Hot Issue: Welfarization & the Capsizing of Democracy
The Founding Fathers intended that America be composed of self-reliant individuals who would not hesitate to pull the reins in on their rulers. However, in the past 75 years, the soaring number of government dependents has made it far more difficult to curb politicians’ power. Federal policy is dividing society between “those who work for a living and those who vote for a living,” as H.L. Mencken quipped during the New Deal.
In recent decades, politicians have launched one recruiting campaign after another to persuade Americans to accept federal handouts. The Heritage Foundation created an Index of Dependency to measure the rising number of Americans reliant on government. The index gauges “the pace at which federal government services and programs have been growing in areas in which private or community-based services and programs exist or have existed to address the same or nearly the same needs.” The index is based on housing aid, healthcare and welfare assistance, retirement income, and subsidies for college and other post-secondary education.
The Heritage Index rated the level of dependency in the United States at 22 in 1964, the year that Lyndon Johnson launched his Great Society. By 1980, the year before the Reagan Revolution commenced, the index had risen to 100. By 2008, the index had soared to 240, signaling a ten-fold increase of dependency on the federal government over the prior 40+ years.
The food stamp program was greatly expanded beginning in the late 1960s, after politicians realized that promising to feed everybody made them look compassionate. The number of food stamp recipients has soared to almost 40 million. Recent studies have shown little or no nutritional benefit from food stamps. A 2009 Ohio State University study found that “people’s BMI [Body Mass Index] increased faster when they were on food stamps than when they were not, and increased more the longer they were in the program.” University of Maryland professor Douglas Besharov observed: “In a time of mass obesity, encouraging the poor to consume more food makes no sense at all.” The Obama administration pushed through Congress changes last year that make it far easier for able-bodied young people to collect food stamps. A recent Slate article reported that “hipsters” were now using food stamps for Perrier water, organic salmon, and expensive soy meat alternatives and gourmet ice cream from Whole Foods.
Other food aid programs also have perverse results. The Women Infants and Children program provides coupons that mothers who are pregnant or who have young children can use for free infant formula and other specific food items. But this has significantly discouraged women from breastfeeding – one of the healthiest things they could do for their babies. Low-income women on WIC are far less likely to breastfeed than are women of the same income and similar background who are not on the WIC dole. Households with almost double the poverty level income can qualify for WIC handouts, and 10 million women and children are collecting WIC benefits.
Housing subsidies have exploded in recent years. More than ten million people live in either public housing or in apartments or homes designated for Section 8 rental subsidies. Public housing often brings out the worst in residents; the crime rate in public housing projects is up to ten times higher than elsewhere in America, according to HUD studies. Section 8, by dispersing former public housing residents and welfare recipients in suburbs, has created a new crime wave across America, according to a 2008 article in the Atlantic magazine.
On top of that, the federal government has underwritten the vast majority of subprime mortgages. The Clinton administration and the George W. Bush administration championed policies that permitted people to “buy” houses – even though they were uncreditworthy and could afford little or no downpayment. This foolish policy is resulting in wave after wave of defaults and a plague of abandoned houses that create magnets for crime across the nation. Politicians placed incompetent hacks at the top of Fannie Mae and Freddie Mac, and those agencies squandered a king’s ransom to create the appearance that almost everyone could buy a house. Fannie Mae alone had $72 billion in losses last year.
Farmers have been America’s perpetual dependents since the 1930s. Even though farmers have far higher net worth than do other Americans, Congress has perpetually entitled plowmen to first dibs on other people’s paychecks. Farm subsidies now cost taxpayers more than $25 billion a year. While Republicans like to talk about “freedom to farm” and Democrats like to condemn handouts for large corporate farmers, neither party has shown any willingness to abolish handouts, which have always been a travesty, both of fairness and common sense.
Businessmen have been the fastest growing welfare class in recent years. The profusion of bailouts began in 2008 has already cost taxpayers hundreds of billions of dollars. Wall Street is also the most arrogant welfare recipient in the nation – with some firms offering endless excuses why they are blameless for the catastrophes they spawned. Some of the firms and banks that got bailed out are now paying multi-million dollar bonuses to the same executives who ran their ships aground a few years ago. It would have been both politically and economically better for America’s future if many of the bailed-out firms instead reaped the bankruptcy they richly deserved.
More than 23 million households collect almost $50 billion in handouts from the misnamed “Earned Income Tax Credit.” This program was created in the 1970s to counteract the anti-work incentives of payroll taxes on low income Americans. But politicians have continually expanded it and turned it into an all-purpose handout. The Earned Income Tax Credit is among the most fraud-ridden handouts in modern American history.
At the same time that Congress has put far more people on the dole, it has also exempted vast numbers of people from any federal income tax obligation. In 2008, more than 51 million tax filers had zero tax obligation, according to the Tax Foundation. As of 2009, “roughly 47% of households, or 71 million, will not owe any federal income tax, “ according to the Tax Policy Center. The sharp increase in the numbers who owe no taxes are largely the result of President Obama’s stimulus and other expansionist programs.
Thomas Jefferson warned, “Dependence begets subservience and venality, suffocates the germ of virtue, and prepares fit tools for the designs of ambition.” Anything that increases dependency on government undermines liberty. How can a citizen help steer the ship of State at the same time that he has his hand out for another government benefit? Once a person becomes a government dependent, his moral standing to resist the expansion of government power is fatally compromised.
The sheer number of handout recipients transforms the purpose of government from maintaining order to confiscating as much as possible from vulnerable taxpayers. Elections nowadays, instead of a vote on what government should do, are largely referendums on how much it should take. The more government dependents, the more likely that democracy will become a conspiracy against self-reliance.
Americans need to demand an end to government handouts for those who could help themselves.