How the Welfare State Erodes Social Capital, as Illustrated by a Chuck Asay Cartoon

I’m a big fan of Chuck Asay’s political cartoons. My favorite is his nothing-left-to-steal masterpiece.

And his tractor cartoon and his regime-uncertainty cartoon are brilliant indictments of Obamanomics.

Here’s another classic. It shows the impact of the welfare state on incentives for work, self reliance, and independence.

In six cartoon frames, he cleverly explains the economics of labor supply in a welfare state. Heck, there are many economists who could learn something from Asay’s work.

With gems like this, no wonder he came in second place in my political cartoonist contest.

This unsigned Wizard-of-Id parody has the same basic message about labor supply and handouts, and here’s a chart with some staggering real-world evidence of how the welfare state discourages people from productive behavior.

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The Moocher Hall of Fame Welcomes its First Danish Member

Back in 2010, I posted a “Moocher Index” showing the states with the most dependency. But that was based on numbers and lacked any human-interest angle.

So let’s create a Moocher Hall of Fame for the individuals who best exemplify the culture of loafing, laziness, and dependency that is being subsidized by our vote-buying political class.

But you don’t receive this honor simply by accepting other people’s money. Membership in the Moocher Hall of Fame is reserved for deadbeats who demonstrate some special characteristic that warrants their induction.

* Let’s start with Olga, a Greek woman who earned membership in the Hall of Fame because she protested against the notion that she should be responsible for her own life since she might have to – gasp! – work more than one job and live at home.

* Another proud member of the Hall of Fame is Stanley, who was a shoo-in for the honor after it was learned that this 30-year old man has been scamming disability checks from the government so he can fulfill his fetish of wearing diapers and being an “adult baby.”

* Leroy entered the Hall of Fame after it was reported that he won $2 million from the lottery, but somehow is still collecting food stamps.

* A welfare mother with 11 kids in the United Kingdom was invited into the Hall of Fame after one of her sons was arrested for looting and she said “the riots are because the government does “f*** all” for children.”

* If the Hall of Fame had an award for going above and beyond the call of loafing, then Hans from Austria would be an obvious choice. He cut off his own foot to ensure continued handouts.

* We also have a husband-wife team in the Hall of Fame. Alicia and Matthew were unanimous inductees after it was revealed that they tried to impregnate a 12-year old girl to increase their welfare payments.

* Speaking of husband-wife duos, let’s not forget Danny and Gina, who bragged that it didn’t make sense for them to work when the government was providing them with enough loot to enjoy an apartment, a big flat-screen TV, and 40 daily cigarettes.

* Abdul from Australia is an esteemed member of the Hall of Fame’s terror wing, having received 19 years of welfare while plotting to kill the people who were paying for his life of leisure.

* Keeping with that theme, let’s also recognize Anjem, who got elected to the Hall of Fame for collecting about $40,000-per year in handouts while spewing hate and recruiting other “fanatics to copy him by going on benefits.”

* Last but not least, we have Natalijia, a Lithuanian woman who in now enjoying foreign holidays and designer clothes thanks to the generosity of British taxpayers, but nonetheless complained that she wasn’t getting a taxpayer-financed nanny.

Quite a collection of scroungers.

But I don’t think they’re very bright. They wanted to invite Julia to be the speaker at this year’s induction ceremony, apparently not realizing that she was a make-believe cartoon character created by the Obama campaign to celebrate dependency.

Perhaps they should ask Obama to speak. After all, more people have latched on to the disability system during his presidency than have gotten jobs. Quite an achievement…of sorts.

But I’m digressing. The purpose of this post is to announce the newest member of the Moocher Hall of Fame.

Our proud new bum comes from Denmark. Known as “Lazy Robert,” he’s been mooching off the taxpayers for 12 years and he’s very proud of his lifestyle. Here are some inspirational details from a New York Times report.

Robert Nielsen, 45, made headlines last September when he was interviewed on television, admitting that he had basically been on welfare since 2001. Mr. Nielsen said he was able-bodied but had no intention of taking a demeaning job, like working at a fast-food restaurant. He made do quite well on welfare, he said. He even owns his own co-op apartment. …Mr. Nielsen, called “Lazy Robert” by the news media, seems to be enjoying the attention. He says that he is greeted warmly on the street all the time. “Luckily, I am born and live in Denmark, where the government is willing to support my life,” he said.

The story also mentions another Danish moocher. Her story is worth sharing because it shows how the folks riding in the wagon enjoy higher living standards than many of those pulling the wagon.

Visit a single mother of two on welfare, a liberal member of Parliament goaded a skeptical political opponent, see for yourself how hard it is. It turned out, however, that life on welfare was not so hard. The 36-year-old single mother, given the pseudonym “Carina” in the news media, had more money to spend than many of the country’s full-time workers. All told, she was getting about $2,700 a month, and she had been on welfare since she was 16.

This probably doesn’t bode well for Denmark’s future. As illustrated by this famous set of cartoons, this kind of system creates very perverse incentives.

By the way, I decided that Carina didn’t deserve membership in the Hall of Fame because at least she has the decency to be ashamed. Or at least that’s one I’m assuming since the story says she “will no longer give interviews.”

But there are some people who genuinely deserve something, and those folks are the taxpayers of Denmark. They deserve our sympathy. They have one of the world’s most oppressive tax systems, thanks in part to a welfare system that provides a comfortable hammock for Robert and Carina.

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Welfare Handouts for Promoting Terrorism

I don’t think the federal government should be in the business of redistribution income. Simply stated, the welfare state has been a disaster for both taxpayers and recipients.

But our system, with whatever flaws it might have now or in the future, presumably will never be as crazy as the system in the United Kingdom.

A reader sent a story that blows my mind. Our cousins across the ocean give big welfare handouts to terrorist agitators. Here are some excerpts from The Sun.

British taxpayers subsidize this hate-filled moocher

…hate preacher Anjem Choudary has told fanatics to copy him by going on benefits — urging: “Claim your Jihad Seeker’s Allowance.” He cruelly ridiculed non-Muslims who held down 9-to-5 jobs all their lives and said sponging off them made plotting holy war easier. …Father-of-four Choudary, who has praised terrorist outrages, pockets more than £25,000 a year in benefits — £8,000 more than the take-home pay of some soldiers fighting the Taliban in Afghanistan. He laughed as he told supporters:  “You find people are busy working the whole of their life. They wake up at 7 o’clock. They go to work at 9 o’clock. They work for eight, nine hours a day. They come home at 7 o’clock, watch EastEnders, sleep, and they do that for 40 years of their life. That is called slavery.

This dirtbag is right about one thing. It is a form of slavery to involuntarily confiscate money from the hard-working taxpayers of the United Kingdom and give the money to scroungers such as Choudary.

Choudary may be a despicable worm, but he’s clever enough to bilk the system.

Figures obtained by The Sun in 2010 showed the extremist cleric received £15,600 a year in housing benefit to keep him in a £320,000 house in Leytonstone, East London. He also got £1,820 council tax allowance, £5,200 income support and £3,120 child benefits — equivalent to a taxed salary of £32,500.

A £320,000 house?!? That’s about $500,000! That’s probably more valuable than the average home of the people paying punitive taxes to support this deadbeat.

For all intents and purposes, Choudary is like Natailija, Tracey, and Gina and Danny – but far worse since he sponges off the taxpayers and also advocates for terrorism. All subsidized by tax dollars.

P.S. You probably won’t be surprised to learn that the French government gives welfare handouts to terrorists. But I’m surprised the Australian government also allows mooching by pro-Jihad activists.

P.P.S. The good news is that at least some leftists are beginning to realize that the welfare state cripples people by creating government dependency.

