Are the three events exactly the same? No, of course they’re not. But that doesn’t mean the similarity isn’t interesting….
AngryBrownButch, in a post about gentrification, quotes a interview with a fashionable New Yorker she heard on the radio:
Q: Now, why do you think a neighborhood suddenly takes off like that?
Melena Ryzik: Well, it starts with the low rents. That’s the key thing –
Q: Big spaces and low rents.
MR: Exactly, exactly. And of course I think there’s also the idea for New Yorkers that you want to be the first person to discover something, so there’s a certain cache in having been maybe the first person or the first set of people living over on the Meatpacking district side of things.
# # #
Dodosville on how Europeans settled America:
In case the Europeans weren’t totally convinced that it was OK to take people’s land by force because they didn’t believe in the Christian God, Europeans also decided to redefine what it meant to “occupy” land in legal terms. This justification was probably for some of the more intellectual Europeans as it was a less crude justification than they are heathens, do what you want to them. So the monarchs, clergymen and scholars if Europe got together and said, well, yeah those people are living on the land, but they aren’t really using the land in the way that’s intended. Civilized people built settlements, planted food in the ground, had cattle and other livestock, chopped down forests in the name of progress, and tried to grow as big as they could. The Indians of the Americas weren’t doing that, well, except for the Inca and the Aztec whose settlements were bigger than most in Europe, but we’re not talking about those people – we’re talking about the hunter/gatherers who live in small tribes – those guys weren’t using the land right and it was an affront to nature and God’s plan that people used it in that way. So since they weren’t using the land the way it was meant to be used, it was terres nullus, or empty land, and everybody has the right to take empty land, by force if you have to. It was just what had to be done – it’s the natural order and all those things.
# # #
From a 1982 article in The Link, by Muhammad Hallaj:
The Zionists’ need to convince the world that their scheme victimized no one required them to maintain the delusion that Palestine was a land without people. When they sought Gandhi’s endorsement of Zionism, their emissary brazenly asserted to him that “Palestine itself was a waste space when we went there… No one else wanted it.” Even after the Zionists created their Jewish state they continued to insist that the Palestinians did not exist. “It was not as though there was a Palestinian people in Palestine considering itself as Palestinian people and we came and threw them out and took their country away from them,” Golda Meir, Israel’s prime minister, said after the 1967 war. “They did not exist.“
Edited to add: I’ve added bolds to the quotes to emphasize what I was intrigued by: the tendency, in all three situations, to talk about the land as if it were empty and unused. As should be obvious, by noting this similarity I am not saying that the three situations are alike in all other ways.
I have undergraduate degrees in Political Science and History as well as an MBA . I fully understand and appreciate the difference between anecdotal evidence and actual scientific analysis. But I also understand the difference between the real world and what passes for data sampling among the social sciences. I also think there is a unique value in understanding a culture by observing how it operates n practice rather than theory. The stores I owned when I was younger were in the poorest sections of Boston and Cambrige.The sample size was more than adequate to form an understanding of the particular subculture I described.
FurryCatHerder was spot on. I witnessed the underground market involving food stamps first hand. On many occasions women would gather at my store to exchange coupons for cash in order to buy my furniture.
I employed an older woman who knew how these things worked first hand. She was a master when it came to putting people together to exchange cash for coupons. What you need to understand is that it was a way of life. These folks learned exactly how to work the system.
Ampersand also said:
No, what you’re describing does not appear to be the norm. If I’m mistaken about that, then help me out by linking to data from a legitimate source showing that the sort of cases you’re discussing here are the norm.
I never claimed it was the norm. But I will claim that it is a sizable percentage in certain areas. Many of these cases defy conventional methods of data sampling. The person who is able to work and claims a back, neck, or emotional injury to cheat the system simply shows up as disabled. As a previous commenter stated there is no way to assess the validity of certain claims. Objecting to anecdotal evidence is fine. But at some point that kind of observation becomes quite valid. When anthropologists do this it is called participant observation and suddenly it rises to the level of actual science.
N.R,
You keep looking at this as though the only solution is to throw money at the problem. Throwing money has not, does not, and will not work. It’s a failure. Try something else.
You keeping engaging in “What about the children?” Start by offering free tubal ligations and vasectomies, or making them a condition of eligibility. If there’s not enough money to go around within the programs, place limits on what the money can be spent for. Food stamps, by law, can be used to buy just about any food going, regardless of value or nutritional content. Limit food choices so that convenience foods aren’t part of the program.
It’s practically an axiom of social policy that whatever the government subsidizes increases and whatever it taxes decreases. Programs need to be designed with this in mind, but they aren’t. Programs are designed so that welfare recipients “feel good” about themselves and have no obligation back to the State. There’s no reason that welfare recipients of all sorts can’t be obligated to perform work for the State as a condition of receiving benefits, except for our will to make that part of the law.
Michael writes:
Another issue is that what is selected as the metrics are frequently selected to prove a specific agenda.
For example, our comptroller stunned the country by publishing a report that “proved” illegal immigrants are net-contributors. What she looked at was sales tax paid and basic services received. What she didn’t look at were such things as health care and education. Once that was taken into consideration the $4.7B impact caused by illegal immigrants became more clear.
nobody.really Writes:
March 16th, 2007 at 7:41 am
So, Michael thinks that young people on welfare should not be forming couples, having babies, and setting up households. Perhaps he’s right. But what portion of young people on welfare who invest their money prudently and refrain from getting pregnant will come into a new furniture store? If you start from the perspective that people on welfare shouldn’t be wasting their limited resources on new furniture, then OF COURSE the only welfare people Michael sees will be people who are behaving badly. This is classic selection bias.
You are reading things into what I said which are not there . Most of the examples I observed did not involve young couples . Also , these were not simply young people but many were MINORS ! You also assumed that my store sold only new furniture . In fact , it sold both new and used . used furniture was actually had the highest profit margin .
Studies prove my observations regarding the children of welfare recipients to be correct.
I never said the only welfare people I observed were behaving badly. One of my best employees was a woman who raised her two daughters very well. One went to Harvard and the other to another top school. I saw a wide range of people in the 5 stores I owned prior to going to college and changing careers. I also had many fine young folks who worked very hard for the money I paid them.
nobody.really also wrote :
But what are the odds that your life exposes you to a representative sample of people?
The odds would be quite high since I lived and worked in the very
neighborhoods I describe. But my situation is even more unique. I was actually born in the poorest section of Boston. I lived there as a small child until we moved to the suburbs. My family went from being very poor to middle-class. I came to know many very wealthy families in those towns. My family eventually became wealthy. But that was many years after I had left home
Prior to opening my first retail store I worked nights pumping gas and sleeping on the floor of that grimy gas station. Eventually I convinced the owner of a business across the street to allow me to sublet a section of his retail establishment. I worked the store during the day and pumped gas at nights until I was making enough money to drop that night job.
I knew everyone from store owners and landlords to pimps and prostitutes. In other words, the real world.
nobody.really also wrote :
So, Michael thinks that young people on welfare should not be forming couples, having babies, and setting up households. Perhaps he’s right .
Yes, You nailed that one. I don’t think people should have children until they can afford the costs associated with raising them. Having them with the express intent on having others pay for them is reprehensible for a number of reasons. I wanted to give my children the very best of everything. Prior to having kids, I made sure I had the money to fund the very best education possible. I purchased a home and a vacation property well in advance of having my first child. But I don’t expect people to be as disciplined as me. However I do expect that people should be able to afford the basic necessities before bringing a child into this world .
Why is that so much to expect?
A minor quibble. Convenience foods are cheaper and have larger portions, and it’s easier to stretch a food budget to feed the kids. Four 89cent boxes of mac and cheese can be stretched farther than spending money for the ingredients to make a pan of home made mac and cheese, which would undoubtably be much healthier cuz of all the dairy. Fresh vegetables have the same problem, and lets not even get into the price of a piece of meat that’s more fat than not.
Lets see, a block of cheese here is (last I checked) $3.89. Milk is $3.01, or maybe it was $3.10. A large box ‘o cheap pasta is $2.99, unless you want to buy the really cheap kind for $1.99, which has the habit of being so old it’s stale and won’t boil. A pack of four sticks of butter is $4.00, give or take a few cents in either direction. A bag of flour is a $1.89…do you see where I’m going with this? I haven’t even listed all the ingredients for mac and cheese, and I’m pretty sure two blocks of cheese is skimpy to make a family-sized pan of it.
I make box mac and cheese with the contents of the box, plus either milk or butter, if it’s available to feed the kids, and/or myself, depending on how many kids I’m cooking for, to make the healthy ingredients last longer. Sometimes ya gotta make it with just a bit of hot water instead of milk or butter. But hey, who’s complaining. It doesn’t taste as good, but it’s still food. What you’re suggesting is using an amount of money that, while it can still sometimes be stretched to last the month feeding kids less than healthy food, to it being used to make healthy meals available every once in awhile.
There’s no ‘if’ about the money being enough. It just isn’t. So how are kids going to eat three meals a day if their parents are only buying healthy food on that meager stipend? Let alone eat all month? And it is meager, no doubt about that.
-I’m not saying raising the amount on the foodstamp card is enough. I’d rather the system get overhauled, not more restrictions placed.
On cost and benefit:
The people paying for that [social programs] are the ones who pay taxes….
That is unclear to me. Yes, poor people don’t pay federal income taxes. But it is unclear how to measure who is paying for government, given that much of government is simply not being paid for at all. The bill will be paid by our kids. If I cared about what portion of the bill would be borne by my own kids, I might want to pursue policies to ensure that everybody’s kids are going to be as productive as possible.
Wealthy people pay the majority of federal income taxes in the US. Indeed, they pay a growing share, even as federal income tax rates are cut. How is that possible?
It’s possible because the wealth have become VASTLY MORE WEALTHY than ever before. The same cannot be said of the poor. Consequently, I find little empirical support for the idea that public policy is excessively generous to poor people generally.
While the wealthy pay a larger share of taxes, do they bear a disproportionate burden for our public policies? That depends on what your include in your proportions. Some US citizens pay for our policies with their lives and bodies. The upper 1% of taxpayers overwhelmingly supported the election of Pres. Bush, and presumably support his policies. Yet few than 1% of the upper 1% serve in our nation’s armed forces. If the children of the upper 1% were coming home to Walter Reed Medical Center, do you really think we’d have the same conditions we have today? People pay for US policies in many ways. I am not at all convinced that the upper 1% is paying too much.
Similarly, who pays for the environmental degradation? Who pays for the decline in workplace safety in mines? Who pays for the decimation of the civil rights division or the National Labor Relations Board?
And who benefits?
Consider the simple example of the child tax credit. Raising kids takes money, that’s true. So the Bush Administration proposed a tax credit to subsidize people with kids. But the law said that if you don’t pay taxes, you don’t get any benefit. In other words, the law provided for subsidizing the children of the rich, but not the poor. So every time I see a photo of Syndy smiling out from Amp’s website, I wonder whether my taxes are subsidizing her; I guess I don’t need to guess about FurryCatHerder’s kids.
Consider Pat Tillman. As a professional football player, he benefitted handsomely from the Bush tax cuts, including the child tax credit. At least, until he quit his job. After 9/11, he left the NFL to join the US Army. Suddenly he no longer qualified for all those tax breaks – not even the child tax credit. Had the burdens he bore for governmental policies suddenly lessened? Had his kids suddenly become less expensive to raise? Or is there some other explanation for the design of public policy?
There are many costs and many benefits to government programs. I encourage everyone to scrutinize the financial data. But if financial data is all people give you to look at, you’re being manipulated.
Yes, I’m happy to be well-paid, and I’m even happy to contribute to the government. But in 1994 or 1995 (forget the exact year — it was one of those two) when I paid $0.55 of every dollar I earned in “tax”, it was just dumb….
If you look at the link I provided above, you’ll see who’s paying the bill for these programs, and it isn’t the poor middle class the way lefties like to mewl about. The bottom 3 quartiles pay 15% of the total (total!) federal tax burden.
Are you saying that the bottom 3 quartiles are paying less than they used to in absolute terms? Or are you saying that the top quartile is paying VASTLY MORE because it has become VASTLY RICHER than ever before? And if so, what exactly is wrong with people who are VASTLY RICHER paying more taxes?
In 2002 the Wall Street Journal editors argued that we should envy those lucky duckies who are too poor to pay income tax. The editorials were widely refuted for both factual and policy content.
That said, I also don’t like the fact that the top quartile of earners pay such a high share of federal taxes. This is why I favor policies designed to make the bottom 75% more productive and richer, and therefore able to pay a larger share of the tax burden. I hope we can all join in these efforts.
