By James Kwak
In general, I think Binyamin Appelbaum and Robert Gebeloff’s article on how the same people oppose government handouts and take government handouts is very good. But I think their framing buys into a piece of conventional wisdom that just isn’t true.
Here it is, without any shortening (but emphasis is mine):
“The problem by now is familiar to most. Politicians have expanded the safety net without a commensurate increase in revenues, a primary reason for the government’s annual deficits and mushrooming debt. In 2000, federal and state governments spent about 37 cents on the safety net from every dollar they collected in revenue, according to a New York Times analysis. A decade later, after one Medicare expansion, two recessions and three rounds of tax cuts, spending on the safety net consumed nearly 66 cents of every dollar of revenue.
“The recent recession increased dependence on government, and stronger economic growth would reduce demand for programs like unemployment benefits. But the long-term trend is clear. Over the next 25 years, as the population ages and medical costs climb, the budget office projects that benefits programs will grow faster than any other part of government, driving the federal debt to dangerous heights.”
The idea that politicians have expanded the safety net is just not true, with the exception of the Medicare prescription drug benefit and an expansion in Medicaid that hasn’t taken effect yet. Spending on social programs has increased for a few obvious reasons: the baby boomers have started taking Social Security benefits, increasing that program’s expenditures; the recession boosted unemployment benefits, disability claims, and eligibility for poverty programs; and most importantly, health care has gotten much more expensive.
But those programs themselves haven’t gotten more generous (except, again, for Medicare Part C), nor have they expanded to cover more people. Instead, as Mike Konczal shows in detail, the federal government took an axe to the safety net back in the 1990s (remember welfare reform?). Remaining programs such as TANF have declined in real value. What has happened is not that the safety net has gotten more robust, but that the same real benefits have gotten more expensive because of demographic shifts and excess health care cost growth.
In short, the middle class is getting a larger proportion of “safety net” payments not because that net is expanding from the poor to the middle class, but for two other reasons: one is that we’ve cut the programs for the poor; the other is that health care is getting more expensive.
As Appelbaum and Gebeloff say, safety net programs (if you count Social Security and Medicare as part of the safety net, as they do) will cost more and more over the next twenty-five years. But again, that’s not because those programs are becoming more generous. It’s because more people will be using them and health care will become more expensive.
The earned income tax credit was expanded in the 2001 tax cut. But I wouldn’t call that part of the “safety net.” The point of the EITC is to encourage people to work. As your income moves from zero to a low level—say, up to $30,000 for a family—you lose important benefits, most notably Medicaid; you also have to pay a flat 15.3 percent of your income in payroll taxes (counting both the employee and employer shares). Together, this means that your marginal tax rate could be extremely high (because of those lost benefits). The EITC is designed to reduce that marginal tax rate to create the incentive to work instead of relying on benefit programs. It’s not part of the safety net; it’s a provision of the tax code designed to reduce the distorting influence of the safety net.
The Baseline Scenario 
I can easily think of one program that has gotten generous. Unemployment has been extended well beyond the 2007 level.
Medicare Part D (not C) came into effect in 2006.
So if you point a gun at my head and take all my money, and then you offer to give 10% of it back to me, and then I complain…
…am I a hypocrite unless I refuse to accept the 10% you are trying to return?
It’s hard to take you seriously when you say, “As Appelbaum and Gebeloff say, safety net programs (if you count Social Security and Medicare as part of the safety net, as they do) will cost more and more over the next twenty-five years. But again, that’s not because those programs are becoming more generous. It’s because more people will be using them and health care will become more expensive.”
Look, having increased demand on a government program, even if the benefits it was designed to offer have not fundamentally changed, is increasing the safety net. If costs associated with a safety increase, for any reason, the safety net is therefore increased even if the scope of the policy, as expressed in natural language, have not changed. It’s really frustrating that you simply dismiss that point of view without expressing why we shouldn’t feel that way, and then argue basically from a strawman.
If I make a policy to the kids in my neighborhood that I will personally fund their college education when they are college aged, and then when maybe 50% of them are college aged and are receiving my promised assistance a giant hurricane comes through and destroys all of my assets, that directly affects whether the promised assistance is a large, unreasonable amount or a small, reasonable amount.