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Plagued by Rising Costs and Vulnerable to Fraud, It’s Time to Focus Attention on the Disability Progam

When I think of the disability program, I think of the bum who is collecting a check so he can be an “adult baby” and indulge his fetish of wearing diapers. Though I guess that’s not as bad as the situation in Greece, where you can get a disability payment for being a pedophile.

But this is a much bigger and more serious issue. Earlier this morning, I took part in a joint Brooking Institution/American Enterprise Institute/Secretary’s Innovation Group conference on the disability insurance program.

I only had a minor role, posing question to Mark Duggan of the University of Pennsylvania and Stephen Goss of the Social Security Administration, but it was a very useful exercise because I was exposed to some sobering details about the program.

Let’s review a couple of Professor Duggan’s charts, starting with a look at how the disability rate has exploded in the past 22 years.

And here is some very disturbing data showing that much of the increase is in the areas that are most subject to abuse because of subjective judgements about “bad backs” and “depression.”

Hmmm…, I’m a bit depressed about the ever-rising burden of government. Maybe I should get a check from the government!

Joking aside, I briefly touched on this issue in a recent CNBC interview. Here’s the segment dealing with the disability program and the disturbing rise in dependency.

I’m not overly impressed by the counter-argument from Christian Weller. Does he really want us to believe that the service sector jobs of today are more disabling than the manufacturing jobs of 20-plus years ago?

This is a depressing topic, so let’s close with a couple of cartoons, starting with this gem from Chip Bok.

It’s amusing, but keep in mind that we have an unusually high joblessness rate right now, but it would be even higher if we counted the people who shifted to this other form of unemployment dependency.

And here’s a Chuck Asay cartoon that I really like because he augments my argument in the interview that it hurts the economy when you lure workers out of the job market and make them wards of the state.

Asay takes it one step farther and shows the lifeboat sinking. That’s basically what will happen if we don’t adopt the entitlement reforms that are needed to rein in the welfare state.

P.S. If you want some jokes referencing the disability program, we have the politically correct version of The Little Red Hen, as well as two very similar jokes about Jesus performing miracles and how liberals differ from conservatives and libertarians.

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Another Horrifying and Depressing Look at the Human Cost of the Welfare State

When we think of Julia, the mythical moocher created by the Obama campaign, our first instinct is probably to grab our wallets and purses. After all, she symbolizes the entitlement mindset, as illustrated by this Ramirez cartoon.

But let’s think of this from Julia’s perspective and speculate about what it will mean for her life. Shouldn’t we worry whether a life on the dole will destroy her spirit?

Or perhaps that question is too abstract, so let’s make it more personal. Would we ever want any of our children and grandchildren to become wards of the state, living empty and hollow lives of dependency and never achieving anything?

The answer is no, of course, because we want our loved ones to have good and happy lives.

So why, then, would anybody want to impose that fate on a stranger? And this isn’t an abstract question. That’s what the welfare state does, every day, over and over again, subsidizing poverty and sloth.

And not just in the United States. I shared a truly sad video a couple of years ago showing how the British welfare state created multi-generational poverty and misery.

Now we have another video, this one from the folks at The Commentator, showing a news report from London that should anger all taxpayers. But it also should upset all people who care about rescuing people from government-induced emptiness.

I’m almost at a loss for words. At the risk of making sweeping judgments based on a short news clip, it appears that this poor woman’s life has been destroyed by government dependency.

And if you’re wondering how someone could ever allow themselves to be caught in the quicksand of the welfare state, don’t forget the story of Natalija, as well the expose about Danny and Gina. They are all healthy young people who made rational economic decisions to mooch since they could enjoy more comfortable lives.

The same thing happens in America. This story from Pennsylvania also shows that it can be far more lucrative to rely on handouts than to climb the economic ladder.

Just in case you think that’s an isolated example, look at this remarkable chart revealing how life on the dole can be much more remunerative than a life of striving and work (you can see similar charts for the U.K. by clicking here).

Let’s return to the woman in the video. I confess that I’m a bit conflicted. Should I feel sorry for Ms. MacDonald or should I look down on her?

The government has wrecked her life with handouts, yet there are probably people just like her who made the choice to avoid dependency and climb out of poverty. If you believe in free will, then she deserves some scorn.

That being said, I’m much more willing to heap abuse on Natalija, Gina, and Danny. They’re young and they should know better. Then again, in 30 years, how will they be different from the woman in the video?

These questions don’t have any good answers, so let’s close with a few examples of how the welfare state subsidizes some truly odd behavior.

• In the battle of the bums, we’ve had the spectacle of “Diaper Man” vs “Footless Hans.”
• In the contest for most despicable moocher, we have the “Florida Pedophiles” vs the “Gimme Babymaker.”
• In the perverse challenge match to subsidize one’s enemies, there’s the “Australian Jihadist” vs the “French terror suspect.”

And remember, you’re paying for all this!

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Mirror, Mirror, on the Wall, Which State Has the Highest Food Stamp Usage of All?

The food stamp program seems to be a breeding ground of waste, fraud, and abuse. Some of the horror stories I’ve shared include:

• Using food stamps to buy luxury coffee at Starbucks.
• Buying steaks and lobster with food stamps.
• The Obama Administration rewarding states that sign up more food stamp recipients.
• Proposals to make it easier to use food stamps at fast food restaurants.
• College kids scamming the program for handouts.
• New York City giving food stamps to newly released prisoners and running foreign-language ads encouraging more people to sign up for the program.
• The Octo-Mom mooching off the food stamp program.
• The Agriculture Department running radio ads to lure more people into food stamp dependency.

With stories like this, I’m surprised my head didn’t explode during this debate I did on Larry Kudlow’s show.

So exactly how bad is the food stamp program?

One way of measuring the cost of the program, both to taxpayers and to the people who get trapped in dependency, is to see what share of a state’s population is utilizing the program.

I just did a “Mirror, Mirror” post on states with the most education bureaucrats compared to teachers and got a lot of good feedback, so let’s do the same thing for food stamps.

Here’s a rather disturbing map from the Washington Post.

A couple of things stand out. I can understand Mississippi, Louisiana, and New Mexico being among the worst states because they have relatively low average incomes. And that’s sort of an excuse for Tennessee, though it’s worth noting that economically and demographically similar states such as Georgia and Alabama don’t fall into the same dependency trap.

Why such a significant handout culture?

But the state that stands out is Oregon. Based on the state’s income, there’s no reason for more than 20 percent of resident’s to be on the dole. The state does get a “high” ranking on the Moocher Index, so there’s some evidence of an entitlement mentality. And welfare handouts also are above average in the Beaver State as well.

It’s also disappointing to see that food stamp dependency has doubled since 2008 in Florida, Rhode Island, Nevada, Utah, and Idaho. Though it’s a credit to the people of Utah that they’re still in the least-dependent category. But the trend obviously is very bad.

And it’s also depressing to look at the bar chart on the right and see that spending on the program has tripled in the past 10 years. Heck, food stamps were about 70 percent of the cost of a recent Senate “farm bill.”

P.S. A local state legislator asked an official in Richmond why Virginia got such a bad score in the ranking of teachers compared to education bureaucrats. The good news, so to speak, is that Virginia is not as bad as suggested by the official numbers. According to the response sent to this lawmaker, “VDOE has determined that the data it reported on school division personnel and assignments to NCES for 2005-2006 through 2009-2010 through the US Department of Education’s EdFacts Portal were inaccurate.”

The bad news, as you can see from this table, is that there are still more edu-crats than teachers, but the ratio apparently isn’t as bad with this updated data.

