Choose Your Welfare System - RF Cafe Forums

Greetings:

Here is my latest "Kirt's Cogitation" column entitled "Choose Your Welfare System." Your comments are welcome.

Choose Your Welfare System

I will pose here a question with a seemingly obvious answer – a rhetorical one of sorts. Most likely to you and definitely to me, the answer indeed is obvious, but unfortunately for far too many, the answer is what is termed a non sequitur. Here is the question:

If you accept the fact that the government is going to extort outrageous tax dollars from the producers of society, would you rather that the money be spent distributing handouts to people who have no intention of contributing positively to the economy, or to companies who employ those willing to be productive and thus ease the overall burden on everyone?

Most politicians, whose primary function in life is, based on empirical evidence, to get elected and then remain in office, know from ample experience that rewarding certain types of bad behavior can have its advantages. For instance, if a lazy person knows that he can indulge his inclinations and is content with just eking out a continued existence, then he is happy to spend his days living off the hard work of others. If we are fortunate, he will at best cause no trouble for the rest of us beyond the bite he takes out of our paychecks. At worst – and this is all too often the case – his idle lifestyle will provide opportunity for causing mischief. That, of course, will require that more be withheld from our paychecks in the form of taxes to police, prosecute, incarcerate, rehabilitate, and then monitor him his entire life. Generations of such people have been created and coddled all for the sake of maintaining a nice, fat, somewhat reliable voter base for politicians.

That same slothful group, with much more time on their hands than working people can spare, are rallied to action and fed with a constant barrage of lectures on how the working people of the country are responsible for their woes, and that more must be exacted from their oppressors in the name of fairness. The government now runs ads practically begging people to go apply for food stamps, go to free clinics, or claim some sort of protected class status to qualify for yet another type of handout. Independent businesses thrive now on teaching people how to get the taxpayers to fund whatever it is they perceive that they need or maybe just want). Anyone who dares to protest the largess availed to the complainers is called uncaring or racist or xenophobic or insensitive or hateful or <insert your favorite self-debasing pejorative here>. Remember the Katrina hurricane aftermath, where looters filled shopping carts with TVs, Xboxes, and sporting goods while casually strolling through damaged Wal-Marts? How many times were we told not to criticize them since they were just getting something back from the system that had exploited them?

So, like thermal runaway in an amplifier, a tiny overstress provides the initial momentum, and the entire system feeds on itself and increases in amplitude beyond the intended safe operational limit until finally a breaking point is reached. Unlike the amplifier, though, that has no capacity for increasing its own failure point when needed, society has politicians to wring more life out of the working people so that the welfare system can be sustained and increased to an even higher level. In the U.S. alone, we transfer trillions of dollars per year in the form of welfare, urban development, entitlements (off-budget items like Medicare, Medicaid, Social Security), unemployment, and other programs directly to individuals as well as to organizations that dole out goods and services (with a tidy cut for themselves, of course).

It wouldn’t be so bad if it was permissible to require the lazy class to perform public services for handouts from the public trough, but they cannot even be asked to work for their booty. But making a second- or third-generation gang member or welfare queen pick up trash or dig a ditch would hurt his or her delicate sensitivities, don’t you know?

Now let us consider the other form of government expenditure - often referred to by the aforementioned class, and by those who feed that system by shaking the rest of us down – as “corporate welfare.” A moral equivalence is made between the two that does not even come close to passing logical muster.

When the government writes a check to a private company for providing a good and/or a service, that money is being used to pay productive people to do work. It contributes to an overall sense of well-being and pride in accomplishment by those performing the labor. It does not matter whether the person is a manager, engineer, clerk, janitor, or accountant, each is actively engaged in a vocation of choice. According to numerous recent surveys, a relatively small percentage of people work at jobs they despise (particularly in countries with generous social welfare programs, where it is easy to subsist on government largess, aka taxpayer money).

One can argue over the equity – or inequity – of how the funds are distributed within the companies receiving government contracts, but the fact is that generally a trickle down effect occurs. With all the requirements placed on recipients of government contracts, especially large ones, employees benefit handily from the corporation’s well being in the form of health care, life insurance, retirement assistance, facilities (work environment), protection against discrimination, and a host of other creature comforts. Yes, in the larger companies the CEO probably makes a hundred times what the floor sweeper makes, but that is generally the case in a free market regardless of where the contracts originate. It is interesting how the same people who complain about a CEO making a million dollars a year while he/she makes thirty thousand, will cheer on a sports figure who just signed a multi-million dollar contract while the guy who wipes said super star’s sweat off the locker room bench makes a pittance.

Admittedly, there is a lot of waste and fraud that occurs within the government contracting realm, but the difference between that and the waste and fraud going on in the social welfare system is that at least with the former the money is going to people who work for a living and provide jobs for others who work for a living. That is not an endorsement of the behavior, just a recognition of the difference.

