[Rhodes22-list] What do you do with monsters?

eric.charles.newburger at census.gov eric.charles.newburger at census.gov
Fri Sep 10 19:30:05 EDT 2004


So many of you have given thoughtful replies that I felt I should offer my
own in support.  Besides, work's over for the day and now I have a few
minutes....

"Remember, this so called deficit
could be eliminated in a couple years if we reduced
walfare programs."

      This is just wrong.  U.S. Dept. of Health and Human Services, in its
annual report to congress, "Indicators of Welfare Dependance, 2003"
reported that the Federal Government and 50 states, combined, spent only
about $14.2 billion in 2000 on AFDC and TANF, the programs commonly
referred to as welfare.  Compare that with Bush's one year deficit of $450
billion or so.
      Most of the social spending we do in this country is on social
security payments, which are not entitlements at all, but rather, a
government run retirement and, to a lessor extent, life insurance program.
They go to everyone, and so they cost a lot.  We pay for it, too, with our
SSA withholdings.
      Welfare only goes to poor people, and there are relatively few of
them in our society (though there are more now than before Bush took
office--see the Census Bureau's last three Income and Poverty Reports).
HHS also reports that only about 3% of Americans are 'dependent' upon
welfare (that is, get half or more of their income from these programs).
So, with so few mouths to feed, as it were, the bill is pretty small
compared to other things.
      By the way, those Clinton era figures for welfare are only about a
third of what the Reagan era welfare bills were in constant dollars.
Welfare reform in '96 really reduced the figures.  However, even at the $28
to $29 billion annual level that typified the Reagan era, welfare would not
then, nor will it now, ever begin to pay off Bush's tax cuts.


"So called republican pork allow companies to produce
goods or services with a higher profit margin.  The
higher the profit margin, the more workers the
companies will need to hire to produce more of the
goods & services to maintain its market share."
      This reasoning stems from what some economists call 'Supply Side'
economics, or 'trickle down' economics, and what George Bush Sr. referred
to as 'Voodoo economics' when he ran against Reagan.  It's the notion that
giving money to poor people (welfare) is bad, but giving money to business
owners is good, because it stimulates jobs.
      The thing is, the economic stimulus from tax cuts for the rich, and
sweetheart deals for businesses, only generate about 1/10th the growth that
the supply side economists claim for them.  We've had a good 20 years to
look at this in action.  It doesn't work the way proponents say.  You get a
little bump, but most of that money goes into the pockets of the rich.
That is, the rich accumulate wealth, and invest only a portion of it.  You
see poor people getting poorer and rich people getting richer, which is of
course exactly what the numbers show for the past three years (see those
Census reports on poverty and income--they are quite clear).
      More fundamentally, most business 'pork' subverts the competitive
process so vital to our system--the contract goes to the business with the
best connections, rather than the best product or service.  Quality erodes
while prices rise, good companies fail, good people go down with them. It's
ugly, and it's the reason that societies in which corruption becomes the
norm don't do so well in the long run.

Eric Newburger




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