A.W,
“Mac and Cheese” isn’t made from cheese. Maybe if it were you’d have a point.
As for raising the amount of food stamp cards, we’d have to get to a point where recipients valued what they get at something nearer to face value before there’d be any point in raising payments. As it is, food stamps are valued well below face value, which is why there is an underground market in them. You can find support for this by looking at how “cash out” programs have worked and how changing from a coupon or swipe-card based program to a cash program affects decisions about food purchases.
I can buy, any day of the week, a $100 EBT card (“Lone Star Card”) for $50. If that’s all it’s worth to its holder, I say we cut benefits until the cards are worth face value. A fifty percent reduction across the board in benefits tomorrow would be a good start, in my mind.
Policy critique:
The problem is that a statistic like a 13% reduction in hours worked isn’t one that many of us, especially those of us who’ve worked what amounts to our entire lives … are going to like.
Thanks for sharing your reaction to the studies. Indeed, the study authors discussed this popular reaction explicitly.
Some people hate the idea that someone would refrain from working. Oddly, even people who were raised by stay-at-home moms hate it. The studies show that the greatest effect of the income programs was to have moms tend to stay at home for longer periods after leaving the workforce (e.g., following childbirth). Apparently people are willing to impute bad motives to others for engaging in the same conduct their own mothers engaged in. This poses a definite political hurdle to the adoptions of such programs.
Entitlement programs are a form of double taxation — first, we pay the taxes so that other people get the benefits, then we have to save so that we can pay for ourselves to get the benefits. Programs like NIT and BIG would leave me in poverty were I to take advantage of something like them. Sure, it would be nice to have a few hundred extra dollars, but I’d still be dipping into personal savings to pay basic living expenses — housing, utilities, food, clothing, transportation.
To be clear, this was precisely the point of the studies – How much paid labor will people forego if given the option to receive NIT or BIG benefits? The answer was roughly 13%, for precisely the issues raised above. This dynamic is not considered a problem with the programs; it’s a feature designed to keep the cost of the programs low.
The 1996 changes in welfare laws settled for once and for all the greatest debate between “welfare liberals” and “welfare conservatives” — do liberalized welfare programs foster welfare dependence and create a disincentive to work? The answer, from study after study, is “Yes, liberalized welfare programs create disincentives to work”, and the studies you and others referenced further bear that out.
Anyone who has read the studies knows that this “greatest debate” was resolved long before 1996; indeed, I think this issue was resolved in 1776, with the publication of Adam Smith’s Wealth of Nations. It’s basic economics that as people get richer they consume more, including consuming more leisure. The only surprising aspect to this discussion is the fact the people find it surprising.
“Leisure,” however, is something of a misnomer. Recall that the studies reveal that as people work less, they produce a variety of social benefits, especially regarding their kids. I read this to say that people are trading paid, productive labor for unpaid, productive labor. I don’t understand why people find this so problematic.
You keep looking at this as though the only solution is to throw money at the problem. Throwing money has not, does not, and will not work. It’s a failure.
Respectfully, the studies showed a number of results from the income programs. I understand that some people are philosophically opposed to the programs, but I don’t regard that as a reason to ignore the data.
It’s practically an axiom of social policy that whatever the government subsidizes increases and whatever it taxes decreases.
I think it’s an axiom of economics.
Programs need to be designed with this in mind, but they aren’t.
Respectfully, the income experiments were designed precisely to explore the program’s subsidy effects. Indeed, the authors remarked that their programs basically launched the field of rigorous policy study.
That said, I agree with the larger point that we should consider the effects of subsidies and taxes in designing policy. If only we had considered the effects of subsidies and taxes before we invaded Iraq….
Frustrations:
Various people said something akin to I don’t think people should have children until they can afford the costs associated with raising them.
Me too. For what it’s worth, I feel the same way. It’s crazy that we bar people from driving without getting a licence, but we permit any fool to procreate.
And yet, people procreate with our without our approval. So, putting aside for a moment our disapproval, disappointment and frustration, what are we going to do about it?
I’m not trying to appeal to people’s compassion; I’m trying to appeal to people’s self-interest.
Consider two alternatives. In Central and South America, there is very little middle class, and the rich have largely abandoned the idea of maintaining the poor. The rich tend to live in walled-off communities with guards, while the rest of their societies live in squalor.
In contrast, since WWII the US has had a relatively large middle class, and has taken measures to maintain some minimum standard of living.
Neither system is costless. Public welfare is not costless. On the other hand, guards, and walls, and the constant threat that a populist demagogue will take everything you’ve got – these are not imaginary costs either. We need to determine what kind of policies to adopt. But that discussion will be helped by the realization that there are no costless alternatives.
There’s no reason that welfare recipients of all sorts can’t be obligated to perform work for the State as a condition of receiving benefits, except for our will to make that part of the law.
True. But what problem does that solve, exactly? As the studies show, the major reduction in work hours occurred in the secondary wage earner – typically, the wife. Let me quote the language again:
To the extent that spouses pool their resources, I don’t know how to keep one spouse from taking more time off when the other spouse starts to earn more. Moreover, I don’t know why we’d want to.
“What about the children?” Start by offering free tubal ligations and vasectomies, or making them a condition of eligibility.
Now we’re talkin’! Whatever the merits of this specific proposal, I find merit in the acknowledgment that government might sometimes want to incur a short-term social cost for the purpose of avoiding larger, long-term costs. This is precisely what I’ve been talking about.
If there’s not enough money to go around within the programs, place limits on what the money can be spent for. Food stamps, by law, can be used to buy just about any food going, regardless of value or nutritional content. Limit food choices so that convenience foods aren’t part of the program.
More creative ideas. Perhaps they can be developed further. However, as with the income programs, it’s entirely predictable that some people will cheat. Much as we might try to keep people from making exchanges we disapprove of, market forces will find a way. As discussed above, there is a black market in food stamps already.
That doesn’t mean the programs can’t work. It merely means, as with any set of rules, we must acknowledge and accept that some level of cheating will occur, and consider this dynamic before we adopt our policies.
Thanks for all the suggestions. Keep ‘em comin’.
N.R writes:
And I want the underclass working and earning money as well. I simply happen to believe that welfare creates a disincentive, as the studies of “NIT” and “BIG” have shown, against work. I also base my belief on the observation that employment amongst chronic welfare recipients improved as a result of the 1996 welfare changes.
There are charitable programs I’m involved with that require recipients to work in order to receive benefits. One of the programs is, so far as I can tell, wildly successful, with long waiting lines, and near universal support. Keep in mind — in order to benefit you must WORK. You must also take classes in financial responsibility.
When the 1996 welfare law changes were being proposed there was strong opposition to them because … welfare recipients shouldn’t have to work, the poor dears. Some states, Iowa as I recall, had already instituted welfare-to-work programs and they’d proven that the concept is sound. Nine years on we’ve learned that sure enough, it does work — focusing more on “work” and less on “free money” produces the predictable result. People work.
Studies in such places as New Jersey where food stamps were replaced with cash showed that when people have “cash” in their hands they make better decisions. We’re having problems where I live because of Katrina — people who’ve been given housing vouchers don’t care for their homes because … they aren’t paying the bill. Who’s paying for the poor care of those apartments and houses? We are through increased taxes.
Don’t ask me why people behave differently when they are made more responsible for their lives because I don’t much understand it. You asked about my kid. First, I get no tax benefit because I don’t get the deduction, thanks to a legal fiction which says that the non-custodial parent always pays less to care for a child than the custodial one, and thanks to the reduction in tax deductions that happens up where my income is, I get slapped by another legal fiction — the parent who benefits the most should get the deduction.
But back to the kid — when tiny munchkin was about 4 I decided he needed to learn “responsibility”. Every month he gets a fixed amount of … cash. What he does with it is his decision — he can buy junk food, trading cards, computer games, or whatever, and he saves the rest. But if he says “Mom, I want to go to a movie!” my response is “You have money, figure out when you want to go and I’ll take you”. The result is that I pay LESS for his “discretionary expenses” (and clothes — when he started wasting my money on fads he was given a clothing budget and that was tacked on to the giant pile of money) than any other parent of a teen that I know. The only exception is parents I know who are on welfare (no, really — it’s wild). It’s get better — since this form of torture was inflicted on him, he’s managed to save enough for a nice used car downpayment. Mind you — all his junk food, computer games, toys, movies, non-educational books, clothes, etc. for well below what every parent I know spends on their teenager each month, and he has a car downpayment saved. Oh — and he has to do community service for holiday and birthday gifts. He performed 30 hours of community service last year and I’m currently working on getting him one of those “Points of Light Foundation” awards as part of a family.
Work and financial responsibility works every time its tried. Welfare don’t. It’s not a “libertarian fantasy”, it’s just this observation I’ve made over the course of my life.
You just proved my point, Furry. Box mac and cheese isn’t made from cheese. But the kind you put in a pan and bake is. The difference is how often kid’s will get to eat.
But both are considered food by the store, only with box, you can ‘feed’ your kid most or all of the month. With ‘healthy’, you can’t.
Yea, and I’ve no idea of the policy and credit checks needed to get one of those lone star cards. I know that I have an ebt card with a visa logo on it, but it isn’t worth a hundred dollars, and I can’t buy it for fifty bucks. It just takes money out of my checking with an added two dollar surcharge if I use it. I know my mother didn’t ‘qualify’ for the ebt card I managed to get, and it’s because her credit is shot. So how are poorer people supposed to afford those cards, and why does it only cost fifty dollars for the use of a hundred? Is there perhaps a monthly payment or something, like a credit card? Interest rates? And what do those cards have to do with good food?
A.W.,
“EBT” is the electronics benefits program here and around much of the country. It actually stands for “Electronics Benefit Transfer” and is part of the reforms to destigmatize welfare — give someone something that looks like a VISA card and they will “feel better”. Other names include “Eat Better Tonight” and (pejoratively, and captured in various songs) “African Express”.
You don’t “buy” them — the government hands them out and refills them each month. The underground market here consists of paying someone a dollar amount, typically $0.50 on the dollar, and they hand you their card and PIN. You then go to the grocery, buy the dollar amount you “paid” the welfare recipient for, and give them the receipt showing the balance. If you under spend, you get a “refund”. If you overspend, you get yelled at.
It’s a food stamps card, not some kind of credit card you “qualify” for with credit checks, interest rates, monthly payments and whatnot.
Like I said — I spend a lot of time (apparently more than you …) around some incredibly poor people.
I find the Tax Foundation’s statistics to be suspect. Especially since my research into state income taxes in Oregon ( http://jakesquid.livejournal.com/2836.html ) found exactly the opposite to be true. Not to say that my suspicions will be borne out. Statistically, the wealthy pay much, much less in taxes as a percentage of income than do the middle class. If you’re interested, I’ll try to find the name of the book that details all of this.
Even if the Tax Foundation’s numbers are correct, the wealthy are, IMHO, obligated to pay more. Never mind the fact that they benefit more from the current set up, if you are part of a society there are societal obligations. Helping the poor is one of them. After all, Jesus wasn’t known for saying, “I’m working hard here. Let the poor find their own way.”
nobody.really Writes:
March 16th, 2007 at 1:17 pm
Consider the simple example of the child tax credit. Raising kids takes money, that’s true. So the Bush Administration proposed a tax credit to subsidize people with kids. But the law said that if you don’t pay taxes, you don’t get any benefit. In other words, the law provided for subsidizing the children of the rich, but not the poor. So every time I see a photo of Syndy smiling out from Amp’s website, I wonder whether my taxes are subsidizing her; I guess I don’t need to guess about FurryCatHerder’s kids.
That is simply untrue. Many people who don’t pay taxes get an even larger subsidy by the EARNED INCOME TAX CREDIT. This subsidy for the poor has been going on for several decades. The working poor get it regardless if they have children or not. However, the credit increases with more children. So the point still stands. The poor use far more in services than they contribute in the form of taxes, nor do they subsidize other peoples children.
The tax credit I receive is meager compared to what I pay in total taxes . . Compare and contrast that with that of a welfare recipient and an example of the working poor. The idea that either is subsidizing me is ridiculous.
My wife and I recently completed our second adoption bring our total number of children to 3 . As I mentioned, none of my children will ever go to public schools yet I will pay hundreds of thousands of dollars in property taxes. Now compare that with a welfare recipient with the same number of children. In Boston the total cost for education would be over 30 k. Keep that in perspective the next time you want to claim that poor people contribute in the form of sales taxes. The numbers for a family of the working poor are not that much better. Consider too that none of this takes into account health care services, police, fire,ect. No welfare recipient or the working poor even pay for the education of their children. Run the numbers. Welfare recipients don’t pay taxes. The working poor pay a paltry amount.