If creating artificial demand for medical care raises prices, as it will certainly do, then the policy which promises to pay despite raising prices is implicitly widening the safety net as a function of those prices, as measured by per-dollar expenditure.
I think the thing your not getting is this: some people do not measure the size of a social program by the number of people it helps but by its projected costs and whether those costs, considered as absolute costs, are reasonable to bear in the form of promised assistance. Some other people measure the size of a safety program in terms of the options in affords to the people who would be using it. You seem to always assume that everyone should use the latter measure without offering a good reason why a person shouldn’t think the former measure is more relevant and important.
lol. Sorry Nemo and friends. Deal with reality. Since 2000 the economy hasn’t grown enough to consume enough. That boosts nominal government spending on “welfare”. Deal with that. Real spending has actually declined and is declining more right now.
SS/Medicare should be left out to they can no longer pay. Because it is payed.
Bad posts create bad posts. Even normalization of programs such as SNAP and unemployment benefits would a solid nominal drop.
There’s also S-CHIP, signed into law in 1997 and expanded in 2009, but that is pretty minute to your overall point (which I agree with).
Nemo- You’re using the wrong percentage. Your question should have been:
“So if you point a gun at my head and take all my money, and then you offer to give 110% of it back to me, and then I complain…
…am I a hypocrite unless I refuse to accept the 110% you are trying to return?”
And, yes, you would be a hypocrite.
TAX WALL STREET to pay for any increases in the cost of medical – Medicare and/or Social Security. Sales tax on transactions, just the same as buying at Walgreens for Valentine’s Day.
A change of attitude is required…..pay to play, it is high time to share the wealth and spread the pain of taxation.
Greed is not good, it is destructive, and un-Christian.
@ Jimbo: No. When consumption drops, aid drops.
Hey, Mikey… where did you get the idea that the government will give you back 110% of what they take from you? that kind of thinking is leftist, totally dillusional, you have been watching too much MSNBC. With you as part of our crowds, we will end up like Greece. Too many takers, not enough producers. Chairman Obama is giving you a very refreshing brain wash, and you’re just taking it in…. Wake up!
Overall spending for safety net programs are up now because they are working like they are supposed to. The Safety Net total dollars spent is up because of the recession. Not because of vast increases in benefits to individuals. More individuals need to use the safety net now than.
The payments paid out are counter cyclical to the business cycle. This also is something to consider when folks insist on a “balanced” budget. What they should be insisting instead is for the government to run surpluses during good economic times in order to pay for the deficits a down turn brings.
Huzzah! Huzzah!
At long last the frighteningly high marginal tax rate suffered by those at the bottom is being mentioned. If the top of the income spectrum paid anything similar to the rate the poor face, we’d pay off the deficit in a flash!
(As a nation, were rising to our be our best, aside from foreign policy, when the upper incomes faced a marginal tax rate above 90%.)
I’m not certain of the details, and my ears might have been trickin me. But I thought I heard kudlow say if the bush tax cuts expire the death tax will be 45% and the Warren Buffett rule would raise that another 30% to a whopping 75% for those at the very top. We could recover alot of money to reduce the debt and force others to invest differently.
First Social Security and Medicare are insurance programs that we the people pay into for our entire working lives. They are not a safety net. Second, Reagan raised the amount paid into both programs to offset the Baby Boomers retiring, so there was an increase in revenue. Third, it is not these programs causing the deficit, it is unfunded wars, corporate welfare without taxation, and tax cuts for the wealthiest among us.
An important component that is not being discussed is the impending explosion as baby boomers bankrupt themselves before requiring Medicaid-funded nursing-home care.
