much salt we can ingest, what doctors we can see, what homes we can live in, what cars we can drive, how much electricity we use, how much water we can have, what crops to plant, we are doomed to failure.

To avoid massive voter fraud, by the time the drive for a national “voter” I.D. becomes reality, we will all be chipped and the government will know where we are at all times, just like dogs and cats.

Government intervention to slay the war on poverty has perpetuated and deepened poverty after spending trillions of dollars. In spite of Affirmative Action programs and other wealth redistribution schemes aimed at destroying social injustice, people are still differently-abled by birth; some like to work more than others; some are risk takers and others are comfortable in their status-quo; some like to work the night shift while others no shift at all, they are happy with government handouts; some like to go to school and learn new things, while others enjoy partying and living it up; some don’t stay  on any job long enough to get work experience; why try if welfare is literally forced upon the sloth and unmotivated; some have inherited wealth that must be confiscated for the common good; others who built an enterprise did not really built that, it just happened by magic, it came via the public roads; and others were just plain lucky and thus does not deserve the fruits of their labor.

Keynesian economists have been telling us for decades that “America has more income inequality than other wealthy nations” and this miscalculated inequality “has been on the rise in the last 25 years.”  But none of these calculations include welfare, free medical care, WIC, and other similar programs. They are strictly looking at income disparities born by many factors connected to lacking personal responsibility, education, and the dissolution of the family.

You can tweak statistics to prove whatever you set out to prove so calculations of this “inequality” does not include the many financial dependency programs currently in place. According to the U.S. Census, there are over “100 million Americans who receive at least one welfare program run by the federal government and it does include Social Security and Medicare.”

Even Keynesian economists admit that policies that redistribute wealth or income reduce the rewards of high income earners, raising the rewards of low-income earners, thus reducing the incentive to earn high income.  We trade economic efficiency for equality and create a nation of dependents who would rather stay home and draw benefits from those who still work.

It is a fact that 70 percent of all government spending involves programs that create government dependence. According to the Congressional Budget Office, 60 percent of all U.S. households get more transfer payments than they pay in taxes.  “Terrence P. Jeffrey calculated that 86 million Americans work full-time in the private sector while 148 million Americans receive benefits from the government.” http://endoftheamericandream.com/archives/18-stats-that-prove-that-government-dependence-has-reached-epidemic-levels

Education was for many generations a way out of poverty when the family was intact. But when the family unit was destroyed by a government that stepped in as the daddy for generations of fatherless children, college costs have escalated, and professional jobs were shipped overseas at an alarming rate, it was hard to sell education anymore.  Government and Democrats have advocated spending more money on pre-school programs and on inner-city children but the results were dismal. And the uneducated adults could not be lifted out of poverty; they remained on inter-generational government dole.

We have certainly tried for generations to alleviate poverty through the Civil Rights Act of 1964 which outlawed forms of discrimination in rates of pay and hiring standards and established the Equal Employment Opportunity Commission (EEOC). Equal pay for equal work was a daunting if not impossible parameter because we are different in our ability, education, experience, etc.  Affirmative action stepped in with hiring quotas for minorities and females.

The problem was that many who were given this preferential treatment over other hires were really less qualified or not qualified at all. They were expected to learn on the job. Critics argued that numerical quotas and compulsory hiring of unqualified workers was certainly a problem in many professions, including the field of education. Replacing qualified “white males” with “other, less qualified workers” was certainly counterproductive and inefficient. Proponents of quotas countered that it was necessary to redress past wrongs, especially slavery. “Putting more women and members of minority groups into high-paying jobs would certainly make the income distribution more equal,” affirmative action supporters argued.

Today the important economic balance of efficiency over equality is completely discounted by Democrats and their supporters who are arguing for a complete replacement of the free market system with socialism on the ideological belief that everything white men have accomplished has been tinged with racism, bigotry, and inequality and only adopting the Marxist ideology would redress that problem. Certainly these Democrats have not studied the recent case of Venezuela and its economic woes resulting from a full-blown socialist poverty state established by the late Hugo Chavez.

There is a lot to be said about government control from cradle to grave.  A population fully dependent on an omnipotent government is easier to control in a high-rise city dwelling setting than spread out over miles on the land. And when government runs out of other people’s money, it will have to scale back and possibly withdraw the largesse to the generationally dependent.

The free market mechanism is efficient but it does not promote the total equality desired by Marxist supporters. Such equality must be achieved by force, by government fiat, redistributing to the world the “unjust and unearned income and wealth” of billions of enterprising people.  When that is achieved, we will have reached Orwellian utopia.

Lucky for us, total government control works because they know what is best for us – nuclear armament of Iran, our sworn enemy, and a peaceful invasion with illegal immigrants brought from third world nations that will quietly complete the fundamental transformation of our expansionist evil empire into a malleable tin pot dictatorship.

We will be turned into an irrelevant impoverished nation as envisioned by the Washington political elites, a nation ruled by a one-party government that worships primitive cultures and obedient welfare-dependent subjects and favors global economic de-development.