As a Virginia taxpayer, I suppose I should be happy. But it’s hard to get overly excited when other states are taking positive steps to bring choice and competition to education, and the best thing I can say about the Old Dominion is that we’re not quite as infested with bureaucrats as we originally thought.

P.P.S. I guess I should give the left-wing Washington Post some credit for sharing the map on food stamp dependency. And, to be fair, the paper did reprint this remarkable chart showing how bad Obama’s record is on jobs compared to Reagan and Clinton. And the paper also printed this chart showing how the economy’s performance is way below average under Obama.

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Will Growing Dependency and Erosion of Social Capital Turn America into Europe?

One of my favorite political cartoons is this Michael Ramirez gem showing President Obama following the European lemmings over the cliff of statism.

But this isn’t a laughing matter. As shown in this remarkable graph on global living standards, Americans enjoy significantly more consumption than their European counterparts.

And here’s another set of charts showing a big gap between the United States and Europe.

So the obvious question is whether we should copy the statist policies of our cousins across the Atlantic.

This video explores some of the possible consequences.

The video should make us contemplate the importance of cultural attitudes.

Values such as the work ethic, the spirit of self reliance, and personal responsibility are all form of social capital that help an economy prosper.

But if social capital begins to erode, restoring it is a bit like trying to put toothpaste back in a tube.

So while I obviously think tax and spending policy is important, pro-growth fiscal policy may not mean much in a society where dependency and mooching are considered acceptable lifestyles.

Which is why the third and fourth lessons in this video on the European fiscal crisis are very important.

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A Warning from Ronald Reagan

If you want some inspiration from Ronald Reagan, these brief remarks reveal his understanding of both economics of history (especially with regards to the other great president of the 20th century).

And this short video excerpt also gets me fired up to fight big government.

But maybe it’s also time to share a warning from the Gipper. Here’s a quote (which I’ve verified since not everything that lands in my inbox is necessarily accurate) about the perils of government dependency.

This actually overstates the competence of government.

Communist nations, after all, didn’t do a very good job at providing food, shelter, and healthcare. Though, to be fair, there were quite proficient at turning people into slaves and prisoners.

We have a reverse problem in today’s welfare states. The people who produce the most are being coerced into turning over 50 percent of their earnings, which is sort of akin to the way the nobility treated serfs in medieval times.

Meanwhile, the “slaves” and “prisoners” wind up living rather comfortable lives, oftentimes bribed into government dependency because they can enjoy higher living standards by mooching rather than working.

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A Real-Life Example of How Government Handouts Create Life-Sapping Dependency

Remember Julia, the mythical moocher created by the Obama campaign to show the joys of government dependency? As illustrated by this Ramirez cartoon, Julia symbolizes the entitlement mentality.

Unfortunately, there are many real-life Julias.

I wrote a couple of years ago about Olga, a Greek woman who petulantly believed that government was responsible for her empty life.

But we don’t know any details about Olga other than her desire to mooch, so the best real-world examples of Julia may be from England. We have Natalija, a Lithuanian immigrant who has quickly learned bad habits of dependency, and Danny and Gina, two native-born scroungers.

Natalija, Danny, and Gina all decided to get a free ride from taxpayers, largely because overly generous handouts meant that they could enjoy higher living standards by staying at home and watching TV rather than living productive lives.

And if these info-graphics are any indication, there must be lots of people in the United Kingdom who make similar calculations.

No wonder English employers sometime have a hard time filling slots. Why climb the economic ladder when government is providing a comfy hammock?

Unfortunately, the same misguided policies exist in the United States. I shared a remarkable chart last year showing that a household would be better off with $29,000 of income rather than $69,000 of income because of the combined impact of both taxes and redistribution programs.

Now, courtesy of some first-rate journalism by a local television station, we have a powerful example exposing how the system operates. We learn the story of Kristina, who chooses to earn less money in order to keep the taxpayer-funded gravy train rolling.

We’ve all heard the line that America is becoming an entitlement society or welfare state, with half of U.S. households now receiving some type of government benefit. But a CBS 21 News investigation has taken that stat one step further to show you how much people are actually getting for free. A few years ago, reporter Chris Papst worked with a single mom who had two children. She turned down a raise because she said the extra money would decrease her government benefits. It was hard to understand why she did that, until Chris started working on this story. “You do what you have to do as a single mom,” explained Kristina Cogan. “And that’s what I did.” ……she admits living a life off the government can be comfortable. “If you’re going to get something for free, are you going to work for it?” Cogan explained. “It kind of like sucks you in.”

Here are some of the horrific details.

For this story, CBS 21 researched what government programs are available to a single mother of two making $19,000 a year. What we found was incredible. Our family would be eligible for $14,976 in free day care, another $13,400 for Head Start and Early Head Start, $7,148 in housing vouchers, $6,500 for weatherization projects, $400 to pay heating bills, $480 a year for a cell phone, with an extra $230 for a land line, and $182 in free legal advice. The family would get more than $6,028 in food assistance and another $6,045 in medical assistance. The mother is eligible for $5,500 in Pell Grants for school with an additional $12,000 for the Education Opportunity Grant; SMART Grant; and TEACH Grant. Our family would also get $6,800 in tax credits, and $1,900 in withholding would be returned. Add it up and this family can get $81,589 in free assistance.

There’s nothing in the story to suggest that Ms. Cogan is utilizing all these programs, but the plethora of available goodies certainly helps to explain why so many people decide it’s easier to be moochers rather than producers.

Which also explains why the welfare state is a recipe for ever-increasing dependency, as shown by this famous set of cartoons.

Which also causes a sluggish economy, as illustrated by this Chuck Asay cartoon.

No wonder the share of households taking something from the government has been increasing. And no wonder the poverty rate stopped falling once the government’s so-called War on Poverty began.

P.S. Most stories about welfare are pathetic, as we see from this dependency contest featuring the “Connecticut Kid” vs the “English Loafer.” But the welfare state also breeds more bizarre behaviors.

• In the battle of the bums, we’ve had the spectacle of “Diaper Man” vs “Footless Hans.”
• In the contest for most despicable moocher, we have the “Florida Pedophiles” vs the “Gimme Babymaker.”
• In the perverse challenge match to subsidize one’s enemies, there’s the “Australian Jihadist” vs the “French terror suspect.”

P.P.S. Are you subsidizing bad behavior? Click here to see a map revealing which states offer the most extravagant welfare benefits.

P.P.P.S. Share this video to help others understand the high cost of the welfare state.

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Thanks to the Welfare Hammock, Here’s another Horror Story about Deadbeats Sponging Off British Taxpayers

I posted a horrifying story last week about a Lithuanian immigrant who was mooching off British taxpayers.

She basically had a very comfortable life thanks to beleaguered taxpayers, and I compared her to a Greek woman who thought the state owed her everything.

But there’s no ethnic requirement to be a bum. I’ve also shared stories about American moochers and Austrian moochers.

I’ve even shared stories about terrorists getting welfare handouts in Australia and France!

So I hope my British friends won’t be upset that I’m now going to highlight a couple of English deadbeats.

Here are some odious details from the UK-based Sun.

Danny Creamer, 21, and Gina Allan, 18, spend each day watching their 47in flatscreen TV and smoking 40 cigarettes between them in their comfy two-bedroom flat. It is all funded by the taxpayer, yet the couple say they deserve sympathy because they are “trapped”.

Does this mean they are imprisoned? Is someone holding them at gunpoint?

Hardly. It simply means that these two scroungers get such lavish handouts that their living standards would fall if they actually lived decent and honorable lives and went to work.