Honestly, the psychosis is so evident in Delusional City, you have to stop listening to what sadists think the *working poor * deserve – it’s neither science nor economic theory…
@ Ted: I don’t think everyone agrees with this. Some folks want us to estimate a budget for the safety net that floats according to growth or recession. If more people need aid now than they did 5 years ago, that means we failed to articulate the right plan 5 years ago. The plan 5 years ago should have been clearer: “In 5 years’ time, we will have funding for X amount of safety net aid and no more, regardless of the actual circumstances of the world in 5 years’ time. We won’t spend more than X at that time.” Instead we tend to look at it like, “well, people felt that they were promised Y amount of resources for help, and now Y amount of resources costs way more than X dollars, so we’ll just have to spend the difference to provide Y resources anyway.” I dislike that latter option. I think people are never promised Y amount of resources; they are only ever promised Y conditioned on the future budget.
Note that Joseph from the Old Testament was a Keynesian. As the Bible teaches, the most basic function of a competent government is to provide social insurance, e.g. stocking up on grain to feed its people during a famine.
Social Security is still $2.5 trillion in surplus. How can anyone honestly blame Social Security for current financial woes?
Oh, thats right, they can’t, but that still doesn’t stop them.
The expansion of Medicaid isn’t in fact and expansion, but shifting the cost of uninsured poor adults back to the federal government from the county and state governments that have been forced to eat the cost of medically-indigent adults. The expansion of Medicaid may actually decrease costs, as their care will be provided in doctors’ offices, rather than county hospital emergency rooms.
@bobthebayesian: “Look, having increased demand on a government program, even if the benefits it was designed to offer have not fundamentally changed, is increasing the safety net. If costs associated with a safety increase, for any reason, the safety net is therefore increased even if the scope of the policy, as expressed in natural language, have not changed. It’s really frustrating that you simply dismiss that point of view without expressing why we shouldn’t feel that way, and then argue basically from a strawman.”
Sorry, Bob, but that doesn’t wash. The entire thrust of the argument that’s being made against entitlements is that *government* is being expanded. That’s clearly not the case: the government programs cover no more than they did before the 2008 crash. The increase in spending is due to factors that lie completely outside policy, but is being used as evidence that there has been a change in policy that should be reversed. Out here in flyover country, we call that a “lie,” son.
@bobthebayesian “If more people need aid now than they did 5 years ago, that means we failed to articulate the right plan 5 years ago.”
If you’d like to argue that the Bush administration should have predicted the crash and failed to do so, be my guest. I think there are some liberal economists who would be happy to provide data to support that argument.
On the 110% back question, that is a more accurate reading than the 10% back. The simple fact is that most people will get way more back from Medicare and Social Security than they ever pay into the system for it. These are supposed to represent a bond between generations, where each generation looks out for the last. There’s also our money that goes to defense, the national highway system, air traffic controllers, etc. The whole idea that the government takes our money and we get nothing in return is just a distorted view of reality. Read the New York Time article, too, about how the biggest critics of the government and the safety net are only too happy to take advantage of that money.
As a non-american, I find many of these discussions excessively theoretical; They often appear to lose all contact with reality.
Yes, most people do get more back from Medicare and Social Security than they put into it. This is because many people die and get nothing, or very little. It is also because these programs are in part funded systems and earn money from those funds. The funds become more than the sum of the contributions.
No rocket science here.
Universal systems can easily be more efficient because the cost of marketing any scheme is significant. Ask your insurance company. Universalism however require compulsion. This upsets those who value “freedom” over common sense.
One cannot be “free” from the costs of old age and illness unless one can arrange to be free from these maladies themselves.
The second big problem with voluntary schemes is that freeloaders exist. Often the decision to be a freeloader is preceded by a refusal to face the facts of life, this is not difficult for a large number of young people. Compulsion is required for taxes so why not for other insurable live events?
Finally, the fashionable demonisation of Government and all its works, is a bizarre manifestation of the inability of human beings to form a balanced view on complex systems.
The obvious remedy for this concern is for Government to mandate the programs but not run them. I could get enthusiastic for such a solution.
James – I would think that, at a minimum, the safety net gets expanded when congress does nothing – for instance, in 2000, life expectancy was 76.9 years in the US – in 2011, it was 78.5 years. Someone who retires at 65 was earning SS benfits for 11.9 years (12 years ago) and now for 13.5 years (13% increase) – in their broad definition, that is an expansion of the “safety net”, i.e., the public sector is on the hook for more payments to individuals. I don’t think that’s a political statement, by the way.