As a CLASS? I doubt it. Are you implying that the selectino of things was done purely on the basis of medical care?
Purely on the basis of medical care? Clearly not, as is reflected in the sentence you quoted from me.
Of course, their strategy sucked.
So, because they didn’t jump on the anomalous real estate boom at the right time, fuck ’em. Great. If you, personally, don’t want to be “bailed out”, you can opt out. But that doesn’t lessen your societal and moral obligation to help others in your society.
As I mentioned, none of my children will ever go to public schools yet I will pay hundreds of thousands of dollars in property taxes. Now compare that with a welfare recipient with the same number of children.
I got mine. Fuck the poor. Sink or swim, buddy, sink or swim.
nobody.really has it right. If you want to see what results from your anti-tax ideology go to Central or South America. Of course, you and FCH know that you would be among the super-rich in those societies, so it probably won’t sway you guys a bit.
Big thanks to nobody.really for taking the time to refute the fantasies and fictions being thrown out there. And for doing it much more politely than I am capable of at this point.
Jake,
Those figures are from the IRS. You could get them from the IRS and examine them yourself.
I, personally, don’t find anything wrong with them. If anything they understate the amount of tax paid because a lot of deductions are phased out starting around $90K for single filers. So, while a middle income family earning $50K might get X benefit from some program or deduction, a $100K family will get less, and a $200K family will likely get … NOTHING!
The result is that the tax structure is doubly progressive. First, it’s progressive because the marginal rate increases with income. Then it’s progressive again because Adjusted Gross Income increases as a percentage of Gross Income as Gross Income increases.
The myth of the tax avoiding rich dude hasn’t been true since 1970 when the Alternative Minimum Tax took hold.
Jake Squid Writes:
March 16th, 2007 at 2:13 pm
Statistically, the wealthy pay much, much less in taxes as a percentage of income than do the middle class. If you’re interested, I’ll try to find the name of the book that details all of this.
You can play with the figures in a number of different ways. But regardless of how you use them one thing will not be in dispute. The wealthy pay the lions share of total taxes. Also, the taxes they pay far exceed what they use in the form of government services. See my example of property taxes and education above. The best citizen to attract to your community is one who is well employed and uses less services. They constitute a plus while poor people with a lot of kids constitute a net drain. That is the harsh reality.
My mistake, mine’s a check card, not an ebt card. I know how food stamp cards work, thank you, as I’ve had to use them myself. There’s no fancy names here, even the welfare office call’s em food stamps. What they’re called in the office between themselves, I don’t know. There’s really jingles on television with advertisement for them?
But you said you could buy a lone star card for fifty bucks. That doesn’t sound like welfare to me. I wasn’t aware you could ‘buy’ welfare benefits. Then again, they might not have those particular programs here.
I do have a question, though. Would you still advocate for the cards being used only for healthy food with the amount people are alloted right now?
Jake Squid Writes:
March 16th, 2007 at 2:35 pm As I mentioned, none of my children will ever go to public schools yet I will pay hundreds of thousands of dollars in property taxes. Now compare that with a welfare recipient with the same number of children.
I got mine. Fuck the poor. Sink or swim, buddy, sink or swim.
You mischaracterize my position. I have been poor, middle-class and wealthy. I am not fucking the poor. Rather I am allowing them to seek their fortune. I consider disincentives to be the worst thing possible for poor people. It traps them into poverty and takes money away from me that I would prefer to spend how I see fit. By the way, I contribute to two charities of my own which exceed my obligation to society. If I were taxed less I would contribute a large portion of that to charities which are better able to help the needy.
So it is not “fuck the poor ” as you say. It is “get out of my way and let me actually effect some positive change. I can do it better than can you.
Jake mewls:
I’m not opposed to charity or paying taxes. I’m opposed to programs that don’t work, and quoting Jebus back at me isn’t going to do much of anything. He’s dead, get over it.
Welfare doesn’t work. That’s what the 1996 reforms proved — provide people with an incentive to get off welfare and onto the employment rolls, and penalties if they don’t (carrot and stick), and those people’s lives improve.
What welfare has done is destroy the incentive to work, decouple actions and consequences and create an attitude of entitlement. The “tax the rich even more!” approach doesn’t work either — the “rich” are already taxed enough (85% of federal taxes paid by the upper quartile …) The “rich” have options that the “poor” don’t have and always will. The people who get hurt by “tax the rich even more!” are the middle class — the middle class doesn’t receive the handouts and lacks the additional income to save.
Many middle class people — and I’m middle class, not “rich” — make poor decisions based on mistaken beliefs about “government safety nets” or distortions because of the tax code.
For example, the current sub-prime mortgage mess is very likely due, in large part, to the special treatment of mortgage interest on tax returns which encourages people to keep their house at or near fully mortgaged. Unless people do as I do, which is live well below my means, there’s a risk they will slide into poverty at old age. And if you look at savings rates and retirement savings, that’s very much what’s in store for the middle class. Social Security is going broke, despite Amp’s repeated assertions it isn’t (if I could only pay 70% of my bills I’d be forced to file bankrupcy — so let’s quit pretending that Social Security won’t be bankrupt in another 30 years).
Jake squid said :
If you want to see what results from your anti-tax ideology go to Central or South America. Of course, you and FCH know that you would be among the super-rich in those societies, so it probably won’t sway you guys a bit.
Bad comparison Jake. I actually give people a lot more credit than do you. If I can make it anyone can. Many of my friends came from poor families and are now incredibly wealthy. One of my closest is from Cuba. He owns a cutting edge dental practice which is the envy of many in his profession. Another friend came here as a small boy from Jamaica. His mother was so poor he didn’t have shoes. He is now a millionaire many times over. In fact, I bet you have seen him on many an occasion.
We have different views of the world. I see opportunity where you see none. Your vision results in the entitlement of poverty. That is my opinion as well as my life experience.
A.W writes:
I didn’t say it was legal. I just said I could do it.
And while you say you’ve been on welfare, sorry, but I’m not convinced you’ve BEEN on welfare. One of the first things I learned when I was desparately poor (something I share with Michael …) was learning how to scam to survive. Like, stealing catsup from MacDonald’s, learning that it’s possible to live on Ramen Noodles, knowing what the bus schedules are, and being able to choose between getting home safely and hitchhiking.
And like Michael, I give to charities. About 10% of my income goes to charity, and about 10% of my “time” goes as well. I just happen to limit where my money goes based on how effective the charity is. No results, no money. Too bad, so sad.
This discussion is not, as you and Jake keep trying to frame it, about whether or not we eat the poor. It’s about how badly people with your mentality have harmed the poor and trapped them in a really miserable existence with your do-gooder mentalities.
Wait a moment. You said *You* could buy it. I thought you were at least middle class, how can you qualify for those welfare programs?
And I’m curious as to when the welfare system changed so those programs could be bought instead of qualified for.
And since your knowledge of government funding seems to be larger than mine, could you point me to any webpages that have the history of the changes needed to make those cards, and how they were brought about?
It’s always nice to get called a liar in the evening. I could tell you I’ve slept behind dumpsters, and that when I was younger, social services came to check up on my home (one of many) and that the neighbors in my trailer park donated food so it ‘looked good’ and we wouldn’t be yanked away. I didn’t have to ‘learn’ it was possible to live of ramen, that particular bit of knowledge I grew up with.
I can go on in this vein for the next twenty three years, Furry.
But that’s not the point. The point is, that’s the second time you’ve posted raising questions regarding my experience, when most people online know that it’s pretty much impossible to validate experiences online.
My question, and I do have one, is this.
Why aren’t you replying to my argument about the unhealthy vs healthy purchases of the food stamp card, instead of casting your doubt about my experiences as a rejoinder?
But you never answered me. Do you still advocate for only healthy food being bought with the cards, when that route, to my mind, brings less food to the table?
A.W writes:
I DID NOT SAY I COULD LEGALLY BUY. How could I possibly qualify for something illegal? Buying EBT cards is ILLEGAL, yet there is a liquid underground market in the stupid things. That’s a pretty good clue that the program is broken, just as the “coupon” program that EBT cards replaced was broken. When I was in my late teens, early 20’s I could have bought food stamps as well. Not like it’s some kind of massive secret.
I’ve written repeatedly about underground economies and undervaluation of benefits by benefit recipients as examples of why these program do not work. I’m also able to buy crack cocaine, heroin, unlicensed guns, stolen cars and a lot of other things. Would you like some crack? I used to know a crack dealer before he was arrested for robbing a pawn shop.
As I said very early on — my real world experience spans the entire range from profoundly poor to snotty rich. One of the ways people like me can tell when we’re talking to people who’ve either never been poor, or never really be in the poor universe is how well you understand things like “underground economy”.
A.W writes:
Because arguing about “healthy” versus “unhealthy” is like arguing about which hand to use to wipe your butt when you’re out of toilet paper.
The program is broken. Healthy food or unhealthy food won’t change that. Changing from “unhealthy” and less costly to “more healthy” and more costly is like pushing rocks around. The rocks get moved, but you still have a bunch of rocks at the end of the day.
What I advocate is getting people off the programs. Making it less than pleasant to be on welfare, while at the same time giving people the tools to survive. A carrot and a stick. If you can’t find a job, you now work for the State. If the state is going to pay you, you might as well earn your keep, even if it’s just sitting on kids while their parents work, or take classes, or pick up trash by the side of the road.
No need to shout. I typed that post as you were typing yours, Furry.
And I said we don’t have that type of program here. Since we don’t have the program, why would i know how to scam it? You can check for yourself. I live in the endless mountains, on the ny/pa border. And if you’re basing one program that I don’t know how to scam that isn’t even in my area on my ‘poor acceptability’ rating, that’s…well, pretty damn stupid.
In that case, you’re opinion that ‘convenient’ food be taken off food stamps and healthy food should be placed in doesn’t make any difference, so why suggest it?
Never mind that the unhealthy set feeds more people for a longer period of time than the healthy ones do, with your reasoning, it’s all the same.
I should probably make the benefits in my area clearer. There’s only one type of card here, and both the money and the foodstamp benefits are on it. There isn’t a way to buy or sell a card here.
Welfare recipients don’t pay sales taxes? FICA taxes? If they sold a capital asset, they’d be exempt from capital gains taxes? That’s news to me, and I used to work in the IRS’s General Counsel’s Office.
Yes, the Earned Income Tax Credit (EITC) pays money to working poor people as a function of their earnings; that was it’s design. (Ironically, poor people now cheat on their taxes by exaggerating their earnings in order to increase the amount of the EITC they receive. I’ve heard that roughly half of all IRS audits are of people who earn less than $25k/yr; they’re looking for this kind of cheating.)
While the EITC began in 1975, Reagan greatly expanded it as part of the Tax Reform Act of ’86. So if you think it’s too generous, blame Reagan.
In contrast, the original Bush Administration child tax credit did NOT provide for a refund in the event the taxpayer lacked sufficient tax liabilities to use the entire credit. By design, it subsidized the kids of the middle class and excluded the kids of the poor. (To be fair, the Republican Congress was eventually shamed into changing this provision. See IRS Form 8812.)
I believe this to be accurate, although I don’t know about “much, much less.” But it’s worth noting that most people in the lowest 75% of income earn their income through wages. Because of federal reporting and withholding, there’s a very low incidence of underreporting of wage income. In contrast, most people in the upper 25% earn the bulk of their income through means other than wages. The great bulk of tax cheating is done by this class. So when you compare nominal rates of taxation, remember that an estimated 30% of the wealthy’s income is never taxed because it’s never reported.
I believe this also to be accurate. I see no conflict between this statement and the prior statement.
Hard to know how to measure it. See my example about the percentage of Americans in the top 1% who join the US military.
Is America so rich because we’re smarter and stronger and more talented than everyone else, or because we’ve created a system where people can make the most of whatever brains and strengths and talents they have? Lots of people benefit from the American system, but the richest people benefit the most. Is it so bad that they contribute the most to maintain it?
I believe in the laws of revealed preference. As you note, the richest Americans have lots of options, including the option of moving elsewhere if they wanted to. The ones that remain may whine about being over-taxed, but the fact that they haven’t left tells me otherwise.
To be sure, America benefits handsomely by attracting the best and brightest people to our shores. Each time we recruit another Indian engineering student to an American grad school, we get the benefits of her brains while leaving the cost of her upbringing to be borne by poor ol’ India. It’s quite a reverse-Robin Hood scenario, stealing from the poor to give to the rich!