The couple, who have a four-month-old daughter Tullulah-Rose, say they can’t go out to work as they could not survive on less than their £1,473-a-month benefits. The pair left school with no qualifications, and say there is no point looking for jobs because they will never be able to earn as much as they get in handouts. Gina admits: “We could easily get a job but why would we want to work — we would be worse off.” Danny’s father, 46, even offered him a job with his bowling alley servicing company — but could not pay him enough.

So how much are these moochers stealing from taxpayers? Quite a lot, particularly if you keep in mind that £1 is equal to $1.57.

The couple, who live in Hants, receive £340 a week, made up of £150 housing benefit, £60 child tax credit, £20 child benefit and £110 in Job Seeker’s Allowance. They pay just £25 towards their spacious £625-a-month home. Their lounge is dominated by the huge TV and a leather sofa. …They spend the same on tobacco as they do on their daughter’s milk and nappies.

Gee, isn’t that nice. Taxpayers are even financing their cigarettes.

I blame Danny and Gina for being a couple of bums, but I also blame British politicians for creating a lavish welfare state that enables this awful behavior.

It’s not that people are trapped in poverty, but they definitely are lured into dependency.

By the way, the same problem exists in the United States. Indeed, this chart shows that the plethora of freebies from taxpayers means a household can be better off with $29,000 of income rather than $69,000 of income.

No wonder the poverty rate stopped falling once the so-called War on Poverty began.

For more information, here’s a short debate I had about the topic, and here’s a video explaining how the welfare state is bad for both poor people and taxpayers.

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Obama’s Vision of a Nation of Takers

If you don’t want to be depressed, you should stop reading right now.

You probably know that we’ve been suffering because of a rising burden of government spending. And you probably understand that much of the problem is the relentless growth of redistribution and transfer programs.

But you probably don’t realize how far America has traveled in the wrong direction.

In today’s Wall Street Journal, Nicholas Eberstadt of the American Enterprise Institute rips apart President Obama’s empty assertion that the welfare state is desirable.

…the president is tired of listening to critics of America’s entitlement programs, and as far as he is concerned, the discussion is now over. It is not over—and won’t be anytime soon, because the country’s social-welfare spending is generating severe and mounting hazards for the nation. These hazards are not only fiscal but moral.

Eberstadt shares a bunch of bullet points that should worry anybody who cares about the future of the nation, starting with an inverse version of Mitchell’s Golden Rule. Handouts have been growing twice as fast as overall personal income!

• Over the 50-plus years since 1960, according to the Bureau of Economic Analysis, entitlement transfers—government payments of cash, goods and services to citizens—have been growing twice as fast as overall personal income. Government transfers now account for nearly 18% of all personal income in America—up from 6% in 1960.

• According to the BEA, America’s myriad social-welfare programs (the federal bureaucracy apparently cannot determine exactly how many of these there are) currently dispense entitlement benefits of more than $2.3 trillion annually. Since those entitlements must be paid for—either through taxes or borrowing—the burden of entitlement spending now amounts to over $7,400 per American man, woman and child.

The $7400 figure for per-capita redistribution burden is astounding. Others have calculated that this is akin to $60,000 for every poor household.

And even though I’ve written about the 49 percent figure, I had no idea that such a small portion was due to the aging population.

• According to the latest data from the U.S. Census Bureau, nearly half (49%) of Americans today live in homes receiving one or more government transfer benefits. That percentage is up almost 20 points from the early 1980s. And contrary to what the Obama White House team suggested during the election campaign, this leap is not due to the aging of the population. In fact, only about one-tenth of the increase is due to upticks in old-age pensions and health-care programs for seniors.

A big problem is that many working-age people have decided not to work.

• As entitlement outlays have risen, there has been flight of men from the work force. According to the Bureau of Labor Statistics, the proportion of adult men 20 and older working or seeking work dropped by 13 percentage points between 1948 and 2008. …In December 2012, more than 8.8 million working-age men and women took such disability payments from the government—nearly three times as many as in December 1990. For every 17 people in the labor force, there is now one recipient of Social Security disability program payments.

The solution, of course, is entitlement reform.

But that’s just part of the answer. We also need to change the culture. If people decide it is okay to live off the government, even leftists have begun to admit that it is very hard to re-create a system of self reliance.

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Olga from Greece Has a Lithuanian Soulmate Mooching in the United Kingdom

The welfare state creates some amazingly pathetic and disgusting individuals.

• In the battle of the bums, we’ve had the spectacle of “Diaper Man” vs “Footless Hans.”
• In the contest for most despicable moocher, we have the “Florida Pedophiles” vs the “Gimme Babymaker.”
• And the fight for most pathetic victim of dependency features the “Connecticut Kid” vs the “English Loafer.”

But I’ve never found a match for Olga, a Greek woman who thinks it is government’s job to take care of her from cradle to grave.

At least not until now. I’m excited to announce that Olga has a soulmate named Natalija. She’s from Lithuania, but she now lives in England, and she doubtlessly will inspire Olga on how to live off the state.

Here’s some of what The Sun reported about this very successful moocher.

Natalija Belova, 33, told The Sun how she spurns full-time work — yet can afford foreign holidays and buys designer clothes. The Lithuanian said: “British benefits give me and my daughter a good life.” She has milked soft-touch Britain for £50,000 in benefits and yesterday said: “I simply take what is given to me.”

And what is given to her? Quite a lot.

The graduate, who became a single mum after she arrived here, rakes in more than £1,000 a month in handouts — £14,508 a year — to fund her love of designer clothes, jaunts to the Spanish sun and nightclubbing. She bragged: “I have a lovely, fully-furnished flat and money to live properly on. …Her handouts total £279 a week — with housing benefit contributing £183, child tax credit adding £56, child benefit £20 and her council tax being paid to the tune of £20.

You might expect Natalija to be grateful, but you’d be wrong.

But she does have one criticism. Natalija moaned: “I think they should help pay for private nannies, rather than just free nursery.” …Natalija vowed: “I am not going to work like a dog on minimum wage.” She added: “I don’t care what anyone thinks. I’m not doing anything wrong. “I know people won’t like to read this, but what would they do? “Would they not take the money that was being handed to them to stay with their child all day?”

I’ve written about the benefits of tax competition between nations. Well, this story shows the perverse impact of welfare competition between countries.

Speaking at her two-bedroom pad that came fully furnished in Watford, Herts, courtesy of the taxpayer, grateful Natalija said: “In Lithuania the benefits system does not pay enough. “I have a friend over there who is a single mother. “She only gets £20 a month in child benefit, plus some discounted help with gas and electricity — and some housing help. “It’s not enough to keep a normal level of life, like here. “If I was on benefits there, I couldn’t afford nice clothes or the holidays abroad.” She went on: “I am sure people will say I should return to Lithuania. But that won’t be happening. Being in Britain offers me far better benefits.”

We also have a remarkable example of labor supply economics. This is the real-world example of these charts showing how the British welfare state destroys incentives.

She is careful to work fewer than 16 hours a week so that the benefits keep rolling in. But her wages boost her income to more than £400 a week. On top of that she gets free childcare, fruit and milk vouchers — and even a clothes allowance for “job interviews”. Natalija said: “It is a strange system in this country. Basically, the fewer hours I work, the more I can earn on benefits. But that’s the way it is and it is not my fault.” …She insisted she would be prepared to get a full-time job — but only if the salary tops £25,000. …”Some people may think I am picky. But I am a realist. I need a full-time job that pays at least £25,000 — that is just enough to cover all my living costs that benefits currently pay for. “Otherwise working full time is not worth my while. “If I worked full time, I’d have to pay for childcare costs as well as rent and all my bills. “The benefits system in this country means that I do not have to do this.”

By the way, here’s a chart showing the same destructive policies in the United States.

Let’s look at one last excerpt about Natalija. British taxpayers can take comfort in the fact that this human tick is living a nice life.