Note: this is a crude analysis, one should probably look at life expectancy for a 65 year old in 2000, and in 2011.
@Scott: I’m not arguing against your explanation for why the current cost has increased relative to the overall budget. I’m arguing that at any time slice, all we care about is that relative percentage and not the “actual amount of aid” being served, so to speak. I’m saying that policies have to have the efficacy to be adaptive to constantly changing budgets. If we made a policy that didn’t have enough efficacy, then that is the reason to change it — not just the raw amount of spending due to that policy.
Here’s what I’m trying to say: some policy about safety nets was adopted at some time before the crash. That policy didn’t attempt to say anything like, “well, in the event of a severe enough crash, though, we may not be able to provide this for you because we won’t just roll it into the debt.” But it should have (my opinion). Thus, even though externalities are now responsible for the increased relative costs — not policy changes or ‘enlarged entitlements’ or anything like that, the policy itself is bad for not being adaptive to lower expenditures in the face of those externalities.
My insurance company is supposed to pay me for a valid claim, say on my car. But if some car-hating aliens visit the planet and there’s a correlated destruction of cars concealed as a bunch of independent, policy-covered events, then the terms of my policy with the insurance company go out the window. I’m no longer promised reimbursement on a claim because the insurance company’s budgetary situation changed completely and they will file for bankruptcy. They don’t (necessarily) have any further obligation to pay out a claim to me. That’s because, whether stated or not, the policy with the insurance company is conditional on there not being hugely unlikely correlated failures. I’m suggesting that whether we like it or not, safety net type aid is conditional in exactly the same way.
The only reasonable counter-argument in my eyes is to say that the relative cost increase is utterly trivial in light of how much burden we can bear in terms of debt-to-GDP, and both Simon and James have tried to make this argument. But I found their justifications seriously unconvincing. Others’ might be convinced, but my main point is that it is that issue that’s at stake. No derivative issue matters, such as wanting to paint people out as uncaring or bad because they want to reign in the budget and are unconvinced that debt-to-GDP permits us to finance safety nets with debt right now. I’m generally opposed when intelligent folks (like Simon and James) take that route to make their arguments. It’s like they won’t just see people who disagree as being incorrect, they have to also argue they are malicious to make their views become a tribal status symbol. Then dissent can’t be entertained by rational thinkers… only bad bad, evil, greedy people. And that’s just not true or productive.
@bobthebayesian: I think we’re arguing past each other. I have no problem with your concern over whether debt-funded entitlements are sustainable or not. I would likely disagree with you about whether they are or not, but I don’t mind that we disagree, especially as our disagreement is supported on your end by something that bears an observable resemblance to logical argument. (And after a few days trying to argue legal theory with rabid anti-SSM commenters elsewhere, that’s a breath of fresh air, believe me!)
*My* concern is this: while there has been a substantial increase in the amount of money paid out through these programs, there has *not* been a change in the programs themselves. But the political spin being put out by Republican politicians and their proxies *does not distinguish*, and in fact muddies the waters by stating that we need to “rein in big government,” which suggests an expansion in government *programs*, not just payouts. As far as I can tell, that’s also the argument of the original post.
Bravo for Scott’s last post about ending up back where you started.
There is one other point that gets lost in the debate about the rising social net payouts that I think @bobthe bayesian is missing. Paying out for social security and medicare has a beneficial effect that things like Afghanistan war spending, etc, does not, in that it basically puts more money into the system and means that old people will have more money to spend. Obviously (too most) the expanded deficits are also due to decreased tax revenue coming in. Unemployment, underwater homeowners, underemployment, increased health care costs, etc, etc, all mean people have less money to spend, which further constricts the economy and inflames the deficit The original idea of tax cuts is to stimulate the economy, but some would argue the 1% can only spend so much!