But what about the poor family with lots of kids? To be sure, society spends a lot on them. But is it fair to attribute the cost of child rearing to parents, rather than to society? If we attribute the cost of child rearing to a parent, we arguably should attribute the child’s productivity to that parent also. And because Americans are the most productive people in the world, child production is one of the most productive pursuits any American can undertake.
In sum: On average, more Americans = more productivity. Yes, in the short term, kids require a financial outlay, but so does every investment. In the long run, they pay big dividends on average. So don’t be too quick to condemn that poor family with lots of kids – provided they can do a good job with those kids.
I’m enjoying this discussion, and I appreciate everyone’s throughtful remarks. I can be pretty detached about it all, but I understand it cuts closer to some people’s bones than it does mine. I don’t know any of you personally, and I don’t mean anything personally. I hope everyone can keep the discussion at that level. :-)
A.W.,
Food stamp coupons had the same problem. That’s why I have issues.
Understanding the problems with welfare programs is a big part of what it takes to understand how the programs are broken.
What would I do instead of food stamps? Food. Don’t like rice and beans? Oh well. It’s what I wrote up thread — being entitled to food doesn’t mean you’re entitled to food you want.
A.W —
That’s what we’ve got, too. The card shows a balance of both money and food stamps. When you get run up the amount off food is taken out as food, and the non-food comes out of the money. If you need money, you use it like an ATM card and it comes out of the money.
Would you like me to buy you one? The going rate is $0.50 to the $1.00. If you wait until after the first of the month I can probably get you several.
I’m not sure if the “twenty three years” comment above is your age. If so, you’re still very young, naive, and less than completely jaded. If not, you’re just naive and idealistic.
n.r writes:
Whether or not “more kids” benefits parents, families and the country in general depends in large part on the strategy the family uses with the children. If the kids are just baby sitters or a way to get more benefits, the odds that the family as a unit is going to advance economically is nil.
As with any investment, there’s a point of diminishing returns. I have fruit trees in my yard. Not so many that I can’t pick all the fruit without hiring illegals :), and not so few that I get nothing of substance for my efforts. Kids are the same way — too many and they all suffer, too few and the family unit suffers. The trick is finding the balance.
The biggest problem facing this country, in my opinion, is a lack of understanding about how “economics” works. I was approached by a co-worker who knew I was saving for tiny munchkin to go to college. She had a daughter and asked me how much she should be saving. I asked her daughter’s age — 16 — and responded that it was too late. Tiny munchkin has been the target of college saving for all but about 2 years of his life, and it may have been those two years as well, I just don’t remember that far back reliably enough to say so. The kid is, to say the least, quite well off — based on current projected college costs he’ll go to college and leave without any student loans. If he manages his money halfway reasonably (and he manages money pretty well, considering he’s done it his entire life just about) he may have enough leftover to put down on a house.
The problem with the old foodstamps was people got money back as change and some wasted it, which made problems worse. And that the amount wasn’t enough to pay for healthy food. Yeah, some people are asses and use the system. I don’t believe it’s by any means the majority of the people that need the cards.
The food people should have is healthy. Fresh food, the kind people can’t afford to live on with foodstamps. Tell ‘rice and beans’ to a four year old who isn’t getting adequate nutrition. Rice and beans can be a wonderful staple, but it doesn’t even shake a stick at fresh fruit and green vegetables. It isn’t so much ‘food you want’ as ‘food you need to be nutritionally healthy.’
Less problems with health if people eat right when they’re young, anyway.
I’d rather a type of national system where everyone gets a card with an alloted amount, and extra food benefits are put on the card because of extra work someone chooses to do for communal benefit, that way everyone can participate if they want. There’s a wide area of work that needs to be done, and it seems like there’s more than enough.
Then I don’t understand how so many people are selling the cards. There’s not a person to be found selling a card here. The welfare office get’s suspicious of people who lose their card and it costs five bucks to replace it. It sounds like people who don’t need the cards are selling them. Your welfare office is extremely shoddy if it can’t even figure out that someone who requests a new card every month is screwing them over. There’s another difference, I can’t think of anyone who has a card that doesn’t need it, although I can think of several people who’ve receive ssdi benefits that didn’t.
And I’ll take you up on the offer of cards, thank you. Very generous. My email is pheonixborn at hotmail dot com if you’re serious. If you’re not as serious as I suspect, (must be my naivete showing) I’ll gladly decry the false generosity to all and sundry. Which is basically complaining at my blog. =/
FCH,
Because people can’t sell food?
Also, that there is a market in illegal food stamps or food stamp cards doesn’t mean the system is broken. The measure of whether the system is broken has to be based on whether it effectively provides the intended service (food for poor people) at a reasonably efficient cost. Some loss due to theft is not proof that the system is broken. I’m sure you can find someone who can sell you a TV that “fell of the truck,” that isn’t proof that the private, for profit, television distribution system is broken, is it?
A.W,
I’m not going to send you a card I buy illegally. I was born at night, but not last night.
If you’d like to learn more about food stamp fraud, Google for it. Google is your friend :)
How does it work? Well, as I have explained at least twice now, I come to you and offer to sell you some amount of “food money” on my card. You agree (or not). I hand you my card, you hand me your money. You go to the grocery, spend the money and hand me back a receipt showing the balance. There is no “lost” card. No going to the food stamp office. No paying $5.00. Which is the other reason I can’t send you one — “buying” the “food money” doesn’t mean you get to keep the card.
And you might want to tell people who quite fine on “rice and beans” that they can’t. “Meat” is a status food, not a necessity — those super-smart Indians eat 5 lbs per capita, which is less than people starving in Sub-Saharan Africa eat (13 lbs) and “Low Income Countries (8 lbs). (source) If it’s good enough for brainy Indians, I think it’s good enough for soon-to-be-brainy Americans. I like my dead animal flesh (yum!), but I’m paying for mine. You want meat? Get a job.
The problem with the old “coupon” program is the same as with the new one and the same as with the next one — people will figure out a way around it, even if it hurts them. Back in the 70’s when I clerked in stores that took stamps, we had to give dollar stamps plus pocket change. The scammers would figure out how to buy whatever so that they could get back the maximum amount of pocket change, even if they bought one or two items at a time. $1.09 pack of noodles? Great — with tax that’s $1.14, and $0.86 change. Cigs were $0.57, plus tax, or about $0.62 (8% non-food, 5% food, as I recall). And so that was the game that got played.
It’s for that reason that I really do believe benefits should be cut in half. When recipients learn to stop playing games, raise the benefits back to where they should be. Actions have consequences and going hungry is something I’ve done more than once in my life. Didn’t kill me, it just made me resolve to never be that poor ever again.
You said sell the card. Not sell the money on the card. Big difference. And offering something you weren’t planning on doing in the first place, while not a suprise because I didn’t consider it possible, still isn’t quite …oh, there’s words for it.
Did you miss the part where I typed that rice and beans are not the same as fresh fruit and vegetables, which was what I was comparing it to in that post, not meat? I did not type meat, I typed fruit and vegetables. Those are neccessities which you can’t afford on foodstamps. Big difference there. I said the price of meat is ridiculous, and the meat priced lower is more often fat than not.
How you explained how people sold cards earlier is not what people, according to you now, actually do. You said you could buy a card. Not buy the money on the card. Big difference, again. I’m beginning to wonder wether they sell the money on the cards where you are, or if you’re daydreaming large amounts of thievery when there’s few examples in reality.
Actually, FCH never claimed that there was large amounts of fraud relative to the amount of money distributed as food stamps, just that there was some fraud, and that in some arbitrary sense it was enough fraud to make food stamps be broken in her opinion, she just implied by using the word broken that the amount of fraud was large relative to the amount of money distributed as food stamps.
Of course, “here, give me some money, take my card, go buy some food worth more than that amount of money, then bring me back the card” is:
1) not a transaction that happens on the mass scale of most significant welfare fraud (like performing millions of dollars of imaginary dental care on people on medicaid, which only requires a single crooked doctor)
2) not a transaction that costs the government (or FCH via taxes) anything (we agree that Joe should get $50 worth of beans and rice and collards to get through the month, so Joe gets a card with $50 cash on it, but he decides he’d rather buy $20 worth of jazz albums this month than eat, so lets Martha borrow his card and buy $50 worth of food for herself if she’ll give him $20 cash so he can buy that album – Joe is short on food and has the album, but we as government/tax payers are only out the $50 we decided we should be out)
3) would not even be an illegal transaction if we gave Joe a basic guaranteed income and left it up to him how much of it to spend on food.
4) a transaction that still involves someone buying $50 of groceries
However, “Google food stamp fraud” is really a completely inadequate answer to the question of “how large and meaningful of a problem is this?”
Charles, it also indicates that – although we were willing to shell out the $50 – we didn’t actually need to. The idea that we must, as a matter of humanitarianism, ensure that people can eat is compelling. The idea that someone who must be compelled to eat in order for him to actually eat is also our responsibility, is somewhat less compelling.
That’s a lot of compels but the gist is clear, I hope. If people would rather have jazz albums (or, more realistically, drugs) than food, that is certainly their business, but – other than in a how-do-I-defend-my-family-from-him way – not mine. So screw Mr. Jazz Fan.
The difficulty, of course, is that it’s very hard to know which food stamp recipient is going to sell their card for $20 to get smack, and which one is going to buy healthy vegetables for the family. That’s one arena in which private charity is somewhat superior. Not that private charities have magical powers of discernment (though they do have an advantage in being able to turn away clearly fraudulent clients that the government can’t really replicate), but that they are much better positioned to provide aid in kind. It’s pretty hard to rip off a soup kitchen. (“Ha! I’m going to regurgitate that meal and sell it for crack.”)
The advantage “charity” has over “entitlement” is that charities can come with strings attached and people can, and do, make decisions about charities based on how well they are doing their job. Some charities enjoy very good support, others are criticized and respond or lose funding. The American Red Cross is one charity that has faced declines in contributions because of mismanagement, then had to adjust their policies.
Robert really hit the proverbial nail on the head — in-kind contributions have a significant advantage over money contributions. I remember back in the day when the USDA handed out surplus cheese. I knew of people who gave away their free cheese, and people who received others’ free cheese, but unlike food stamps, I don’t remember anyone selling it for drugs or booze.
There are studies that do show how all this benefit card selling and buying works — here is one I was going to post earlier. It found that food stamp benefits were being sold for about $0.61 on the $1.00. It also shows where the money is being spent. Perhaps A.W will now see that trade in food stamps isn’t some fantasy I’ve got dreamt up, especially if he reads page 49.
Another advantage of in-kind contributions is the people controlling which foods are distributed can make sure that the food is better balanced. Rice, beans and collard greens (that’s some pretty racist sh*t you posted, Charles) aren’t a poorly balanced meal — starch, protein, leafy green veggies. WIC does this to some extent, I’d like to see the WIC approach applied to food stamp programs. There’s no reason for soda or flavored water to be on the food stamp program.
Well, personally, I’d like the entire food stamp program and the entire welfare program to be replaced with a BIG or a NIT. That way, people could decide for themselves how money is best spent, rather than having the nanny state all you conservatives favor decide for them. :-P
But what really made me post is this:
I’ve been letting you get away with a condescending tone and disrespectful comments to the other posters here for a while. But enough is enough.
1) Collards are food that everyone in the South, regardless of race, eats if they’re looking for cheap greens to go with their rice and beans. If you have some racist stereotype that only blacks eat collards, that’s your racism problem, not Charles’.
2) You’re acting like a jerk. Stop it.
Blink.
Oh right, jazz is the culturally marked as the music of black people, and not the music of trendoid white thirty somethings (I know more white jazz fans who might sell their food for jazz albums than black jazz fans who’d do so, so the image in my mind for jazz fan was white), and collards are simply southern food, but are culturally marked as black food outside of the south, and not simply the hardiest of leafy green vegetables that go with beans and rice (I almost used chard as my leafy green, but I figured chard would not be a FCH approved leafy green for poor people because it goes bad too quickly, and while I’m sure there must be cabbage, rice and bean dishes that are good, there aren’t in the cuisines I mostly think in terms of, and the idea of combining cabbage with rice and beans (as I was imagining rice and beans) struck me as gross.
Oh, and while Martha is one of the least stereotypically black names I can think of, the new companion to the tenth doctor in the new Doctor Who series is both black and named Martha.
I can see how the least generous reading of that example imaginable could be that it was a racist example, but I think you have to try pretty hard to get there.
