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Welfare state should not be a middle-class subsidy

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Well-known member
Apr 12, 2008
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real world
Pundits who describe America as a fundamentally conservative country are wrong,” New York Times columnist Paul Krugman wrote last week.

“Yes, voters sent some severe conservatives to Washington. But those voters would be both shocked and angry if such politicians actually imposed their small-government agenda,” Krugman said.

Krugman wrote these words in response to an earlier Times article on the negative attitudes many Americans have toward the federal government’s ever expanding safety net.

But one wonders how closely Krugman really read it. “Many people say they are angry because the government is wasting money and giving money to peoplewho do not deserve it,” the Times reported. “But more than that, they say they want to reduce the role of government in their own lives.”

Sounds like a pretty conservative sentiment to me.

Krugman does acknowledge that the federal government has grown recently, but he is quick to absolve President Obama of any blame.

“Mr. Obama has not radically expanded the safety net. Rather, the dire state of the economy has reduced incomes and made more people eligible for benefits, especially unemployment benefits. Basically, the safety net is the same, but more people are falling into it,” Krugman said.

This is just plain false. One of Obama’s first acts as president was to expand eligibility for Medicaid’s State Children Health Insurance Program.

Medicaid enrollment has grown by more than 3 million since then, helping to increase Medicaid spending by more than $23 billion in just three years (see Table 11.2).

And Obama expanded Medicaid eligibility even further, all the way up to 138 percent of poverty, through Obamacare. As a result, the Centers for Medicare & Medicaid predicts an estimated 25 million more Americans will be enrolled in the program by 2020.

Obama has also greatly expanded unemployment compensation eligibility. Before he was president, most states only offered 26 weeks of benefits. Now the many unemployed can get checks for 99 weeks —that is almost two years’ worth of benefits.

Food stamp allowances were also liberally expanded under Obama’s stimulus. According to the Heritage Foundation’s 2012 Index of Dependence on Government, between 2008 and 2011, food stamp spending nearly doubled from $39.3 billion to $75.3 billion.

On Obama’s watch, America’s welfare state is undergoing a profound transformation. According to the Congressional Budget Office, while the bottom fifth of households received 54 percent of all government transfer payments in 1979, in 2007, they collected only 36 percent.

“The government safety net was created to keep Americans from abject poverty,” the Times reported. “But the poorest households no longer receive a majority of government benefits.”

Our country not only can’t afford to put the middle class on welfare, Heritage estimates that the federal government will spend $10 trillion on welfare over the next 10 years. But most Americans don’t want to become dependent on the federal government, either.

“I don’t demand that the federal government does this for me,” Ki Gulbranson told the Times about his kids’ free school lunches. “I don’t feel like I need the government.”

And there is no reason Gulbranson should. Left to their own devices, Americans can provide for each other just fine. But government does not leave them alone. Take Social Security, the cornerstone of middle-class welfare state dependency.

A middle-income—$49,445 a year—American, who began working in 1968 and retired last year will receive $1,358 a month from Social Security. But if that same worker had instead invested the money he paid into Social Security in an index fund, according to a Cato study, he could be receiving $2,621.

And what about a low-income ($24,723) American? Through Social Security, he will get $891 a month. Through the market: $1,287.

If our country wants to avoid a Greek-like debtpocalypse, we are going to have to return the safety net to its original purpose: helping the very poor get back on their feet. In order to do that,we have to get the middle class off the welfare state.


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