In September she escaped the dreary British summer by jetting off with her daughter for a sun-kissed week in Spain. Last month she enjoyed a second holiday — back in her Lithuanian homeland. Natalija, who has three credit cards and loves to go on sprees at designer clothes stores, crowed: “After our holiday to Malaga, we went to Lithuania over Christmas and spent £1,000.” She continued: “I love to buy clothes on my credit cards and often have a blow-out at stores like Roberto Cavalli and the Armani Exchange. …”I also enjoy going to nightclubs and parties with my friends. It’s important to go out and get dressed up. It’s good for my self-esteem.”

Her self esteem has been boosted? Oh, joy!

And I can just imagine how much self esteem her daughter will have after growing up with a moocher for a mother.

John Hinderaker of Powerline was first on this horrific story and his analysis is very much worth reading as well. But since imitation is the sincerest form of flattery, I figured I would share the story and add some of my thoughts.

By the way, if you want more than just horrifying anecdotes, click here for a video that looks at the dismal impact of the American welfare state and click here to see how Obama has exacerbated the negative effects of such policies in America.

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Question of the Week: If You Could Reform only One Major Entitlement Program, Which One Would You Pick?

This is a tough question.

I obviously want comprehensive reform of all entitlement programs, so selecting just one is a bit of a challenge. Sort of like being asked to pick your favorite kid.

Would I reform Social Security? That’s a logical choice. It’s the biggest program in the federal budget, so it’s presumably the biggest problem.

And it sure would be nice to have personal retirement accounts, just like Australia, Chile, and other nations that have modernized their systems.

But Medicare and Medicaid are growing faster than Social Security and the Congressional Budget Office projects that those two entitlements eventually will become a bigger burden on taxpayers than Social Security.

And since our goal should be to minimize the long-run burden of government spending, that suggests that it’s more important to reform the healthcare entitlements.

But which program should be fixed first?

There’s certainly a strong case to deal with Medicare. The health program for the elderly already is very expensive and it’s going to become even more of a budget buster because of demographic changes.

Moreover, shifting to a “premium support” system would be good for seniors since they would have the ability to pick a plan best suited to their needs. Basically the same type of system now available to members of Congress.

All things considered, though, I would deal first with Medicaid. There are three reasons why I would target the health program designed to supposedly help the poor?

1. Medicaid is hugely expensive today and will become even more costly over time.
2. The block-grant reform proposal is a good first step for restoring federalism.
3. Obamacare can be partly repealed by block-granting the exchange subsidies as part of Medicaid reform.

For more information, here’s my video explaining how to reform the program.

I’m not going to cry – or even complain – if politicians instead decide to fix Medicare or Social Security. Just so long as they’re taking steps in the right direction, I’ll be happy.

What I don’t want to see, however, is a gimmicky plan such as Simpson-Bowles that merely papers over the underlying problems for a couple of years. The wrong type of entitlement reform is probably worse than doing nothing.

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If You’re a Moocher, Common Sense Should Tell You Not to Kill all the Producers

Every so often, I try to appeal to statists by explaining to them that it’s not in their self interest to steal too much.

Why? Because if you kill off the geese that lay the golden eggs, what will you do tomorrow when nobody is left to produce?

Heck, even the former leftist President of Brazil understood that there can’t be any redistribution if there’s no production.

I’ve made this point by sharing a very clever cartoon. I’ve made this point on television. And I’ve tried to explain it using simple analysis.

I’m not sure I’ve been overly successful, but perhaps this Chuck Asay cartoon will help get the point across.

The cartoon is akin to the fable of the ant and the grasshopper. But the “modern” version of the story, featuring coerced redistribution that causes the ant to no longer be productive.

Heck, it’s also what we see in the PC version of The Little Red Hen. And the same theme can be found in the amusing anecdote that uses beer to explain the corrosive impact of a “progressive” tax system.

The moral of the story – in every case – is that you shouldn’t be too greedy if you’re living off others.

In my speeches, I often joke that a tick or a flea is in trouble if it’s feasting on a dog that dies. Well, on  a more serious note, this can happen to countries. Greece is in deep trouble because there are too many people riding in the wagon and not enough people pulling the wagon.

We’re not there yet, but I don’t like the trend.

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Do You Live in a “Death Spiral” State?

Three years ago, I put together a “Moocher Index” that measured the degree to which non-poor people in a state were benefiting from redistribution programs.

As you can see if you click on the nearby table, Vermont was the worst state, followed by Mississippi, Maine, New York, and Massachusetts.

I confessed that my Moocher Index was a crude and imprecise tool, but it was one of my most popular posts in the early days of this blog. Probably because it was a way of measuring the degree to which people were being lured to ride in the wagon of government dependency (a very disturbing trend put in visual form by these two cartoons).

So I was very interested when I found that somebody at Forbes did something vaguely similar and came up with a list of “death spiral” states.

Eleven states make our list of danger spots for investors. They can look forward to a rising tax burden, deteriorating state finances and an exodus of employers. The list includes California, New York, Illinois and Ohio, along with some smaller states like New Mexico and Hawaii. …Two factors determine whether a state makes this elite list of fiscal hellholes. The first is whether it has more takers than makers. A taker is someone who draws money from the government, as an employee, pensioner or welfare recipient. A maker is someone gainfully employed in the private sector. …what happens when these needy types outnumber the providers? Taxes get too high. Prosperous citizens decamp. Employers decamp. That just makes matters worse for the taxpayers left behind. Let’s say you are a software entrepreneur with 100 on your payroll. If you stay in San Francisco, your crew will support 139 takers. In Texas, they would support only 82. Austin looks very attractive. Ranked on the taker/maker ratio, our 11 death spiral states range from New Mexico, with 1.53 takers for every maker, down to Ohio, with a 1-to-1 ratio. …The second element in the death spiral list is a scorecard of state credit-worthiness done by Conning & Co., a money manager… Its formula downgrades states for large debts, an uncompetitive business climate, weak home prices and bad trends in employment. …A state qualifies for the Forbes death spiral list if its taker/maker ratio exceeds 1.0 and it resides in the bottom half of Conning’s ranking. It’s easy to see how California got on our list. It has pampered a large army of civil servants while using every imaginable trick to chase private-sector jobs away, the latest being a quixotic scheme to reduce the globe’s atmospheric carbon.

Not surprisingly, there is considerable overlap between the top states in the Moocher Index and the death-spiral states.

So be forewarned. If you live in California, Hawaii, Maine, Mississippi, or New York, it’s quite likely that you are surrounded by people who want you to work harder and pay higher taxes so they can get more handouts.

Heck, that’s true in most states, so you should worry regardless of where you live. Click here to see a very depressing chart about the nationwide increase in dependency.

So what lessons can we learn? Well, if you look at this map, you’ll notice that none of the states without an income tax are death-spiral states.

And if you look at this map, you’ll see that there’s no overlap between death-spiral states and states with the lowest tax burdens.

Hmmm…sort of makes one think that maybe higher taxes aren’t the right way to solve a fiscal mess. Maybe somebody should inform the President.

Last but not least, here’s a map showing the state-by-state generosity of welfare benefits. I don’t detect any correlation with death-spiral states – except for New York and California.

If you live in either of those two states, you may want to escape before it’s too late.

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An Honest Liberal Confronts the Problem of Government Dependency

I’ve written and pontificated about the problem of government-created dependency and how the welfare state traps people in poverty.

I also shared this dramatic chart showing how redistribution programs create shockingly high implicit marginal tax rates for those with modest incomes.

But when a liberal writer for the New York Times basically comes to the same conclusion, that’s a sign that there may finally be some consensus about the need for reform.