If you are more concerned with ensuring that no one cheats you and uses the money you gave them for food for anything else than you are with not wasting money or inflicting unnecessary misery, then direct hand outs of food are preferable. But direct handout of food, particularly hot food, are very inefficient in time and money and effectiveness, both for the program handing out food, and for the people accessing it. Like any restaurant, food programs have substantial wastage problems, and providing food in a single location means that people have to travel to the site and wait in line for food for each meal, which is extremely disruptive to normal working life. Likewise, generic meat soup is unsuitable food for plenty of people, both for cultural and dietary reasons. If you are handing out food, you are much less able to tailor the food to people’s needs and preferences than if you are handing out money with which they can buy whichever food stuffs they prefer.
Such programs could just as easily be government run as privately run, and have been, as with the example of government cheese. Focusing on having the food programs run on a charitable basis adds in the additional trade off of not having anyone forced to pay for it with the down side of not providing adequately for everyone who needs it. Running the social safety net on a purely voluntary basis has been tried, and there are reasons we don’t do it anymore. Charity is an extremely unreliable and irrational mechanism for funding necessary social services. If you disagree, why is it that you don’t favor switching the services you rely on (like police or roads or the military) to a purely voluntary basis (God knows, maybe you do, but thankfully that is a beyond fringe libertarian position, and I don’t even have to fear that you and your allies will ever succeed in imposing it on me and mine)?
If you are afraid that anyone will ever cheat you and manage to get something they aren’t allowed or don’t deserve, and you are willing to see innocent people suffer to protect you from that happening, then charitable distribution of food items instead of government run distribution of food money is a great way to go. Personally, I’m not terribly afraid that some small portion of my taxes will go to cheaters, nor that someone will manage to finagle a way to do stupid and self destructive things with my tax money, so I’d rather see more people actual able to eat well without having to run through ridiculous hoops and accept some cheating and self destruction.
I also prefer a BIG to food specific aid, but I can certainly see a benefit to food specific aid, as it ensures that there is more of a minimum of support beyond which you can only by intentionally fucking up.
I could get behind a BIG or negative income tax. We’d be able to save a lot of money by cutting back on bureaucracy. Especially if we included money for health care. Instead of Medicare just combine an appropriately sized deduction (for the cost of insurance) with a negative income tax.
(what was the original topic again/ is there an prize for thread drift. )
Hi Joe, sorry I made your name my example food stamp seller!
I think universal health insurance (single payer) is preferable to providing cash for insurance, mostly because individual health insurance is hugely variable in price by individual health history and not even available to some people (I know, I know, they should have just planned ahead better and not gotten cancer! Silly sick people…).
Also, the private health insurance industry is fantastically inefficient, and makes the whole health industry inefficient and unnecessarily expensive, so there are huge gains in decreased bureaucracy and health care cost from killing off the private insurance industry.
Charles,
What is this thing you’ve got with calling me a libertarian? I have issues with welfare programs because they don’t work. I also have issues with perpetual motion machines. Is there a political affiliation of people opposed to such things?
According to you the grocery store cannot exist? Is that what I get? The centralized location where people have to travel to get all their meals?
Program costs include not just the dollars given for food, but also the administrative overhead and enforcement, fraud, and the cost of poor choices — sodas, flavored sugar water, junk food, etc.
Since we’ve now apparently shifted to public health insurance, I’ll repeat what I said upthread — what the government funds tends to increase. In the case of public health care, this is not a bad thing. The current health care “system” is based on crisis management — sick children without health care are taken to emergency rooms for what could have been managed outside the emergency care system. The elderly fail to get routine exams when conditions such as cancer can be detected before requiring drastic life-saving measures. Not exactly efficient. Since the government is already paying for emergency care, the government could save significant sums of money by providing routine medical care at the general practitioner level. That’s right — Julie the Evil Libertarian is suggesting that it would save the government money to make routine physical exams a part of public health care. How evil can I possibly be — forcing people to get routine medical exams so that crisis medicine is avoided and government expenses are reduced?
Anti-poverty programs simply do not work — the programs are too interested in their own perpetuation to effectively reduce what the are established to treat. What changed in 1996 — and I don’t think Bill Clinton was any kind of Libertarian — was the emphasis was changed from welfare as a way of life (and any program with a 45% recidivism rate can hardly be called anything but a “way of life”, even though lefties love to say welfare isn’t a “way of life”) to a transition to self-sufficiency.
What’s always fun about welfare debates is how hard people try to claim that welfare pre-1996 wasn’t a way of life. Here’s a quote from an APA article which tries to debunk the “myth” that welfare was a way of life —
Oops.
Amp writes:
Yeah, but southern whites who eat rice, beans and greens don’t listen to Jazz. Charles couldn’t have nailed racist stereotypes better if he’d used a sledge hammer.
I hardly think the constant “libertarian fantasy” insults you and others keep slinging my way count for civil discourse. Several of us that you keep trying to insult with either “libertarian” or “conservative” labels have repeatedly said we’re all for programs to make sure that people who don’t have money for food can get food. We’re simply opposed to wasteful programs, rife with fraud. Nor do I think big-L Libertarians think the 1996 welfare reforms were a “good idea”. If I have the right sense of Libertarians, my guess would be that they’d like to completely abolish the programs rather than find ways to make them cost less and work better.
Personally, I think the 1996 reforms were a nice start. Considering how effective they were (here and here), I think more changes in line with those reforms — expecting recipients to work, providing for education, job opportunities, health insurance for children, daycare support, etc. — proved that the leftist nanny state that handed out money, no strings or expectations attached, was a dismal failure. I’d be hard pressed to find either Libertarians or right wingers who advocate turning welfare into a public works and adult education system.
So, if you want a respectful tone, try being less of a jerk yourselves.
My post at 241 was supposed to include emphasis on this sentence —
Sorry for any confusion.
So let me get this straight. You think I and others have acted like jerks, but you don’t accept that you’ve in any way acted like a jerk yourself. You think that I owe you an apology for my “libertarian fantasyland” comment, but you don’t think you owe anyone here an apology for your own behavior.
Is that correct?
Curious how various themes in this discussion combine.
The authors noted that the BIG and NIT programs lacked a powerful political constituency but were supported by, among others, free market conservatives who favored these programs to the more prescriptive social welfare programs that garner more support. Since then, the author who initially proposed the ‘96 welfare reform (can’t find his name) has a new book proposing that we collapse basically all welfare programs into a single monthly check paid to every citizen.
I remain concerned about the public’s basic lack of economic literacy. Again, it should come as no surprise to anyone that a social welfare program would reduce people’s participation in paid labor to some extent, or that people will seek to exchange food stamps for cash to some extent. And the suggestion that government could “discipline” the class of welfare recipients by reducing the amount of foodstamp subsidies by 50% (or whatever) to discourage financial transactions seems pretty unlikely to work. It’s akin to saying that government will double the tax rate until people stop cheating on their taxes.
As Robert notes, there’s a simple way to keep people from playing games with food stamps: give them cash, and let them make their own decisions about what to do with it. This has its own problems, of course. First, there’s the “pimp” problem: The program would create an incentive for one person to control another in order to control their revenue streams. Second, to the extent that I care about subsidizing some behaviors but not others (e.g., drug use), I may prefer trying to discourage using the subsidy for other purposes. Let me elaborate on this point further.
Now, I might prefer a more free market program. But without a powerful political constituency supporting such a solution, it would simply be a lamb awaiting slaughter. So we end up with a second-best solution … and if you’re shocked that food stamp recipients would exploit government largesse, hang onto your hats. The amount of money skimmed from this program by poor people is peanuts.
What percentage of the Health and Human Services budget is lost in foodstamp fraud? Zero. Foodstamps is not a HHS program. It’s a program of the Department of Agriculture. That right; foodstamps is a farm subsidy program dressed up as a social welfare program. And that’s the real reason why we can’t convert food stamps into a free market grant. But it’s also the reason that foodstamps endures whereas the NIT and BIG do not: it has a powerful constituency defending it against cuts. Basically, people who care about subsidizing the poor have to pay protection money to Big Agriculture in order to let a little of the funds trickle down to the people we want to help.
Like I say, we never get to choose between all good and all bad; we merely get to choose between better and worse. That’s the way it works.
Amp writes:
No, I don’t think that’s correct. But if you’re going to sling around “libertarian fantasyland” insults, you can expect to be treated less than respectfully.
You didn’t see fit to admonish nobody.really after 172’s strawman and gratuitous insult, whatcha expect?
I know that I’m really easy to confuse with Libertarians — being all supportive of making welfare programs actually work, as opposed to just shutting them down completely. I suppose it was a pretty easy mistake for you to make …
nobody.really writes:
And if you really want to be offended, look at what’s going on with subsidies and ethanol, and with how corn subsidies and the greening of ethanol have done to food prices. Bush, Jr. is concerned what Kyoto would do to the economy, but he’s apparently paid no attention to what ethanol is doing to the economy and environment.
Here’s one good article that covers the basic mathematics of ethanol and exposes how lousy it is.
There’s this as well, but it’s less fact-filled and more political (though if you follow the links in the article you can get some facts with your political commentary …)
Ok, the “libertarian fantasy” remark was mine, back in post 172. Credit where credit is due!
I made that remark specifically in response to FurryCatHerder’s suggestion that someone would expect to stop contributing to Social Security, yet continue to receive the government services other than Social Security retirement benefits. I called this a fantasy because it assumed that the only benefits we get for our FICA taxes is retirement benefits. I understood FurryCatHerder at post 179 to concede the point that FICA taxes support things other than retirement benefits, although he maintains his argument that the retirement benefits program costs too much.
All of this discussion occurred outside of the discussion of income supports, food stamps, or other social programs.
Anyway, I think my “libertarian fantasy” remark was appropriate – if not always helpful – to the discussion at the time. I intended the remark to illuminate the weakness with the argument, and not a commentary on FurryCatHerder personally. I apologize for any offense I caused FurryCatHerder, as well as to Amp for having needlessly sidetracked an otherwise engaging (and usefully sidetracked) discussion.
As for ethanol, well, yeah. Allegedly cellulosic ethanol is the real deal but, of course, because Big Agri doesn’t grow switchgrass, it isn’t getting the subsidies that corn ethanol is.
Hey, I sense there’s a lot of agreement here about the role of government to implement cost-effective programs to make the world better. And that’s as much as I expect these discussions to achive.
N.R,
Thanks. I don’t expect blog owners to understand the subtleties of blog insult politics :)
I still don’t think, despite your best efforts, that FICA is a cost-effective program, no matter how much secondary benefit the feds get from borrowing a few trillion dollars at nice interest rates.
And I’ve not seen a response, because we ran down the rats nest that is welfare, to my comments that FICA is a form of double taxation for the middle class — the first instance being the 12.4% tax itself, and the second being the need for the middle class to save for itself. If there’s a weakness in there I’d love to see it discussed.
And finally, for future reference, I’m of the ‘she’ variety. I know that people get confused over whether “Furry” modifies “Cat” or “Herder”, but I swear — it’s the cats I herd that are furry, not me.
— Julie.
I have a libertarian fantasy. It involves a consenting adult, and a lot of olive oil.
Did I say that aloud?
FCH,
What’s fun is watching you brilliantly rebut ghosts. Who in this discussion has argued that “welfare pre-1996 wasn’t a way of life.” Many people who are extremely poor stay extremely poor for a very long time, so any effective welfare system is going to provide support to those people for a very long time. Do you really believe that before the 60’s-90’s welfare system, there were no families that remained impoverished for generations?
Certainly, welfare systems that have hard cutoffs (got a job? off you go. went to school? off you go. Or even just, made $9000 last year? off you go.) create extremely perverse incentives where people become stuck (although off again on again welfare participation (recidivism you call it, as though being on welfare was a crime) is not a demonstration of that sort of perverse incentive, and time limits are not a cure for those perverse incentives). I don’t think anyone has argued against that. But before we wandered into food stamps, we were talking about FICA and BIG, two programs with no perverse incentives.
FICA works the way it does because it was and is designed to meet the real immediate need to provide income support to poor and middle class old people NOW, not years from now. Social security does an very good job of ensuring that almost no one is in poverty when they are old. The program works. If we switched to a system of invested retirement accounts, we would need additional taxes to pay for providing income support to poor and middle class old people. I suppose we could switch to a system where the Social security surplus is invested in something with a higher rate of return than Federal bonds, I wouldn’t have a problem with that (although a lot of conservatives go into a tizy at the idea that the Federal government would end up owning a huge portion of private industry).