Obviously, I write from the perspective of an American in a grueling election year (and as one who just paid a sickening amount of income taxes), but in reading extensively on the condition of other countries, we actually have it better than many of the very socialist countries. Those of you who live under such systems are painfully aware of the portion of your hard-earned euros, pounds, or whatever, that are extorted from your paychecks. All of us who have chosen to be net contributors to the world have long paid the price in many forms for those who leech off of our willingness to shrug it off and hope that the politicians are merciful enough to keep the pain level just short of unbearable. That is the key to their success at their political craft – they know just how hard to push. Take a little more from us. Give a little more to them. Build the voter base of the lazy until it reaches critical mass to where their numbers outweigh ours. At that point, the biggest challenge is actually getting the lazy out to vote.

Every time I read of proposed budget cuts to NASA or to funding of university/corporate research or to highway construction/maintenance or to many other programs that promote healthy activities for the advancement of society in order to divert funds to failed programs that only augment and perpetuate the lazy, my head wants to explode. The government refuses to tie benefits to the lazy to a demonstration of changes in their own habits that keep them down, but then we see reports where IBM or Lockheed Martin or Northrop Grumman are temporarily banned from receiving government contracts until they prove that their “bad” habits or practices have been changed. It is utter insanity, and perhaps the most exasperating aspect of it all is that the producers of the world have the power to change the system, but do not.

Please click the Reply button to comment.

_________________
- Kirt Blattenberger
RF Cafe Progenitor & Webmaster

Kirt,

Your article accurately reflects what is happening to some people that live under the welfare system. The percentage of people choosing to live on the public dole I couldn’t begin to guess. There are however, people that are using welfare programs to try and on their feet or otherwise trying to become productive citizens. Your article did not address them at all.

If a person is on welfare, they are in a hole that only the most determined can get themselves out of. The system is designed to trap people in that hole. Consider a person with children living on minimum wage. If they earn an annual wage that is under some threshold, you will get the maximum benefit from all of the programs designed to “help” these folks. They will not pay any income taxes and will earn the maximum earned income credit, food stamps, and housing subsidy.

Their wages, plus the benefits, give them a total buying power at some resource level. As they work hard to increase their wages by working more hours, earning promotions, increasing their education, etc., the benefits are reduced to zero, keeping their total buying power at a near constant level. This step function makes it extremely difficult to break free of the welfare system. The system traps them in this hole.

The good news is that in spite of what people hear on the nightly news, living in poverty is a transitory experience for most people. The Census Bureau published statistics on how long families live below the poverty level from 1996 to 1999 (why they no longer publish this report is not explained). In the report, it said the 51 percent of the people who are reported to live in poverty, live below the threshold for less than four months (see figure 6 below). Less than two percent of the households were below the poverty line for more than four years.

I believe that a system must be put in place that helps people who face catastrophic life situations. I believe it is possible to put together a system that helps people through these situations, but does not encourage the behavior you talked about in your article. Unfortunately, I doubt Congress has the intestinal fortitude to enact such a solution.

Greetings Dave:

Thanks for the thoughtful response. You are correct that my article does not address those who try to transition out of the social warefare system; I intentionally refer to the "lazy" who are perpetually entrenched. It is exactly the situation you describe that traps and keeps people on the dole that is so insidious. Make no mistake - that is due to a combination of devious design and the kind of good intentions that the Road to H*** is said to be paved with.

The very fact that there is an incentive to remain in the system is utter moral corruption at its worst because all too often the unfortunate soul who is desperately trying to climb past the barrier finds it easier to press politicians for more public benefits rather than make the personal sacrifice and defy the system. The process of making the transition can probably be modeled using the equations of quantum mechanical tunneling - the phenomenon is similar.

Politicians, of course, are all too eager to dig deeper into our pockets and give that money to others, while taking credit for servicing his/her constituents. However, I will not absolve the recipients of responsibility for their personal behavior. A lot of the people you describe that are actually working and receiving some form of public assistance are content with that lifestyle. Living a relatively carefree life is worth a lower income to many people. A lot of off-the-books money is earned in those realms that never figures into the numbers reported by government accounting. The illegal immigrant population is a prime example of that. Our schools, medical facilities, and social services centers are overwhelmed by them. Politicians on both sides of the aisle are all too happy to accomodate the demand.

Consider this quote, oft attributed to Alexander Fraser Tytler (true origin does not seem to be known with certainty):

"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years.

Great nations rise and fall. The people go from bondage to spiritual truth, to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency, from complacency to apathy, from apathy to dependence, from dependence back again to bondage."

...which of course demands the next quote of definite origin (George Santayana)

"Those who cannot learn from history are doomed to repeat it."

_________________
- Kirt Blattenberger
RF Cafe Progenitor & Webmaster