Here’s some of what Nicholas Kristof wrote, beginning with an acknowledgement of the welfare state’s perverse incentives.

This is what poverty sometimes looks like in America: parents here in Appalachian hill country pulling their children out of literacy classes. Moms and dads fear that if kids learn to read, they are less likely to qualify for a monthly check for having an intellectual disability. …This is painful for a liberal to admit, but conservatives have a point when they suggest that America’s safety net can sometimes entangle people in a soul-crushing dependency. …Some young people here don’t join the military (a traditional escape route for poor, rural Americans) because it’s easier to rely on food stamps and disability payments. Antipoverty programs also discourage marriage: In a means-tested program like S.S.I., a woman raising a child may receive a bigger check if she refrains from marrying that hard-working guy she likes. Yet marriage is one of the best forces to blunt poverty. In married couple households only one child in 10 grows up in poverty, while almost half do in single-mother households. Most wrenching of all are the parents who think it’s best if a child stays illiterate, because then the family may be able to claim a disability check each month.

Lives ruined by dependency?

He then gives an example of the SSI program for kids and how it has ballooned over time .

About four decades ago, most of the children S.S.I. covered had severe physical handicaps or mental retardation that made it difficult for parents to hold jobs — about 1 percent of all poor children. But now 55 percent of the disabilities it covers are fuzzier intellectual disabilities short of mental retardation, where the diagnosis is less clear-cut. More than 1.2 million children across America — a full 8 percent of all low-income children — are now enrolled in S.S.I. as disabled, at an annual cost of more than $9 billion. That is a burden on taxpayers, of course, but it can be even worse for children whose families have a huge stake in their failing in school. Those kids may never recover: a 2009 study found that nearly two-thirds of these children make the transition at age 18 into S.S.I. for the adult disabled. They may never hold a job in their entire lives and are condemned to a life of poverty on the dole — and that’s the outcome of a program intended to fight poverty.

By the way, you won’t be surprised to learn that the disability program for adults also has expanded dramatically. The simple lesson (though folks in Washington seem oblivious) is that if you subsidize self-destructive behavior, you’ll get more of it.

Kristof is honest enough to recognize the problem, but that doesn’t mean he agrees with libertarians about the solution.

I don’t want to suggest that America’s antipoverty programs are a total failure. On the contrary, they are making a significant difference. Nearly all homes here in the Appalachian hill country now have electricity and running water, and people aren’t starving. …kids…have replaced the elderly as the most impoverished age group in our country. Today, 22 percent of children live below the poverty line. Of American families living in poverty today, 8 out of 10 have air-conditioning, and a majority have a washing machine and dryer. Nearly all have microwave ovens. What they don’t have is hope. …A growing body of careful research suggests that the most effective strategy is to work early on children and education, and to try to encourage and sustain marriage. …Early interventions are not a silver bullet, and even programs that succeed as experiments often fall short when scaled up. But we end up paying for poverty one way or another, and early childhood education is far cheaper than adult incarceration. …Look, there are no magic wands, and helping people is hard.

I don’t think his hopes of early childhood education are a silver bullet, particularly if it results in a program run from Washington. But I’ll also admit that libertarians don’t really have a solution.

To a large extent, this is an intergenerational problem, with kids learning bad habits from adults. And that’s true for inner-city blacks and rural whites, as well as every demographic in between. I’m happy to make the case that the welfare state helped to create the problem (or at least subsidized it and made it worse), but simply ending the welfare state probably won’t make everything better.

It’s a lot easier to squeeze the toothpaste out of the tube than to put it back in. Once social capital erodes, it very difficult to restore it. That’s why it’s a mistake to create new programs in the first place. As this famous set of cartoons illustrates, welfare state programs always start small, but that’s not where they end up.

P.S. When the welfare state destroys the lives of children, there’s no room for any humor. But at least we can laugh about the absurdity of disability programs for adults. This joke captures the perverse incentives of the programs, but these real-world horror stories about Diaper Man and Footless Hans are only funny in a twisted way. And this Greek story about rewarding pedophiles with disability payments is beyond satire.

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Government Benefits Encourage Unemployment

It’s not something I should admit since I work at a think tank, which is based on the idea that substantive analysis can impact public policy, but I sometimes think humor and anecdotes are very effective in helping people understand issues.

On the topic of unemployment insurance, for instance, I wouldn’t be surprised to learn that this Michael Ramirez cartoon and this Wizard-of-Id parody have been effective in helping folks grasp the unintended consequences of excessive government benefits.

And I bet this story from Michigan and this example from Ohio will ring a bell with many people because they have some relative or buddy who also has used government benefits as an excuse to stay unemployed.

So when I went on Fox to discuss the issue, I mentioned that I had a couple of friends who goofed off instead of looking for work because they got unemployment benefits.

But since I am a think-tank policy wonk, I also explain that even left-wing economists such as Paul Krugman and Larry Summers agree that subsidizing unemployment means more joblessness. The academic research on this topic is virtually unanimous.

Keep in mind, by the way, that the negative impact of unemployment benefits is just the tip of the welfare-state iceberg. Professor Casey Mulligan has some very good work about the negative impact of redistribution programs, and this chart shows how dependency programs create very high implicit marginal tax rates for the less fortunate.

P.S. My opponent got screwed in terms of airtime, something that I can sympathize with since I’m often the one getting the short end of the stick, even when appearing on overseas television. This previous debate on unemployment insurance, by contrast, was very balanced.

P.P.S. If you want an example of unintentional humor, you can watch Nancy Pelosi asserting that paying people not to work is an effective means of creating jobs.

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How the Welfare State Hurts the Poor and Causes Unemployment

I’ve written about the negative relationship between government spending and economic performance, but most of my focus is on “macro” issues such as the overall diversion of resources from the productive sector to government.

This leads to the misallocation of labor and capital, I’ve explained, which means the economy isn’t as efficient and living standards stagnate.

But, with the exception of some posts about the harmful impact of unemployment insurance (including evidence that Paul Krugman and Larry Summers used to be on the right side before politics clouded their judgment), I’ve rarely explained this story from a “micro” perspective.

Fortunately, Professor Casey Mulligan of the University of Chicago has done some very solid work on this issue, some of which he recently wrote about in the New York Times.

The social safety net became more generous under Presidents George W. Bush and Barack Obama, and as a result massively altered employment patterns in the labor market. …public moneys have recently been used to help the unemployed, the poor and the financially distressed endure the recession, but at the same time have dramatically eroded incentives for people to maintain their own living standards by seeking, accepting and retaining jobs, as well as incentives for employers to create jobs that are attractive to workers.

This makes sense to me. After all, Bush was a reckless big spender, just like Obama. And we also know that if you make work less attractive and idleness more attractive, bad things will happen.

But Prof. Mulligan actually measures the net impact.

As a result of more than a dozen significant changes in subsidy program rules, the average middle-class non-elderly household head or spouse saw her or his marginal tax rate increase from about 40 percent in 2007 to 48 percent only two years later. Marginal tax rates came down in late 2010 and 2011 as provisions of the American Recovery and Reinvestment Act expired, but still remain elevated – at least 44 percent. …A few households even saw their marginal tax rates jump beyond 100 percent – meaning they would have more disposable income by working less. …work incentives were eroded about 20 percent for unmarried household heads…in the middle of the skill distribution, while they were eroded about 12 percent among married heads and spouses…with the same level of skill.

So what’s the bottom line? Well, Prof. Mulligan concludes that government policy hurt everybody, but it did the most damage for those least able to endure hardship, the low-skilled and unmarried.

The fact that marginal tax rates rose so differently for various groups means not only that redistributive public policy depressed the labor market but has also sharply, and arbitrarily, altered the composition of the work force in the direction of people who are married and more skilled.