If Social Security or Medicare are cut, the difference is going to have to come out of the pockets of the elderly, a growing segment of the population, which will mean they have less to spend. One implication of this is that an idea like raising the Medicare age from 65 to 67 can be viewed basically as essentially a huge tax on people aged 65 to 66. We just switched my wife who turned 65 from a Cobra plan to a Medicare Advantage plan, and her monthly cost for health care went down to something like a quarter of what it is was before!
All government spending is not created equal. Some of it is more stimulatiive than other types of spending. And that is forgetting the human and idealistic aspects of certain spending that appeals to some of us bleeding heart types.
Isn’t the fact that 67% of the population has a 25% unemployment rate (especailly in the 20-30 year old cohort) and was also sucked dry so that the upper 1% could increase their wealth by over 200%? And that’s not *evil*?
USA Demographics:
Median age
36.8 years (male: 35.5 years, female: 38.1 years, 2010 est.)
[edit] Age structure
Further information:
0-14 years: 20.2% (male 31,639,127/female 30,305,704)
15–64 years: 67% (male 102,665,043/female 103,129,321)
65 years and over: 12.8% (male 16,901,232/female 22,571,696) (2010 est.)
Bobthebayesian,
You are just Herbert Hoover wearing Ron Paul’s suit. The whole point of a safety net is micro, not macro. it is to keep people out of poverty while they are in distress, so that they can resume a middle class lifestyle (and middle class contributions to the tax base). If you cut it when times are hard, then you defeat its purpose.
The secondary effect of the safety net is macro, and your logic would defeat that benefit as well. You see, when times are hard, uemployment insurance and other programs, such as EITC, Medicaid, etc. act as countercyclical stabilizers. You cut them in down times, then you are exacerbating the recession/depression.
Finally, on your point about planning: so what? If the prior president didn’t plan on a recession, we just penalize every poor person for his/her lack of planning? For the millionth time, governments are not private businesses. They can defiict spend, and there are good times to do so. This is one of those times.
I agree that the Earned Income Tax Credit should not be considered a government benefit. It is a tax incentive to invest one’s labor to make the economy more productive. It is quite comparable to a similar tax credit for the wealthy–the difference between the regular income tax rate and the capital gains tax rate. That tax credit is a tax incentive to invest one’s money to make the economy more productive. In fact, we should call this tax rate difference what it is–an Unearned Income Tax Credit for the wealthy.
@Scott — I absolutely agree with you. The increase in relative cost is not due to policy changes or “enlarged entitlements.” My personal opinion is that this is no reason to avoid cutting them now that circumstances have changed, but that is indeed just an opinion. I am not at all a Republican (though this year I mostly support Ron Paul) and I absolutely agree with you about the spin being put out there, specifically by the right wing, trying to make it seem like safety net spending has gone up at the behest of Democratic policy changes, which isn’t true.
My only issue was that Simon and James seem to add spin of their own, urging that only greedy, inconsiderate, compassion-hating villains could possibly support a spending cut on safety net programs. That’s just as dangerous a way to spin the argument as any misconstrual of what policies have or have not changed.
It’s funny, no one talks about why medical costs are really going up so much.
It’s not because of wonderful new technology or any other magic, it’s because the government negotiates costs with the medical industry with an agreed annual jack-up in prices.
Stop allowing such outrageous prices and you suddenly save $270bn.
Nice job, James. I wholeheartedly agree with your analysis. The solutions are what we need, and need in the next five years, because, beyond that, the mandatory spending will, of necessity increase, that is, unless changes are made in lots of ways. Social Security can be “fixed” in a variety of ways, and could, in fact, be indexed so that it is perminently fixed. Medicare and Medicaid are far different. To fix those, we will need to make some massive modifications, including increasing “Medicare taxes”, and fixing the overall health care “reform” debacle (the “reform” did not, and will not result in reductions of health care spending on a per capita basis, ever, if left unchanged). Of course, we will have to massively pare back the amounts spent on National Securiy and the Military, probably by 50% or more, and this is very achievable regardless of the whinings of the MIC supporters. We will, of course, have to find a way to reverse the effects of the Citizens United decision, before any of this can be done. And, lastly, we will have to find a way to really reform our fiancial oligarchy. You and Simon have made the most meaningful suggestions in this area, but until we can flush the money out, together with the Goldman alumni from key positions, that tragic trajectory will never be cured. There are other obvious things to be done, such as immigration reform and tax reform (start with throwing out the entire US Tax Code and start from scratch to really achieve proper revenue balancing, and stop doing tax subsidies entirely. Tax subsidies are destructive, and hidden not so subtly and nearly impossible to ever change). I think that the issue of entitlements has been proven to be fixable. I’m not so sure about public ignorance.