The low information voters and welfare recipients will be satisfied with a minimum, grateful that the “man” sends them a check every month in exchange for nothing. The fact that governments do not produce anything of value seems to escape their understanding and, without the hard labor of many, their undeserved and unearned “entitlements” would not arrive promptly every month.

 

 

 

 

 

The Starving Goose

My friend sent me a story that explains quite succinctly what happens to people who are so eager to become enslaved to more government and to communist utopia.

A famous communist leader, having been aided by western powers to amass a sizable portion of a continent, gave his underlings a valuable lesson in power and control. He asked them to convene at his palace. His lecture was going to be taught just once – his time was too valuable to waste. The apparatchiks were directed to bring a goose to the seminar.

Each acquired a bird, built a sizable cage to house it, and proceeded to feed it well. On a given day, all gathered in the grand ballroom of the palace, carrying various cages.

Arriving fifteen minutes late for good measure, the leader entered the grand ballroom followed by a very thin goose. With each step he took, the goose reached in his pocket, begging for grain. Magnanimously, and with studied aplomb, he fed it one single grain from time to time.

The underlings stood up and congratulated each other for being there, applauding the presence of the great one. The dear leader asked them to open the cages and to release the geese. As soon as the geese sensed that the cage had been unbolted and they were free to go, the birds took off, ignoring their masters.

The only bird left was the dear leader’s starving goose. Ever so attentive, she looked up to him with a sad face, waiting for her master to dispense one single grain of food.

“Do you see what happened if you fed them too much? They forgot who you were and no longer recognized you as their master. My faithful goose, fed just a few grains a day, enough to keep her from starving to death, is the most loyal bird.”

The abject lesson of near starvation and meager dependency was the dear leader’s recipe to lead a nation of blind followers.

 

Bad Economy, Bad Policy, More Poverty and Welfare Dependency

Poverty is a relative term. Some people understand poverty as cash poor, not having the latest electronic gadget, a huge house, or not taking an expensive vacation. Others think of themselves as poor because they fall behind a certain standard of living that they deem desirable. A third group of Americans may think they are poor because they fall behind the average income in the country. People confuse and interchange wealth, income, and cash constantly.
 

The figures listed below are the 2012 federal government’s poverty guidelines. However, they are not the figures that the Census Bureau uses to calculate the number of poor persons. The Census Bureau uses poverty threshold data based on gender, size of family, number of children, farm, and non-farm.  (http://www.census.gov/hhes/www/poverty/data/threshld/index.html)

 

2012 Poverty Guidelines for the 48 Contiguous States and the District of Columbia
Persons in family/household	Poverty guideline
1	$11,170
2	15,130
3	19,090
4	23,050
5	27,010
6	30,970
7	34,930
8	38,890
For families/households with more than 8 persons, add $3,960 for each additional person.

                                        (http://aspe.hhs.gov/poverty/12poverty.shtml/)

According to Michael Tanner, “The poverty rate has risen to 15.1 percent of Americans, the highest level in nearly a decade…Welfare spending increased significantly under President George W. Bush and has exploded under President Barack Obama.”  Since Obama took office, federal expenditures on welfare have increased by 41 percent, more than $193 billion per year. (Cato Institute, The American Welfare State, April 11, 2012)

Forty-six million Americans live in poverty, even though the government spent more than $15 trillion on welfare since President Lyndon Johnson enacted the war on poverty in 1964. We lost all battles because the federal government was not serious about winning this war, it did not concentrate on fixing the problems by adding jobs to the economy that created prosperity. We outsourced jobs, we “saved or created’ shovel-ready jobs for bureaucrats, and we made poverty comfortable and dependable for an increasing sector of the population.

If we compare these 46 million poor Americans to other nations, their poverty is considered comfortable in most places around the world and well-off in many other countries.

That is not to say that there are no Americans who do not genuinely need help. The lengthy recession born by the bursting of the housing bubble, the subsequent TARP, the failed stimulus, auto bailouts, the mismanaged economy, the crony capitalism, created real victims who lost their homes, their jobs, their insurance, and their livelihood. They did not deliberately “purchase” a home that they knew they could not possibly afford to repay, nor engaged in complicated derivatives trading with other people’s retirement money and savings.

Yet some Americans who truly needed help were reluctant to accept welfare or, if they did, the benefits were inadequate or ran out. There are always Americans in temporary or permanent need who fall through the cracks of welfare. It is people who know how to milk the system who benefit the most from the welfare largesse.

Being on welfare is not just the result of lack of a good education, bad choices in life, unwillingness to work, of a culture of entitlement (it is free and the government owes it to us), it is also a function of bad luck, personal injury, illness, and hard times during cyclical economic downturns.

The federal government uses personal income tax receipts to provide two-thirds of welfare funds, while state and local governments provide one-third from state tax receipts. Economically speaking, welfare is categorized as transfer payments.