This final point is worth contemplating for those who are still in post-election-analysis mode. Welfare state programs trap people in dependency. People in that situation naturally worry about who will take care of them, which makes them easily susceptible to snake-oil politicians who promise endless handouts financed by taxes on the so-called rich.

Some otherwise sensible politicians are reluctant to say no when asked to expand the welfare state because they fear it will hurt them at the polls. That’s definitely a possibility, but creating more dependency is a guaranteed way of making it harder to win future elections.

The moral of the story: Big government is bad for the poor.

Second moral of the story: Entitlement reform is good policy…and good politics.

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Obama’s “Freedom” Manifesto and Where It Leads

Other than the famous “riding in the wagon” set, the most-viewed cartoon on this blog is this one about Obama and self-imposed headwinds.

Now we have our first cartoon of the Christmas season!

This isn’t the theme of government as Santa Claus. It is government as Santa Claus.

And where does this approach lead? Well, this Eric Allie cartoon provides a road map.

You can see some previous Allie cartoons here , here, here, here, and here.

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The Full Story of the Corrupting Impact of Government Dependency in Just 3-1/2 Minutes

I’ve put together a video series on the need for entitlement reform and another one on the economics of government spending.

I think that my videos are straightforward and easy to understand, but I’m always open to the possibility that I’m too wonky. After all, normal people may not have the time or interest to endure 20 minutes of Dan Mitchell (perish the thought!).

So perhaps this short cartoon video from the folks at the American Enterprise Institute is a better approach. Sort of Dr. Seuss goes to Greece.

I particularly like illustration of growing dependency, similar to what’s expressed in this famous set of cartoons about riding in the wagon and pulling the wagon.

So feel free to share widely.

P.S. And if like 20-minute doses of Dan Mitchell, here are my video series on the Laffer Curve and tax reform.

P.P.S. Speaking of Dr. Seuss, here’s the story of his trip to Washington.

P.P.S. And if you like DC versions of children’s stories, here’s the PC version of the story about the ant and the grasshopper, as well as the modern fable about bureaucracy, featuring an ant and a lion.

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The Fiscal Burden of the Welfare State: A Picture Says a Thousand Words

I’ve previously shared an amazing chart put together by a Cato colleague showing that massive increases in spending and staff have had no positive impact on educational performance.

Now here’s a chart that is equally remarkable, showing that we spend about $60,000 on various welfare programs for every poor household in America. And what are we getting for that giant expenditure of money? Well, as this other chart shows, our progress in the fight against poverty came to a screeching halt right about the time that the politicians in Washington launched the so-called War on Poverty.

This video contains more analysis, for those who want to learn about the best way of actually reducing poverty. It’s important to remember, after all, that the welfare state has a human cost that is just as important as the fiscal cost.

If you want more powerful pictures and info-graphics, here are some of my favorites.

• Exposing Obama’s miserable jobs performance.
• The importance of saving and investment if we want workers to enjoy higher wages.
• The TSA’s Orwellian (and incompetent) approach to airline security.
• Showing how the burden of government spending has exceeded the growth of the economy’s productive sector.

And I suppose I should share, once again, my favorite poster about government.

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A Dan Mitchell Debate Fantasy

In this modern era where we’re all supposed to share our innermost thoughts, I’ve openly discussed my fantasies.

I confessed to the world, for instance, that I have a fantasy that involves about one-half of the adults in America. And I’ve also admitted to a fantasy involving Gov. Rick Perry of Texas.

Now I’m fantasizing about something new, and it’s all the fault of the Cato Institute. In a violation of the Constitution’s prohibition against cruel and unusual punishment, I have to watch tonight’s presidential debate in order to add my two cents to Cato’s live-blogging of the clash between Obama and Romney.

That got me thinking about some of my least-favorite episodes from past debates, and this moment from 1992 is high on my list (I had to watch that debate because my then-wife worked for the Bush Administration and I had to offer some insincere moral support).

The clip is a bit over three minutes, but it will only take a minute or so to see why this was such an unpleasant segment.

Here’s my latest fantasy. If there’s a similar question tonight, I hope either Romney or Obama gives the following response:

I’m not your daddy and you’re not my child. I’m running to be the President of the United States in order to oversee the legitimate executive branch responsibilities of the federal government. And I hope to reduce the burden of government to give you opportunities, not to take care of your needs. You’re an able-bodied adult. Take responsibility for your own life and provide for your own needs.

But I don’t expect my fantasy to get fulfilled. If a question like this is asked, both Obama and Romney almost surely will express sympathy and support.

The good news is that there have been a few politicians in American’s history who have been willing to say the right thing. Here’s a quote from Barry Goldwater that warms my heart.

I have little interest in streamlining government or in making it more efficient, for I mean to reduce its size. I do not undertake to promote welfare, for I propose to extend freedom. My aim is not to pass laws, but to repeal them. …I will not attempt to discover whether legislation is “needed” before I have first determined whether it is constitutionally permissible. And if I should later be attacked for neglecting my constituents’ “interests,” I shall reply that I was informed that their main interest is liberty and that in that cause I am doing the very best I can.

The bad news is that he got his you-know-what kicked in the 1964 election.

On the other hand, America did elect a President who said during his inauguration that “government is not the solution to our problem, government is the problem.”

And a 2011 poll showed that Americans – unlike their European counterparts – do not believe it is government’s job to guarantee that “nobody is in need.”

In other words, Julia, the fictional moocher woman created by the Obama campaign, is not representative of America. At least not yet.

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The Problem Is Federally Subsidized School Lunches, Not Michelle Obama’s Healthy Food Initiative

Some people are grumbling that the First Lady has taken the joy out of school lunches. She’s identified with the “Healthy, Hunger-Free Kids Act of 2010,” which uses federal funding to coerce schools into providing meals with fewer calories.

Here’s a radical idea for the First Lady. Parents should be responsible for their own kids.

But I think this criticism misses the point. The problem is not overweight kids, as one side argues, or politically correct micro-managing, as the other side claims.

Instead, we should be asking the fundamental question about whether subsidizing school lunches is an appropriate function of the federal government.

I’ve previously argued that the federal government should get out of the business of income redistribution and means-tested programs. In part, this is because the Constitution does not authorize any federal involvement in this area.

But I also think the evidence is very clear that the welfare state is undermining progress in reducing poverty, often by trapping people in lives of dependency.

And it also sometimes brings out the worst in people, as you can see in this horrifying story about a welfare couple in Florida and this sad story about a girl in Connecticut (though England has equally reprehensible examples, as you can see here, here, and here).

Getting back to the main topic of this post, here are some passages from a report in the New York Times.

Outside Pittsburgh, they are proclaiming a strike, taking to Twitter and Facebook to spread the word. In a village near Milwaukee, hundreds staged a boycott. In a small farming and ranching community in western Kansas, they have produced a parody video. And in Parsippany, N.J., the protest is six days old and counting. They are high school students, and their complaint is about lunch — healthier, smaller and more expensive than ever. The Healthy, Hunger-Free Kids Act of 2010, which required public schools to follow new nutritional guidelines this academic year to receive extra federal lunch aid, has created a nationwide version of the age-old parental challenge: persuading children to eat what is good for them.

No big surprise here. Kids want junk food. I’m actually on Michelle Obama’s side on the general issue of wanting kids to eat better and exercise more.

Where we part company is that I think bureaucrats and politicians in Washington are ill-suited to do anything right, and they’re especially unlikely to succeed in a task that has more to do with parents than government.

Here are some details about the meddling from DC.