BIG would provide a base line income to everyone, freeing people poor enough to be on wellfare from the perverse incentives of needing to protect their income source by staying poor, would make it easier for people to go to school when it would help them, would make it easier for you and Michael to take unpaid sabbaticals, etc.
The universality of both these programs is intended to avoid creating perverse incentives. It is true for both programs that at some income level the programs cross over from being a benefit to being a tax that provides others benefits, but that is simply inherent in the fact that someone has to pay for them.
One of your cites on how well post 1996 welfare has worked was from the Heritage Foundation, the other one points out that the new welfare system has shown no improvement for those leaving welfare and has worsened conditions for those who are denied access to welfare in the first place, and counts being forced to work sub-minimum wage make work as an improvement in the lives of those on welfare. The increased EITC is about the only portion of the changes to the welfare system that I entirely support. I also support the states (a minority) in which pursuing education counts for the work requirement. I also support the improved access to food stamps (something you appear to oppose).
We know that the 1996 welfare reform was not a horrible disaster for most extremely poor people (we know it was a horrible disaster for some extremely poor people). We also know it wasn’t much of an improvement. This country has too many people who hate the idea of someone else getting something the don’t deserve to much for us to have much hope of having a welfare system that is actually effective in combating poverty (European countries with rates of pre-benefit poverty comparable to the US are able to reduce post-benefit poverty to much lower levels than the US does. To me, that is the goal).
Charles opines:
FICA works like it does because when it was invented, enough people covered the ones receiving it that it was going to work. Unfortunately, people stopped doing the government the favor of dying so young and actually started collecting benefits.
Once that happened the system was doomed to become the failure it is, and the elderly lobby gained enough power that it was never going to be made solvent, ever again.
The easiest, and most realistic fix, is to “inflate” the retirement age to take into account life expectancies, but y’all would never go for that because then those poor old people, who are only “poor” because they have no earned income, wouldn’t be taken care of. And the poor dears might actually have to work at age 70 or 75.
The goal of old age isn’t supposed to be dying rich, and yet those poor old people, if you look at the grow in estate size, keep doing precisely that.
Social Security is yet another wealth transfer program, except that instead of transferring it from the rich to the poor, it transfers it from the poor (the working middle class who’ve not paid off their houses yet) to the rich elderly class (the ones who persist in dying old and well-off — again, look at the growth i the average estate size).
You want to defend Social Security? Fine — I’ll just keep pointing out that it’s a Ponzi scheme. When it started it took 33 workers to support one retiree. Now we’re down to about 3. The only way to get that ratio back to something more sustainable is cut the outlays, because the baby boom isn’t going to stop getting older just because Social Security is running broke.
And you complain that the proposed solutions would require that taxes be raised — well guess what, come 2018 the Feds are going to have to raise taxes anyway. Should we put those new taxes into a system that doesn’t work, or should we put those new taxes into something where each individual funds their own benefits?
And this “BIG” thing — great idea. Except who is going to pay for it? Tax revenue doesn’t grow on trees, and while it might be a nice idea for people to get to take some time off, who the hell is going to pay for this? And every other “nice” idea you come up with? The rich? Taxing the rich into oblivion doesn’t work because the rich will always have choices, including not working and thus not paying taxes, that the poor and middle class don’t have.
You might hate the idea of people doing “make work”, but there is no such thing as “make work”. Make work is practice for … work … and if the idea is to get people off welfare and into the work force, I’m all for work, practice or real.
Do I oppose an increase in access to food stamps? Sure. Show me the evidence that people are going hungry and show me the proof that increasing access to food stamps is going to reduce this non-existent hungry. Where are all these starving people that once again I should be sacrificing my ability to retire or pay for my child’s education? I have my own obligations and part of what really sucks about being middle class is we’re the ones who are expected to pay for other peoples obligations.
Hunger and food insecurity rates in Oregon improve when Oregon raised the income cut off for foods stamps, and relaxed the asset restrictions and began major outreach.
I’m sure you will “find it interesting, but that it will raise more questions than it answers.”
I’m fine with raising taxes to still ensure that poor old people (you do recognize that there are poor old people, and that they would be much poorer if they did not have social security income, right?) still have benefits, and using the additional tax revenue to create larger guaranteed social security benefits for later generations (me). You are the one complaining about taxes.
Our tax rates are not very high, and could certainly be higher without causing the rich to decide to become poor instead. Our country is facing a growing income inequality between rich and middle class, which both means that the growing wealth of the nation is getting to only a few, and also that there is plenty of room to redistribute some of that wealth without even decreasing the incomes of the rich (just decreasing the rate of growth of their incomes).
Two things about this debate that apall me:
1. The willingness to disregard scientific evidence in favor of ancdotal evidence that supports people’s opinion. My link was to an accademic summary of at six different studies conducted by two different governments that are well regarded for their methodology, and none of the dismissals have made or cited any actual criticisms of the specific studies.
2. All of the discussion of ancedotes about welfare recipients. The behavior of welfare recipients is IRRELEVANT to a discussion of basic income. A BIG or NIT is completely different, and is an abolishion of poverty. If you want to cite bad ancedotal evidence against a BIG or NIT, then talk about trust fund babies. I’m sure there are plenty of bad ancedotes there, and the comparison would at least be relevant
Charles,
Could you provide me information on the numbers of people in Oregon who died from starvation or malnutrition? I could improve my “hunger” if I got the car and got some ice cream for desert. Doesn’t mean I need that ice cream, just means that if I eat more, I’ve got a bit less hunger.
Point being, one of the articles I posted upthread showed that current food stamps provide more than USDA for calories and nutrients.
Secondly, I’m all for wealth redistribution. Never said I wasn’t — what I object to is that Social Security is a form of wealth redistribution from the poor to the wealthy. If you drag out the Census data on family wealth what you’ll see is that net worth increases up until just about death. The computer that had the article open on it has crashed (I broke the monitor on my laptop today — such is life) , so I’m having to go from memory, but the median net worth for “those poor old people” is somewheres around $110K. For “us rich young people” it’s about half that. To date I’ve paid about $57K in FICA (I could get you the exact amount — I keep track of such things …), which tells me that people like me are handing our money over to the elderly who’ve already got plenty — networth for age 65 is less than the whole population group aged 65 and above.
If you’re looking to redistribute wealth the single best way to accomplish it is to abolish Social Security. Personally, I’m opposed to that because I do believe in social welfare programs for those who actually need them. But with so few of those aged 65 and above having a net worth that puts them at risk of poverty, Social Security as a program for those “poor old people” is just bad fiscal policy.
We’ve never gotten into what I’d personally like to see, but I’ll put it out right now — means testing. Let’s define an amount of wealth that is sufficient for the elderly and adjust Social Security accordingly. For those “poor old people” with net worths above $250K, which is the median for the 3rd quintile, they’d get nothing. They have plenty, they don’t need anything more. For those “poor people” at the bottom of the fifth quintile, let’s raise Social Security so that they have a more comfortable lifestyle. In between the payout is gradually decreased as it approaches the median for the third quintile. The net result of this strategy is that it would dramatically reduce payouts, wouldn’t be a wealth transfer from the poor working ranks to the rich retired ranks, and would very likely end all that “elderly poverty” that bothers you and I. This will never happen because the “elderly wealthy” are a very powerful lobby.
As for Decnavda’s remarks, it suffers from the same basic flaws as what Charles wants — who the hell is going to pay for this? Whether or not “basic income” is a good idea, someone has to pay for it. What’s needed isn’t yet another entitlement program, what’s needed are ways to reduce expenses. No government has ever taxed its way to prosperity, and while spending a nation’s way to prosperity works in the short term, sooner or later the bills come due and the house of cards collapses.
I’m also unclear how this “BIG” or “NIT” thing even differs from pre-1996 welfare. Call it whatever you want, it’s a pile of money given to people, except that in this instance there’s an even larger pool of people who are eligible. If subjected to the same restrictions as the post-1996 welfare reform, and means tested for wealth, I’d be all for it. But then, I’m all for the post-1996 welfare changes that require work, and I’m all for means-testing Social Security.
As for Decnavda’s remarks, it suffers from the same basic flaws as what Charles wants — who the hell is going to pay for this?
We are all going to pay for it. Same as happens with Defense spending, for example.
… what I object to is that Social Security is a form of wealth redistribution from the poor to the wealthy.
You haven’t supported this contention, nor have you supported your contention (in the face of documentation to the contrary) that Social Security is doomed.
Of course the net worth of the retired is greater than that of those who have not yet retired. Those 65 and over have had 45 years or more to accumulate their assets. Those under 65 include significant numbers of folks who have had a decade or less to build their net worth. The question is, do we want to force the retired to sell off all of their assets and fall below the poverty line before we subsidize them? The answer was, and still is, “No!” We want people to be able to live out their lives without worrying about losing their home. We want people to live out their lives with the knowledge that they can pass a fair amount of their belongings onto their survivors.
Could you provide me information on the numbers of people in Oregon who died from starvation or malnutrition?
You might find http://www.oregonfoodbank.org/research_and_action/Dr.LarryBrown.html to be educational.
From that link:
While there was no single universal definition of hunger, our Harvard-based group defined hunger as “chronically inadequate nutritional intake due to low income status.” Whether chronic or episodic in nature, hunger was the lack of sufficient calories and nutrients for physical growth or the maintenance of good health. Frequently extending over longer period of time, it could lead to serious chronic health conditions both in children and adults.
So, “hunger” does not simply mean “leads to death by starvation.”
I find your comment:
I could improve my “hunger” if I got the car and got some ice cream for desert. Doesn’t mean I need that ice cream, just means that if I eat more, I’ve got a bit less hunger.
to be appalling. Either appallingly callous or appallingly ignorant.
You may also find this link to be of interest:
http://www.oregonfoodbank.org/research_and_action/who_is_hungry/documents/HFA2006Final.pdf
I started writing a longer response, but I really can’t past your mockery of hunger.
I’m done.
Jake writes:
That’s the only meaningful definition. Even when asked “Did you actually go hungry for an entire day” the answer is “No”. How can you claim there is all this “hunger” if people aren’t … going hungry?
The current definition of “hunger” includes “Have plenty of food, but not what I want”. When the War Against Foods I Hate was started, they were going to use malnutrition (see, I really do read this stuff) and identified, back in the 1960’s, over 200 counties where “malnutrition” existed.
Instead of sticking with “malnutrition”, which is an objective measure and can be worked towards ending, a four part scale was invented to measure “hunger”. The scale is unrelated to malnutrition, which is why you can’t provide numbers for “died of starvation”. The measure for “hunger” is now “poverty”, which is itself a proxy for “earned income” (see here for a discussion of how “poverty” is calculated and notice that “wealth” isn’t a factor in the “poverty” calculation). And yet, even people with $0.00 of earned income, have monthly cash flow both in terms of … cash … return on investments, imputed rents, and in-kind support. This is why the elderly, who have on average a net worth of over $100K are “poor” — they have no earned income. While the middle class, which has a significantly larger income, but a much smaller net worth, is “rich”.
If you look at this you see that far from being at risk for losing their home, the group I identified at where I think Social Security should be means tested (the third quintile), has a median networth, excluding home equity, of $100,900 at age 75 — seventy-five, not a typo — and above. Because the first, second and third quintiles are also likely the highest wage earners, they are also the largest recipients of Social Security benefits, while the fourth and fifth quintiles, which have the smallest net worth excluding home equity ($3,500 for the whole population groups aged 65 and above) are the smallest recipients. Opposing means testing of Social Security means that the rich get, and stay, richer, while the poor are stuck. You don’t have to be a rocket scientist to understand this, you just have to read page 11 of this Census report.
Furthermore, if you look at the accumulation of wealth within the over-65 age group, the elderly continue to accumulate wealth after reaching Social Security age, which tells me that they aren’t being paid too little, nor are they at risk of losing their homes.
The rich get richer, the poor get poorer. Meanwhile, the middle class is screwed — forced to pay FICA to rich people, and forced to save for our own futures as well. How is that fair?
FICA is a form of double taxation for the middle class — the first instance being the 12.4% tax itself, and the second being the need for the middle class to save for itself.
How is the need to pay FICA taxes while saving for yourself any different than the need to pay income taxes while saving for yourself, or the need to pay sales taxes while saving for yourself, or the need to pay capital gains taxes while saving for yourself, or the need to pay property taxes while saving for yourself, etc.?
I sense this argument boils down to, “This program costs me more than it benefits me.” In your case, perhaps it does.