 
The largest transfer of payments (welfare) goes to Medicaid, food stamps (SNAP), Supplemental Security Income (SSI), Earned Income Tax Credit (EITC), Temporary Assistance to Needy Families (TANF), housing vouchers, State Children’s Health Insurance Program (SCHIP).

Medicaid spent the most on health care in 2011 - $228 billion for 49 million Americans. Food stamps or the Supplemental Nutrition Assistance Program (SNAP) was the second largest expenditure in 2011 with $72 billion for 41 million Americans. This year, 43 million Americans are on food stamps thanks to our tanking economy under the leadership and guidance of the current administration. According to Michael Tanner, Director of Health and Welfare Studies at the Cato Institute, federal spending on welfare rose 375 percent since 1965. Total federal welfare spending rose from 2.19 to 6 percent of GDP.

Since the inception of the War on Poverty, the federal government created 126 anti-poverty programs. There are some with overlapping missions:

-        33 housing programs administered by 4 different cabinet departments

-        21 food assistance programs administered by 3 different departments and one agency

-        8 health care programs run by 5 different agencies at HHS

-        27 cash/general assistance programs run by 6 cabinet departments and 5 agencies

“All together, seven different cabinet agencies and six independent agencies administer at least one anti-poverty program.” (Cato Institute, The American Welfare State, p. 3)

Keynesian economists suggested that a better way to tackle poverty was to give income to the poor without destroying their incentives to work via the earned income tax credit (EITC). As earnings of a family rose to a certain level, the federal government gave them a supplemental “grant,” proportional to earned wages. EITC began in 1975 but became increasingly more generous since 1993, giving income-support to over 22 million families. (Baumol and Blinder, Economics, 2007, p. 458)

We do know how well EITC works since illegal aliens, using an IRS issued number to encourage them to file income taxes, have taken advantage of this IRS loophole, raking in $6.3 billion a year in tax refunds, claiming children who are not even residents or citizens of this country.

Cato’s Michael Tanner suggests that making people more comfortable in poverty and government dependence is a bad idea - more food, better housing, more health care, free day care, etc. The solutions to get out and stay out of poverty:

1.     Finish school

2.     Do not get pregnant outside marriage

3.     Get a job, any job, and stick with it.

 The Temporary Assistance for Needy Families (TANF), a very successful program from the Clinton era, was recently changed by a directive from President Obama to the HHS, from a cash safety net for families in need via a welfare-to-work program that promoted employment, into a funding source for idleness and stay-at-home permanent welfare voters.

“The broad purposes of TANF specified in the law:

-        providing assistance to needy families so that children could be cared for in their own homes or in the homes of relatives;

-        ending needy families’ dependence on government benefits by promoting job preparation, work, and marriage;

-        preventing and reducing the incidence of out-of-wedlock pregnancies; and

-        encouraging the formation and maintenance of two-parent families.”

(Kay E. Brown, Director of GAO, Testimony before the Senate Finance Committee, June 5, 2012)

 
Jonathan Alter, a left-wing writer, described in his book, The Promise, a short exchange that happened during President Obama’s first year in office:

“A congressman approached the first lady at a White House reception after the [stimulus] bill’s passage and told her the stimulus was the best anti-poverty bill in a generation. Her reaction was ‘Shhh!’ The White House did not want the public thinking that Obama had achieved long-sought public policy objectives under the guise of merely stimulating the economy, even though that’s exactly what happened.”  (As quoted by Paul Mirengoff in Powerline, July 30, 2012)

While we are $16 trillion in debt, with more Americans applying for disability than applying for jobs, the USDA’s “Reaching Low-Income Hispanics with Nutrition Assistance webpage states:

“USDA and the government of Mexico have entered into a partnership to help educate eligible Mexican nationals living in the United States about available nutrition assistance. Mexico will help disseminate this information through its embassy and network of approximately 50 consular offices.”

The USDA-Mexico partnership was signed in 2004, under President George W. Bush, by former USDA Secretary Ann M. Venemen and Mexican Secretary of Foreign Affairs Luis Ernesto Derbez Bautista. This begs the obvious questions, why does Mexico need 50 consular offices in the U.S. when all other countries have only one consulate, and why are we responsible to feed Mexican nationals, including illegal aliens with their anchor babies?

Eradicating poverty should be more than just streamlining welfare – it should be about fighting the real causes of welfare dependency: the breakdown of families, rejection of faith, truancy, dropping out of school, having babies outside of marriage, drug use, crime, and lack of personal pride, responsibility, and accountability for one’s actions. Spreading the wealth, the socialist goal, is a dystopia that will further enslave people into perennial poverty.

Representatives Jim Jordan and Steve Southerland II suggested, “Congress should block-grant the [welfare] funds to states and let them innovate. Grass-roots organizations and state and local leaders know better than Congress what works in their communities.” Follow the model of Habitat for Humanity that requires families to put in “hundreds of hours of sweat equity before getting a new home.”

Taking care of the truly needy and disabled is the right thing to do in our civilized society. Taking advantage of a system that has gone beyond generosity and making welfare a life-style choice and career opportunity is honor-less.