“nor have they expanded to cover more people” means the definition of who’s covered hasn’t been changed to include people who weren’t covered before ?
To understand the mess that is the *health care*, just follow one person’s *influence* in politics – Donald Rumsfeld.
From his scientific contribution of aspartame to the dumbed down masses on to the doctrine of *cheap* wars…a War Lord and Drug Lord combined.
So the lobbyists of war/drug/slave lords DID wrote the *health spending* 3000 page rube goldberg contraption – you betcha it’s *evil*. I’d even say it’s iniquitous because the intention is to damage the stupid masses as much as possible – sadism run rampant.
The cry of *unfair* – seriously? The oilygarths wake up every morning and start droning in judgement about WHY the 99% don’t deserve ANYTHING…
Occupy the Town Hall Meetings. Occupy the Churches and hit the communication gizmo the *hierachy* deigned to distribute to *send*, not *receive*.
Delusional City does not have a *choice* anymore. We the People are back in charge.
Yes the increase in health care costs is a problem, but not the problem being discussed in the NY TImes article. In that article there are people getting Government assistance who don’t want to have to take it, and I actually feel for them, because they shouldn’t have to. Unfortunately they don’t understand what is really causing this problem – it is income inequality. In the past, even the “working poor” could save a little money and see the quality of their lives, or at least the lives of their children get better. If they worked hard, didn’t get arrested, didn’t have drug or alcohol problems they could get jobs that paid a living wage, and where the pay increased as they got more experience. That is what is now gone. The GDP of our nation is higher than it was 30 years ago but that wealth is being stripped off the top by the wealthy and the system they have gamed. We’ve all but gotten rid of unions, pensions and sweat equity loans. The CPI has been artificially kept low by the ever decreasing cost of gadgets and do-dads, while the costs of essentials to a better life; health care, education, energy etc. have gone up exponentially. A Dunkin Donuts cashier can afford a smart phone, not because she’s frivolus but because its not that expensive -while one semester of college exceeds her yearly salary.
So we have these systems put in place that were supposed to help a small portion of our society who needed to get back on their feet during bad times. Now we’re seeing the majorty suffering through these bad times all the time and these programs are in place and being used by huge numbers. And who do they blame? the politicians who want to keep the programs And why? Because humiliation is a strong motivator and many of these people are proud and work hard and they see the Democrats as the source of their humiliation instead of those who keep food on their table. We all know they should be made at the Republicans, but not because they want to cut these programs – but rather because they want to keep in place a tax system and a rent seeking economy that keeps these hard working people from getting the salaries and benefits they deserve from the private economy rather than the government. Where is Samual Gompers when you need him?
Avedon has a key point about medical care costs rising not because of new technology, etc, but because of a certain collusion between government and the whole medical industrial complex. As several liberal economists have pointed out, the whole deficit problem is mostly a problem about out of control rising health care costs. You keep coming back to the fact that most other developed countries spend about 50 to 60% of what we do, have similar or better outcomes, and cover everyone. I knew the Democratic health care plan was a problem because none of the big players were screaming and yelling. If you want to get health care costs down, you are going to have to upset some of the big groups like the drug and insurance companies. You are also going to have to have an intelligent discussion about “rationing”. We cannot continue to pretend we are going to cover everything for everybody.
The most disturbing thing to me is that neither party, Republican or Democratic, wants to deal with this cost problem. For example, all the discussion about reigning in Medicare has to do with passing on the costs to someone else–the states, the elderly, etc. We should be focused on bringing down costs to a reasonable level. I’m tired of our whole messy dirty inhumane medical system in this country. When we turn our political parties lose on the problem, they keep coming up with rag tag, complicated kluges. I wish we would just adopt one of the European systems or the Canadian system, all of which work better than ours.