It is not my understanding that Social Security itself is on the road to fiscal collapse. It IS my understanding that today Social Security tends to transfer wealth from the poor to the rich. And it is the understanding of the Comptroller of the Currency that the rest of the federal government – the government in which Social Security has invested its entire trust fund – IS on the road to fiscal collapse.
Assuming that federal discretionary spending grows with the economy and expiring tax provisions are extended, the federal Government Accountability Office economic models forecast the following:
2024 — Social Security, Medicare, Medicaid and net interest consume all revenues; the deficit hits 10 percent of GDP.
2025 — Net interest exceeds Medicare; debt held by the public exceeds 100 percent of GDP.
2035 — Net interest exceeds Medicare and Medicaid; debt held by the public equals 200 percent of GDP.
2037 — The deficit reaches 20.5 percent of GDP, exceeding the size of today’s entire federal budget.
2039 — Social Security, Medicare and Medicaid consume all revenues; all debt payments being financed by more debt.
2041 — Debt held by the public equals 300 percent of GDP.
2045 — Debt held by the public equals 400 percent of GDP.
2046 — Interest costs, at 21.6 percent of GDP, exceed the size of today’s entire federal budget.
2047 — Debt held by the public equals 500 percent of GDP.
2049 — GAO model cannot reconcile the resulting data.
Are we over-taxed? It’s well past time we reconciled ourselves to the need to be paying more taxes, not less.
On the other side of the coin:
[D]o we want to force the retired to sell off all of their assets and fall below the poverty line before we subsidize them? The answer was, and still is, “No!” We want people to be able to live out their lives without worrying about losing their home. We want people to live out their lives with the knowledge that they can pass a fair amount of their belongings onto their survivors.
Sorry. While I don’t share FurryCatHerder’s aversion to subsidizing the poor, I think we really cannot afford to continue subsidizing everyone else. I’m willing to tax people at WalMart to underwrite the provision of food, shelter and health; I’m not willing to tax people at WalMart to underwrite your ability to transfer property to your kids.
Time to focus on what’s truly important. We simply can’t afford the rest.
N.R,
Not sure what I’d have to write in order to convince you that I don’t have an aversion to subsidizing the poor, but I will say that this quote
sums up my attitudes towards Social Security.
I’m willing to tax people at WalMart to underwrite the provision of food, shelter and health; I’m not willing to tax people at WalMart to underwrite your ability to transfer property to your kids.
I agree with you there. The “we” to which I refer is the collective “we” of the USA to whom transferring wealth to our relatives is a high priority. Me? I’m in favor of severely restricting what may be passed on.
From FCH’s link:
The 55 -to-64 group’s median, $32,304, was nearly 10 times that of the under-35 group, $3,300, and significantly higher than the 75-and-over group’s $19,025.
I’m not sure how this supports your assertion that S.S. transfers wealth from the poor to the rich. This would also seem to show how quickly net worth erodes between the ages of 65 and 75.
Also, from Table F in that same link…
Look at how small the difference in median net worth between the age groups is once you eliminate home equity. And if you look at it by quintile, only the 1st, 3rd and 5th quintiles show an increase in median net worth between the 70-74 group and the over 75 group. I’d be willing to bet that S.S. income does not account for the tremendous jump in net worth for the 5th quintile – about 52%. The 4th quintile loses about 10%, the 3rd quintile increases by nearly 20%, the 2nd quintile is essentially stagnant and the lowest quintile increases 39%.
What does this show us? A meaningful bump for the lowest quintile & the 3rd quintile, no change for the 2nd and a huge increase for the highest quintile seemingly paid for by a 10% loss by the 4th quintile. How does this show a S.S as a transfer of wealth from the poor to the wealthy? It shows that the burden needs to be shifted from the 4th quintile to the 5th quintile, IMO.
For those “poor old people” with net worths above $250K, which is the median for the 3rd quintile, they’d get nothing.
Yet, if you exclude home equity from net worth, the median for the 3rd quintile is only $100k for those 75 and older. How long does $100k last? How long does it need to last? If you need to spend $20k/yr on property taxes, medical expenses, food, utilities, insurance, transportation, and so on it will last you for about 5 years if you get no supplemental income. Look at the actuarial tables from S.S. and you will see that the life expectancy of those aged 75 is for 12 more years. So they’ll fall 7 years short on assets. Unless, of course, they sell their home.
By all means, let’s have means testing. Let’s also not cap the amount of income on which we collect S.S. taxes. I just think that your limits fall short of what is required and is based on too simplistic a view of net worth and ignores life-expectancy actuarial tables.
I’m really personally conflicted on this one.
The law is currently, as it must be at current levels of taxation (I am not expert enough in economics to determine whether taxes should be raised, and if so how much) Medicare does not pay for nursing home use. The only public program which does that is Medicaid, and then only for the poor. Poor in this case means really poor, with almost no assets and almost no money.
Nursing homes, however, are quite expensive. The rich can pay for them. The very poor are covered by Medicaid. (Sort of. The best nursing homes sort of don’t take patients whose only source of payment is Medicaid.) The middle class, however, must totally exhaust their assets before Medicaid kicks in. (Let us leave alone, for the time being, the plight of the healthy spouse in a community property state.)
So. There’s a whole field of law (“Elder Law”) which is primarily concerned with evading these rules. How to get assets out of the hands of the elderly (but not really, you know, wink wink) so that they will qualify for public aid upon entering a nursing home. Lawyers are continually putting holes in the wall; Congress is continually trying to plug them.
I am attending a program next week which seeks to teach me how to evade the latest set of rules.
Yeh yeh it’s perfectly legal, it’s OK to evade rules if you can do so legally, I know all that.
But I don’t want to do this, you know? Just so the kids can get their inheritance, which should have gone for the support of the disabled parent, they throw the parent onto the public dole and run off with the loot? Am I the only one repelled by all this?
Jake,
First, I’m glad we seem to be looking at the same numbers for a change :)
I’ve read the same data you’ve read and I don’t see where you’re getting your numbers. You’re not comparing 2000 to 1998 and saying thinking that my claim is Social Security is responsible for the change, are you? Because that’s not my claim.
The quintiles are (and I numbered them backwards above — I’m stupid sometimes …) —
(Quintile — 65 to 69 || 70 to 74 || 75 and up)
1st — 32,000 / 2,900 || 43,230 / 2,885 || 46,226 / 4,000
2nd – 104,800 / 22,332 || 113,893 / 31,413 || 116,166 / 31,269
3rd – 155,319 / 52,550 || 201,563 / 84,900 || 226,263 / 100,900
4th – 222,918 / 93,950 || 312,877 / 148,729 || 322,785 / 134,123
5th – 449,800 / 237,925 || 452,992 / 272,681 || 569,000 / 414,369
The 1st quintile has the lowest difference between age groups.
The second quintile is about an increase of $9,000 between the first and second age groups. The third quintile is about $32,000. The fourth is about $55,000 and the fifth is lower than the fourth at $35,000.
Monthly income upper cutoff from table F, footnote 1 is
1st — $1,304
2nd — $2,426
3rd — $3,813
4th — $5,988
5th — a bazillion :)
The 75+ age group includes “Dead”, so I’m not sure I want the public policy to be “dies with still more money”. What the numbers show me is that people with incomes below the quartile cutoffs from footnote 1 are paying money so that people’s wealth can increase between ages 65 and 74.
What means testing, based on wealth and not on income, would do is preserve the wealth creating abilities of the lower class workers — those poor parents with poor children you care so much about — at the expense of the wealthy elderly who don’t have poor children to raise.
Unlike nobody.really, I don’t think the solution is “raise taxes”. I believe that “cut expenditures” is more effective, and given the wealth of the upper quintiles, I believe that it’s a safe move. The shortfall, as I recall, is on the order of 2% and with 3,897 out of 22,079 thousands of households in the upper two quintiles, eliminating Social Security payments to those two wealthy quintiles should, at a minimum, result in a reduction in benefits somewhere on the order of 15%. Of course, the number will likely be substantially greater due to the increased benefits that come from having a higher wage earning history. An additional change, raising the retirement age from 65 (or 67 for boomers like myself) to 70, would result in a reduction of some 3,900,000 of additional households of the 22,079,000 total. With life expectancies at age 65 being what they are, as you pointed out, and as the workforce declines, as others have pointed out, this change would result in a further significant decline in expenditures while boosting the workforce and increasing FICA receipts.
Neither the loss of benefits for the upper two quintiles, especially if it is performed on a sliding scale, nor the increasing in retirement age is particularly unreasonable. Social Security should not be a wealth transfer program, but a social safety net. Nor should it be an early vacation program so that people can live off the working class for the last few decades of their life.
I’ve read the same data you’ve read and I don’t see where you’re getting your numbers.
(Quintile — 65 to 69 || 70 to 74 || 75 and up)
1st — 32,000 / 2,900 || 43,230 / 2,885 || 46,226 / 4,000
2nd – 104,800 / 22,332 || 113,893 / 31,413 || 116,166 / 31,269
3rd – 155,319 / 52,550 || 201,563 / 84,900 || 226,263 / 100,900
4th – 222,918 / 93,950 || 312,877 / 148,729 || 322,785 / 134,123
5th – 449,800 / 237,925 || 452,992 / 272,681 || 569,000 / 414,369
You’ve quoted the numbers right there. Median net worth for the 1st quintile goes from 2885 to 4000 between the 70 to 74 and the 75 & up group. Look at the two right columns of your spreadsheet and you’ll see what I am referring to when I discuss the increase or decrease in median net worth.
The fact is, you can expect to live twelve more years after age 75 (if you’ve made it that far). At an average outlay of $20k/yr (a modest amount for living expenses by US standards), which quintiles will not have to sell or mortgage their homes over the course of that 12 year period?
Neither the loss of benefits for the upper two quintiles, especially if it is performed on a sliding scale, nor the increasing in retirement age is particularly unreasonable.
Are you aware that there has already been an increase in the retirement age wrt S.S. benefits?
I believe that “cut expenditures” is more effective, and given the wealth of the upper quintiles, I believe that it’s a safe move.
Given that reducing expenditures in social welfare programs has historically meant reducing benefits for those in the lower strata of income and wealth, I’m afraid that I cannot condone that strategy at this time. Those in the upper quintiles are the ones with political power precisely because they are in the upper quintiles (especially the top 2%).
Jake,
With the exception of the 2nd and 4th quintiles, people are continuing to accumulate wealth with the current level of benefits. What nobody.really and I are saying is that Social Security is NOT supposed to be a wealth transfer program. Sure, it would be nice if people could pass on their estate, but it is not the obligation of those of us who work to transfer our wealth to the children of others. Even the 1st quintile is continuing to accumulate wealth at the current levels, and that’s a group that I would leave perfectly well alone.
And yes, I am aware that there has already been an increase in retirement age. When I first started paying FICA, the age was 65. I’m on the tail of the boomer generation and for me, “retirement” is now 67. But even at age 67, I’ve got another 20 years of life expectancy and with improving health in old age, there’s no reason that a 67 year old woman can’t be expected to be able to work another 3 or 8 years, to either 70 or 75. Age 65 wasn’t picked out of thin air — it represented what used to truly be old age — male life expectancy in 1935 or there abouts isn’t what it is today, and that’s a large part of why we’re in this situation.
Re life expectancy, I’ve read an argument – I can’t find this right now – to the effect that lower class and working class men at least have a lower life expectancy than wealthier men. This means in effect that wealthier men are receiving more money from Social Security (even ignoring the effects of higher earnings and hence higher payments) simply because they’re around longer after retirement.
The reasons for the shorter life expectancy of lower class men are many. First, these men are more likely to smoke tobacco, and less likely to have adequate health care. Second, men who have done physical labor have simply worn their bodies out to a greater extent than some white collar worker who’s been sitting at a desk for 40 years. (The greater opportunity for exercise, which should be a good thing, seems not to have much impact on these survival numbers.)
This differential has a couple of implications. First, of course, it’s an additional injustice in the system that the wealthiest of the elderly receive disproportionately large payments. But. This factor also means that we would need to be very cautious about requiring someone who is 67 to “work another 3 or 8 years” as Furry suggests. A working class male may be already worn out at 67. Is he supposed to continue, say, working construction, for another 8 years?
As for passing money on to your kids, I confess that I’m a bit hard-nosed about that. First, it is no one’s right to receive inheritance: they didn’t work for that money, it’s coming to them, if at all, by accident of birth. It follows then that I believe that a federal tax upon estates is good policy (if correctly written). In addition it is good social policy, preventing the accumulation of vast estates, which are not good for anyone, most especially for the heirs, who tend to degenerate very quickly under these circumstances.
