Tag Archives: Dependency

News

New report: welfare spending hits record $1 trillion, up 32% in Obama’s first term

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Democrats control the House and Senate in 2007
Democrats control the House and Senate in 2007

Dad sent me this excellent article from the Daily Caller.

Excerpt:

The government spent approximately $1.03 trillion on 83 means-tested federal welfare programs in fiscal year 2011 alone — a price tag that makes welfare that year the government’s largest expenditure, according to new data released by the Republican side of the Senate Budget Committee.

The total sum taxpayers spent on federal welfare programs was derived from a new Congressional Research Service (CRS) report on federal welfare spending — which topped out at $745.84 billion for fiscal year 2011 — combined with an analysis from the Republican Senate Budget Committee staff of state spending on federal welfare programs (based on “The Oxford Handbook of State and Local Government Finance”), which reached $282.7 billion in fiscal year 2011.

[…]According to the CRS report, which focused solely on federal spending for federal welfare programs, spending on federal welfare programs increased $563.413 billion in fiscal year 2008 to $745.84 billion in fiscal year 2011 — a 32 percent increase.

[…]The total federal spending on federal welfare programs vastly outpaced fiscal year 2011 spending on such federal expenditures as non-war defense ($540 billion), Social Security ($725 billion), Medicare ($480 billion), and departments such as Justice ($30.5 billion), Transportation ($77.3 billion) and Education ($65.486 billion) — a fact that alarmed the ranking member of the Senate Budget Committee, Alabama Sen. Jeff Sessions, who requested the report from CRS.

“These astounding figures demonstrate that the United States spends more on federal welfare than any other program in the federal budget,” Sessions wrote The Daily Caller in an email. “It is time to restore — not retreat from — the moral principles of the 1996 welfare reform. Such reforms, combined with measures to promote growth, will help both the recipient and the Treasury.”

When state spending on federal welfare programs — specifically Medicaid and the Children’s Health Insurance Program — was thrown into the mix, the amount spent on federal welfare increased 28 percent, from $798.813 billion in fiscal year 2008 to $1.028.54 trillion in fiscal year 2011.

“No longer should we measure compassion by how much money the government spends, but by how many people we help to rise out of poverty,” Sessions continued. “Welfare assistance should be seen as temporary whenever possible, and the goal must be to help more of our fellow citizens attain gainful employment and financial independence. This is about more than rescuing our finances. It’s about creating a more optimistic future for millions of struggling Americans.”

With food assistance spending increasing the most out of every category, Sessions, who has been sounding the alarm on the expanding food stamp rolls, noted that the Obama administration has allowed for the food stamp increase through misleading promotion and a disregard for self-reliance.

“The administration ludicrously argues that every five dollars in food stamp spending results in nearly 10 dollars in economic benefit. They insist that communities ‘lose out’ when more people don’t sign up for benefits,” Sessions noted. “[The United States Department of Agriculture] even awarded a recruitment worker for overcoming people’s ‘mountain pride.’ Is this a hopeful vision for the future? Do these priorities make our country stronger and our economy more secure?”

Do these numbers surprise you, because of what you hear from Obama and his allies in the media? Well, Democrats are always lying about how the Bush tax cuts caused the deficits. The truth is that revenues went up after the tax cuts because more wealthy invested their savings since they stood to keep more of the gains if their risks panned out. People invest more when they are allowed to keep more of the profit, if they get a profit. That’s how investing works – when you stand to gain more for the same risk, you risk more. And risking money in a business venture means MORE JOBS, since people get hired to take the risk, and do the work.

Bush’s tax cuts were passed in 2001 and 2003, and look what happened to revenues:

Did the Bush tax cuts make revenues decrease? No!
Did the Bush tax cuts make revenues decrease? No!

Not only that, but the unemployment rate went down to just over 4% after the tax cuts. The two wars cost about $550 billion, and we actually got national security out of it. What do we get for paying people not to work? Is it government’s job to pay people not to work? I think that charity is best done by individuals, businesses and especially churches, where we can expect some moral accountability from the recipient – some improved decision-making and personal responsibility. That’s simply lacking when government mails out checks paid for by working families and their employers.

Not every Republican is good on cutting spending, but Jeff Sessions is one of the Republican majority who opposes spending. We just just need to keep getting rid of the RINOs and Democrats, and this problem will get solved. We are never going to turn this economy around when people who think that more dependency and fewer jobs cause economic growth. They are wrong about the facts and they need to go in November.

News

Who pays the bill for handing out $2.2 trillion of entitlements per year?

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This article by Nicholas Eberstadt is the most popular article on the Wall Street Journal right now. I found it through Doug Ross’ links.

First, a quick review of the entitlement situation:

What is monumentally new about the American state today is the vast empire of entitlement payments that it protects, manages and finances. Within living memory, the federal government has become an entitlements machine. As a day-to-day operation, it devotes more attention and resources to the public transfer of money, goods and services to individual citizens than to any other objective, spending more than for all other ends combined.

The growth of entitlement payments over the past half-century has been breathtaking. In 1960, U.S. government transfers to individuals totaled about $24 billion in current dollars, according to the Bureau of Economic Analysis. By 2010 that total was almost 100 times as large. Even after adjusting for inflation and population growth, entitlement transfers to individuals have grown 727% over the past half-century, rising at an average rate of about 4% a year.

In 2010 alone, government at all levels oversaw a transfer of over $2.2 trillion in money, goods and services. The burden of these entitlements came to slightly more than $7,200 for every person in America. Scaled against a notional family of four, the average entitlements burden for that year alone approached $29,000.

Government’s job used to be to handle responsibilities like roads and bridges or like defending us at home and to defending our national interests abroad. But now government seems to be more interested in redistributing money taken from job creating businesses and their workers to those don’t create jobs and those who don’t work. What happens when you punish people for trying to succeed and reward people who don’t even try?