Lobbyists wrote *obamacare*….and China wants to empty out the Social Security fund….
SURPRISE!
not that stupid after all…
In the larger historic and global framework, these “particulars” are mere quibbling from politicized major drift… (pay close attention to the discussion starting at 17 minutes).
Here’s Noam Chomsky (MIT) in a talk filmed at Northeastern University, Boston on Dec. 5, 1997. Fascinating how much he said at the time that captures current affairs today…policy and decision making are pretense to legitimating a totalitarian power emergence based upon the fallacy of “free market” and its attack upon Democracy.
http://www.alternet.org/story/154137/
Moyers: Meet the Shameless Plutocrats Choking What’s Left of Our Democracy
By Bill Moyers and Michael Winship, BillMoyers.com
Posted on February 14, 2012
“Watching what’s happening to our democracy is like watching the cruise ship Costa Concordia founder and sink slowly into the sea off the coast of Italy, as the passengers, shorn of life vests, scramble for safety as best they can, while the captain trips and falls conveniently into a waiting life boat.
We are drowning here, with gaping holes torn into the hull of the ship of state from charges detonated by the owners and manipulators of capital. Their wealth has become a demonic force in politics.
Watching what’s happening to our democracy is like watching the cruise ship Costa Concordia founder and sink slowly into the sea off the coast of Italy, as the passengers, shorn of life vests, scramble for safety as best they can, while the captain trips and falls conveniently into a waiting life boat.
We are drowning here, with gaping holes torn into the hull of the ship of state from charges detonated by the owners and manipulators of capital. Their wealth has become a demonic force in politics.”
(read all):
http://www.alternet.org/story/154137/
Moyers: Meet the Shameless Plutocrats Choking What’s Left of Our Democracy
By Bill Moyers and Michael Winship, BillMoyers.com
Posted on February 14, 2012
Another fabulous site, complements of our beloved Bruce. Thanks again Bruce, i’m gonna owe ya dinner one of these days.
http://www.imf.org/external/pubs/ft/fandd/2011/09/berg.htm
From the IMF :
Equality and Efficiency
Finance & Development, September 2011, Vol. 48, No. 3
Andrew G. Berg and Jonathan D. Ostry
“It may seem counterintuitive that inequality is strongly associated with less sustained growth. After all, some inequality is essential to the effective functioning of a market economy and the incentives needed for investment and growth (Chaudhuri and Ravallion, 2007). But too much inequality might be destructive to growth. Beyond the risk that inequality may amplify the potential for financial crisis, it may also bring political instability, which can discourage investment. Inequality may make it harder for governments to make difficult but necessary choices in the face of shocks, such as raising taxes or cutting public spending to avoid a debt crisis. Or inequality may reflect poor people’s lack of access to financial services, which gives them fewer opportunities to invest in education and entrepreneurial activity.” http://www.imf.org/external/pubs/ft/fandd/2011/09/berg.htm
Thanks Owen ! You make it worth the effort with nice thoughts like that! Hope you and the family are all healthy and doing well against the tides. These are fascinating days..to say the least.
@Owens: This is also worth the time to view.
…from Chomsky again:
Noam Chomsky on the State-Corporate Complex: A Threat to Freedom and Survival
So much of the middle-class welfare is comprised of the “tax expenditures” for interest deductions, state and local tax deductions, non-taxation of employer health insurance premiums, etc., etc. Get real!
Likewise, too you and yours, Bruce, and when I get a spare 2 hours, I will indeed check out the video. Thanks again
bobthebayesian:
“Look, having increased demand on a government program, even if the benefits it was designed to offer have not fundamentally changed, is increasing the safety net. If costs associated with a safety increase, for any reason, the safety net is therefore increased even if the scope of the policy, as expressed in natural language, have not changed.”
It is a semantic question. If I hear that a government has increased the safety net, I think of increased protection for some individuals, not increased total numbers of needy individuals. In my view, the prolonged unemployment insurance was an increase in the safety net, but the dependence by more people on UI was not.