It is not true, as you often hear from the right, that a death tax “taxes money twice”, once when you earn it, and again when you die. A lot of the wealth upon which the death tax operates is appreciation in the value of investments since their purchase. This wealth has never been taxed, and absent some pretty fancy and probably unworkable complexities, it never will be, so the argument is specious.
Then, since your children have no God-given right to inherit your money, social policies which require its expenditure on your care (rather than allowing you to give it to them early and then throw yourselves on the taxpayers’ bounty) are good policies, and should be vigorously enforced. (Don’t tell my clients.)
Social Security is more problematic, largely for historical reasons. FDR sold the whole scheme to congress, and to the nation, on the completely fictive premise that you were just “paying in” to the system, and then when you retired you sort of got your “account” back. (The notices you receive now and again from them still refer to your “account.”)
Well, if it’s my “account,” don’t I have a right to it? Even so sharp a cookie as Furry proposed that she retain her future Social Security contributions, on the ground that she could invest them and make more money than she was likely to receive in retirement benefits, which plays off the same idea.
Of course this is complete fiction. There are no “accounts.” Furry’s “contributions” to the Social Security system between today and her retirement are actually tax payments being expended on the support of people who are now retired. Furry and I, if we live long at all, would receive vastly more from the system than we ever paid in if the system itself were not going bankrupt. Therein, in fact, is the problem.
But. Everyone sort of believes this fiction, even now, even when they know better, so cutting Social Security payments because you already have enough money is going to be a tough sell. It’s going to require rather more honesty than I at least have seen out of the tax system in my career. I’ve seen the honesty rating go down, not up.
If you want to talk about life expectancy and Social Security, you have to talk about race and gender. The number of black men who collect any substantive amount of Social Security retirement benefits isn’t zero, but it might as well be.
Here’s some figures that make the point clear. For people born in, say, 1970:
Black male life expectancy: 60 years
Black female life expectancy: 68 years
White male life expectancy: 67 years
White female life expectancy: 74 years
(I left off the decimals.)
Social Security retirement age: 67.
The numbers change year by year, but the general ratio and disparities remain.
Social Security is objectively a wealth transfer from blacks to whites, and from men to women. The latter may not be considered problematic; it is incomprehensible to me that the former is not.
How can anybody defend a system whose net effect is to tax black people all their working lives in order to provide a more comfortable retirement for whites?
Alice Munell, a professor of economics at Boston College (and a former Assistant Secretary of the Treasury of the United States), addressed this question in a radio interview (unfortunately, I can’t find an online link).
Also, retired Blacks are more dependent on Social Security than retired whites; about 60% of elder Blacks receiving SS would be below the poverty line if not for SS. (For comparison, the number is about 40% for whites.)
I’m sure that’s very comforting to the black guys who pay into the system their whole life and then die, Amp. Some other African Americans are doing “very well”. Hooray.
I’m sure that’s very comforting to the black guys who pay into the system their whole life and then die, Amp. Some other African Americans are doing “very well”. Hooray.
Well, you’re the one who claimed that African Americans, as a class, get hosed by S.S.
Social Security is objectively a wealth transfer from blacks to whites…
This is your response when your claim is disputed? Or would you like to rescind your claim?
High income earning white men who die young also get hosed. You can point to many segments of the population that lose out on the S.S. plan. But you’re claim that African Americans as a class lose their money to whites, as a class, seems to have been incorrect.
I know you can do better than that.
Less snarkily:
Of the approximately 48 million people getting Social Security payments, about 32 million are of the retirement variety – where African Americans are being screwed. Unless blacks have gamed the system so that pretty much every remaining slot in the system is going to blacks, the idea that African Americans as a whole are doing “very well” under the system is laughable. 3/4 of the benefits are demographically foreclosed to them.
(Summary numbers are from this site; they appear to have a social justice agenda but I assume they are honest reporters.)
Well, I’ve done a bit more research. My claim was too strong, and I retract it.
Black men who work throughout their lives get screwed. Other blacks do OK.
So that’s all right.
See? I knew you could do better.
Seriously, though, I don’t see how that chart supports your assertion. It doesn’t break it down – other than categorizing the type of beneficiary. Roughly 2/3 of S.S. beneficiaries are in the Retired Workers category, but what does that mean?
I think it would be helpful to find a chart that shows average or median or total pay-in vs. received broken down by gender, race, etc. I don’t have time to look right now (my quick search was unsuccessful), but I think that is what we are all looking for at this point in the conversation.
Whoops. x-posted that with you, Robert.
Robert, before we continue, could you please explain what your alternative propostion under which no one gets screwed, ever, is?
Well, maybe women ought to do well, for a change, after having taken pretty much the short end for their whole working lives.
(Sorry. Hit publish too soon. I personally have not taken the short end of anything. But I am aware that my experience isn’t necessarily representative, particularly of women older than I am.)
Private accounts for individual workers, and welfare programs to cover the people for whom private accounts don’t work. That doesn’t guarantee that nobody will ever be screwed, of course; nothing human will achieve that result. But it makes things honest, and allows us to really see and identify costs, instead of the current system where we pretend welfare is insurance.
Great idea, Robert, the question is, how do we get from here to there?
Right now we have myriads of elderly people to whom promises have been made, and who have made their plans relying on those promises. Those promises are being kept by taxing people who are now working.
If we expect to change systems, and actually set up accounts for current workers, we have a couple of problems. First, if we continue to keep our promises to our parents and grandparents, and at the same time think we’re going to build up accounts for current workers, we’re going to have to tax those workers twice over – once to support the elderly, once to build up accounts for the workers themselves. (If we think we’re going to deprive the older generation of the Social Security payments they think they’re entitled to, we can think again. This is a very powerful and very active voting block.)
Assuming current workers would be willing to stand for double taxation (!) could the federal government continue to borrow at favorable rates from these new private accounts (presumably whether the account owners like it or not) or will that federal government have to figure out some other way to get its money? And if the latter, wherever would that be I wonder?
Remember, the elderly paid Social Security taxes all their working lives, and got nothing for it. No “accounts”, no nothing. All the money went to support their parents and grandparents. All they got was a promise that when it was their turn, they would be supported too.
Try breaking that promise and watch all hell break loose.
It would be morally unconscionable to deny current retirees the benefits they were promised, short some fiscal/national crisis of epic proportion. Those benefits would have to be paid out of general revenue until the beneficiaries died.
The bigger problem is what to do with people who’ve paid in but haven’t yet retired (i.e., most of us). The easiest thing to do would be a buyback; you’ve paid in $100,000, so here’s $100,000 in your private account. Again, that’d come from the general treasury. Done over a decade or two, it shouldn’t be too bad, particularly since the private accounts could be ghost-funded for many people, with the actual money being delivered later. I’m not retiring anytime soon.
Obviously there would be a lot of accounting fixes to be made, as well, and there would be a painful readjustment as the Congress got used to the idea that it no longer had this giant pool of free money to borrow.
But it would be worth it, to have a genuinely sustainable and genuinely market-based retirement system in place that people could count on, without creating political pressure for crazy immigration policies and endless fiduciary juggling.
Robert,
How does your plan (especially the buy back) work for those in the bottom two quintiles? I can’t see how they’d ever have enough to pay for their retirement years. Part of the aim of S.S. is wealth redistribution – the wealthiest (although it has turned out to be the middle class, mostly) subsidizing the poor.
Personally, I’m somewhat in agreement w/ FCH. Keep S.S., eliminate the cap on FICA contributions and implement means testing.
Jake, those folks need welfare programs. I have no problem at all with a generous welfare program for the poor elderly. The objection to providing that welfare through Social Security, as we do now, is that a system that is intended to do everything (handle disability, pay for people’s retirements, provide income security to middle-class retirees, pay benefits to survivors, provide welfare for poor elders) ends up doing nothing well. It’s become almost impossible to have a policy discussion about SS, because there are so many unrelated programs wedged into one.
Does nobody else have food banks?
We do (it’s my default charity).
Like food stamps, but it gives food. Real food.
One can donate money (the bank will buy food) or one can donate food. AFAIK it doesn’t supply a whole lot of meat, though I suspect they operate above a bare susistence level. That’s OK with me thuogh because really, nobody goes there who doesn’t need to eat. Being hungry sucks.
FCH: Personally, though I detest waste, I think it’s ludicrous to suggest that starvation and hunger must be linked.
Can’t recall the cites myself (rachel? help! You have all these, right?) but some amazingly large percentage of school kids who get free food don’t get any, or much more, at home. Perhaps it’s waste by their parents (see food bank ‘solution’ above) but my kids are hungry, tired, and crabby if they don’t eat.
No child in this rich country should have their stomach hurt from lack of food on a regular basis, whether or not they manage to stay at a physically acceptable weiht level. They don’t need to starve first. I hope.
Sailorman, food banks are great. We support our local one. However, food banks can only help people who are still functional. A pretty distressingly high proportion of folks living in poverty are non-functional.
Age 65 wasn’t picked out of thin air — it represented what used to truly be old age….
The first state pension used age 70 as the retirement age – as proposed by Otto von Bismarck in 1881! In 1916 Germany lowered the retirement age to 65. Still, what percentage of the population ever got to collect?
For what it’s worth, the Social Security Administration denies that the German model influenced the selection of 65 as the retirement age for purposes of Social Security in 1935.
God bless the Internet – somebody already did the work. Scroll to page 23. In 1891, 27% of those who reached the age of 15 also lived to see 70.
More than I would have thought.
Yeh, that kind of thing is surprising, Robert, if you don’t know how these mortality numbers work.
You hear people say, “The average life span in the middle ages was [35] or [40] or [whatever],” but what they don’t tell you is that there was an enormous infant and child mortality rate that threw the numbers off. If half the babies born die before their first birthday (not unheard of in medieval Europe) and you just ran averages, it looked like no one ever got to be 50, let alone 70, but of course that was never true.
The same factors were operating to a lesser degree in 1890. IF you survived your infancy and young childhood, you could look forward to a reasonable chance of achieving what even we consider to be old age. Let alone the 1930’s. So when people tell you that the average life expectancy in 1938 was 65 (or some such statement), they’re playing numbers at you. Yes, if you just take the straight averages (including kids), but more honest numbers show that a substantial percentage of the population lived considerably beyond 65 after they survived childhood.
Let’s poke a little further into this question. Robert’s reference tells us:
OK, now wait just a minute. Where did this number come from?
First of all, 60 years from 1970 is 2030, and we aren’t nearly there yet, so how on earth would we know that that is the average life expectancy for anyone born in 1970? Maybe they’ll all live until 2050; maybe they’ll all drop dead in 2025. I don’t see how anyone can say something like this without it being 95% guesswork.
Second, is this number, even assuming that it has some sort of validity (how could it possibly??), taking infant mortality into its average (in which case, we need to ask even more questions)? Is infant mortality really relevant when we’re discussing old age pensions?
Are we supposed to base policy decisions on this kind of smoke-and-mirror show?
The source listed was the Social Security Administration, Susan. They’ve been estimating lifespans for a good long while now and I believe the demographers and actuaries have gotten pretty good at it.
I remain skeptical. It would be interesting to compare some of these predictions – it would have to be fairly old ones – with actual experience. “Pretty good at it” remains to be proven, at least to me. No matter how very clever the Social Security folks are (and my dealings with them suggest that in fact they’re not at the very top of the intelligence tree) it still isn’t 2030, or anywhere near it, and any prediction of that sort has to involve an awful lot of guesswork.
I’m strongly suspecting that over a projected 60 or 70 year lifespan, enough medical breakthroughs would take place to make hash of any such predictions.
Also, the question about infant mortality remains unanswered. It may well be true that a certain population at birth has a life expectancy of X, but I’d be more interested in learning the life expectancy of the same group among those who are alive at age 20, say.
Let’s consider a few things.
It would be interesting to know why black males, for example, are projected to die at a greater rate than white males. Let us suppose that the causes are, oh, heart disease, lung cancer and sickle-cell anemia.
Let us further assume that sometime between now and 2030, we discover cures for all these conditions. (Not beyond the realm of possibility at all.) Let us further assume that some condition, perhaps something infectious, arises to which white males are especially susceptible. It spreads like wildfire, and lo and behold, by 2030 the numbers are reversed.
My point is that no matter how clever clever you may be, predicting the future is fraught with difficulties, especially in this area right now, when medical advances are so rapid and so unexpected, and when new disease are emerging so rapidly.
To say, “Well, IF everything remains just as it is now….” is useless, because the one thing of which we CAN be sure is that things will not remain as they are right now.