This is the result of wealth redistribution:

The proud self-reliance that struck Alexis de Tocqueville in his visit to the U.S. in the early 1830s extended to personal finances. The American “individualism” about which he wrote did not exclude social cooperation—the young nation was a hotbed of civic associations and voluntary organizations. But in an environment bursting with opportunity, American men and women viewed themselves as accountable for their own situation through their own achievements—a novel outlook at that time, markedly different from the prevailing attitudes of the Old World (or at least the Continent).

The corollaries of this American ethos were, on the one hand, an affinity for personal enterprise and industry and, on the other, a horror of dependency and contempt for anything that smacked of a mendicant mentality. Although many Americans in earlier times were poor, even people in fairly desperate circumstances were known to refuse help or handouts as an affront to their dignity and independence. People who subsisted on public resources were known as “paupers,” and provision for them was a local undertaking. Neither beneficiaries nor recipients held the condition of pauperism in high regard.

Overcoming America’s historic cultural resistance to government entitlements has been a long and formidable endeavor. But as we know today, this resistance did not ultimately prove an insurmountable obstacle to establishing mass public entitlements and normalizing the entitlement lifestyle. The U.S. is now on the verge of a symbolic threshold: the point at which more than half of all American households receive and accept transfer benefits from the government. From cradle to grave, a treasure chest of government-supplied benefits is there for the taking for every American citizen—and exercising one’s legal rights to these many blandishments is now part of the American way of life.

As Americans opt to reward themselves ever more lavishly with entitlement benefits, the question of how to pay for these government transfers inescapably comes to the fore. Citizens have become ever more broad-minded about the propriety of tapping new sources of finance for supporting their appetite for more entitlements. The taker mentality has thus ineluctably gravitated toward taking from a pool of citizens who can offer no resistance to such schemes: the unborn descendants of today’s entitlement-seeking population.

We used to want to earn our own success. Now we want to live on the backs of children not yet born. Slavery is a horrible crime, no matter where it is practiced. Isn’t it a kind of slavery to live it up now and then pass the bill for it on to generations not even born yet? It strikes me as a kind of slavery – taking an unfair portion of the income of others so that we can live at a higher standard than what we can afford through our own choices and labor.

News

U.S. GDP growth slows to 1.5% in second quarter

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Remember, Democrats took the House and Senate in 2007
Democrats took the House and Senate in January 2007

From CBS Marketwatch.

Excerpt:

The U.S. economy slowed sharply in the second quarter, growing just 1.5% as consumers slashed spending and businesses grew more cautious about hiring and investing, underscoring that an already wobbly recovery is losing even more steam.

In the U.S., though, new government figures showed that growth in gross domestic product, the broadest measure of goods and services churned out by the economy, slowed sharply from the first quarter’s 2% annual rate and the fourth quarter’s 4.1%.

That downward slope in growth is worrisome to economists. As the economy loses steam, a pullback can become self-reinforcing as businesses and consumers worry about the future.

The slowing economy, along with government data showing the recovery has been weaker than thought, raises the specter that a sudden shock—such as an escalation of Europe’s crisis, or next year’s looming tax increases and spending cuts—could shove the U.S. back into recession.

[…]One of the biggest obstacles to recovery is a dearth of consumer spending, which accounts for two-thirds of demand in the economy.

Spending rose 1.5% in the second quarter, lower than 2.4% in the first, reflecting weaker demand for cars and big-ticket items. A big reason is the stagnant labor market. Employers added fewer jobs in the second quarter than they have since the labor market began recovering in 2010.

“The economy is kind of being strangled,” said Bob Baur, chief global economist at Principal Global Investors. “We underestimated how much uncertainty may have contributed to a lack of desire to expand and hire.” Mr. Baur expects 2% to 2.5% growth in the second half of the year but has “grown more cautious,” he said.

[…]Businesses, meanwhile, appear to have grown more cautious about spending. The new GDP report showed that nonresidential fixed investment expanded 5.3% in the second quarter, less than the 7.5% in the first, though spending on equipment and software was healthy. Joseph Carson, an economist at Alliance Bernstein, said: “Uncertainty surrounding U.S. tax laws has created confusion and concern among companies, which has probably depressed investment spending.”

Remember, the Obama administration thinks that higher government dependency “stimulates” the economy:

House Minority Whip Steny Hoyer (D-Md.) said Tuesday that food stamps and unemployment insurance are the two “most stimulative” things you can do for the economy.

During a pen and pad briefing with reporters on Capitol Hill, Hoyer was asked if any Democrats are “reconsidering the wisdom” of letting the Bush tax cuts expire at year’s end for the top income earners given the still struggling U.S. economy.

“I haven’t talked to any who are of that mind,” said Hoyer. “If you talk to economists, they will tell you there are two things that are the most stimulative that you can do — one’s unemployment insurance, the other’s food stamps, okay?”

Of course, all that spending on unemployment and food stamps costs money, so they just borrowed that money from future generations of Americans – your children. The national debt is nearly $16 trillion, but they just keep borrowing. They don’t know what else to do, because they have no idea how jobs are created in the first place.

Republicans think that the best way to stimulate the economy is to create jobs by encouraging businesses to risk their capital in business ventures. But the Republicans aren’t in charge, so we are following the Democrat playbook. Many companies have responded to the Democrat plan to punish “the rich” by expanding their businesses in other countries that are less hostile to job creators. When you introduce burdensome regulations (EPA, Obamacare, Dodd-Frank, etc.) and high corporate taxes (35% – highest in the world!), that means that businesses can hire fewer people at home, and they are forced to expand elsewhere.