According to the new restrictions, high school lunches must be no more than 850 calories, middle school lunches no more than 700 calories and elementary school lunches no more than 650. Before, there were no maximums. At the same time, prices have gone up about 10 cents in many districts for students who do not qualify for free lunch, both to pay for fresh fruits and vegetables and to obey a federal requirement that lunch prices gradually increase to help cover their cost. …In New York City, where school officials introduced whole-wheat breads, low-fat milk and other changes several years ago, the most noticeable change this year is the fruit and vegetable requirement, which has resulted in some waste, according to Eric Goldstein, the Education Department official who oversees food services. It is not hard to see why. At Middle School 104 in Gramercy Park on Friday, several seventh graders pronounced vegetables “gross.”

Again, I don’t sympathize with the kids who prefer junk food.

But the federal government’s clumsy efforts to intervene generate nonsense like this.

Few school districts have been as extreme in their efforts as Los Angeles, which introduced a menu of quinoa salads, lentil cutlets, vegetable curry, pad Thai and other vegetarian fare last fall. When students began rejecting the lunches en masse, the district replaced some of the more exotic dishes with more child-friendly foods, like pizza with whole-wheat crust, low-fat cheese and low-sodium sauce. But this year, even the whole-wheat pizza is gone, replaced by calzones, fajitas and other, smaller entrees with side dishes of fruits and vegetables. Nicole Anthony, the cafeteria manager at one Los Angeles school, Nimitz Middle School in Huntington Park, estimated that out of the 1,800 students, almost all of whom qualify for a free or reduced-price lunch, only 1,200, “on a good day,” now eat the cafeteria’s offerings.

At the risk of being politically incorrect, allow me to stress my earlier point that parents should be responsible for raising their kids in general, and feeding them in particular.

P.S. I can’t resist sharing this post about the “Battle of the Bums.”

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America Isn’t (Yet) a Divided Nation of “Makers” and “Takers,” but some on the Left Are Pushing Dependency as a Political Strategy

I’m part of a just-posted online Debate Club sponsored by U.S. News & World Report which asks “Is the United States a Nation of ‘Makers and Takers?’”

My contribution to the discussion is basically a reworked version of what I wrote last week about Romney and the infamous 47 percent remark, so there’s no need to regurgitate those remarks. Suffice to say that I gave an answer of “No” because Americans don’t (yet!) share the European belief that it is government’s responsibility to provide the basics of life.

What’s interesting is that the two other participants in the debate (Phil Kerpen and Scott Winship) who are closest to my views answered “Yes,” while the three leftists sided with me and voted “No.”

But not because the leftists agreed with me on policy, or because I disagreed with Phil or Scott. I think the strange divergence is a result of me being very literal (some would say pedantic) about the question that was asked while the rest of the participants addressed the broader issue of whether there’s too much or too little means-tested redistribution.

So allow me to take a moment to elaborate on my remarks. My answer was driven by my belief that American exceptionalism – limited government, self reliance, and personal responsibility – is still real. I linked above to one poll comparing American and European attitudes, but I also invite you to review very important polling data here and here.

But I’m not under any illusions that this is a permanent feature of the U.S. political landscape. People can be lulled into dependency. Indeed, some leftists are very honest about admitting their desire to turn more and more Americans into wards of the state. Bill Clinton’s pollster wrote a book in the 1990s in which he explicitly acknowledged that part of the debate over Hillarycare was about the degree to which the middle class would have to rely on the federal government.

And a recording of Barack Obama from 1998 has recently surfaced, and it reveals both an ideological and a political desire to expand government dependency. Here’s an excerpt from the Daily Caller.

The Daily Caller has obtained a complete audio recording of the October 19, 1998 Loyola College forum on community organizing and policymaking during which a future President Barack Obama said he favored the government redistribution of wealth. …Obama also said he viewed welfare recipients and “the working poor” as “a majority coalition” that could be mobilized to help advance progressive policies and elect their champions. …The full recording reveals that Obama saw welfare recipients and the working poor in Chicago as a “majority coalition” who could be leveraged politically.“What I think will re-engage people in politics is if we’re doing significant, serious policy work around what I will label the ‘working poor,’” he said… “They are struggling. And to the extent that we are doing research figuring out what kinds of government action would successfully make their lives better, we are then putting together a potential majority coalition to move those agendas forward.”

Set aside the policy arguments here about redistribution undermining progress in the fight against poverty and making it difficult for the less fortunate to climb the economic ladder.

What’s significant is the extent to which Clinton’s pollster and Obama both explicitly talk about redistribution as a political tool. Take money from a minority (i.e., class-warfare tax policy) and give it to enough voters to create a political majority.

I hate to admit it, but the evidence from Europe shows this can be a successful political strategy.

The only downside – as shown in this parable about beer and this great Chuck Asay cartoon – is that the scam only works so long as there are people willing to get fleeced.

I once argued on TV that leftists should be careful not to be too greedy because it doesn’t make sense for parasites to kill their host animals. And Michael Barone made the same point in a more eloquent fashion.

But I think this analysis is flawed. The Greek politicians who created the welfare state were very successful in buying votes. They’re now out of office, either dead or retired with fat pensions, as the house of cards is collapsing.

So if you’re Obama or some other current-day politician (and assuming you don’t care about the future), what’s the downside of expanding the burden of government spending?

P.S. You can vote for who had the best Debate Club argument, so please don’t hesitate to click the up arrow. Presumably thanks to readers of International Liberty, I’ve prevailed in previous debates on double taxation, European fiscal policy, flat tax, Internet taxation, and Obamanomics.

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Why Romney’s Remarks on 47 Percent Dependency Are Wrong, Wrong, and Right

Mitt Romney is catching a lot of flak for his surreptitiously recorded remarks about 47 percent of voters automatically being in the Obama column because they don’t pay federal income tax and thus see themselves as beneficiaries of big government.

Since I’ve warned about dependency and raised the alarm that we risk becoming another Greece unless entitlements are reformed, one might think I agree with the former Massachusetts governor.

Not quite. I think Romney raised an important issue, but he cited the wrong statistic and drew an unwarranted conclusion.

Here’s what I said to Neil Cavuto about the controversy.

To augment on those remarks, here’s where Romney was wrong.

Yes, we have almost half of households not paying federal income tax, and I recognize that there’s a risk on an unhealthy political dynamic if people begin to think they get government for free, but those people are not necessarily looking for freebies from government. Far from it. Many of them have private sector jobs and believe in self reliance and individual responsibility. Or they’re students, retirees, or others who don’t happen to have enough income to pay taxes, but definitely don’t see themselves as wards of the state.

If Romney wanted to be more accurate, he should have cited the share of households receiving goodies from the government. That number also is approaching 50 percent and it probably is much more correlated with the group of people in the country who see the state as a means of living off their fellow citizens. But even that correlation is likely to be very imprecise since some government beneficiaries – such as Social Security recipients – spent their lives in the private sector and are taking benefits simply because they had no choice but to participate in the system.

Moreover, there are some people who pay tax and don’t receive programmatic benefits, yet are part of the proverbial moocher class. Many government bureaucrats obviously would be on that list, as would some union members, trial lawyers, etc.

However, even though Romney picked the wrong statistic and overstated the implications, he indirectly stumbled on a key issue. As seen in both BIS and OECD data, the U.S. is at risk of Greek-style fiscal chaos at some point in the not-too-distant future because of a rising burden of government spending.

I have no idea what share of the population today actually is part of the dependency class that Mitt Romney inarticulately described, but I don’t think I’m going out on limb to say that it has grown during the Bush-Obama years and it will continue to expand.

If we want to maintain American exceptionalism (both in theory and reality), it would be a very good idea to figure out how to avoid having more people trapped in lives of government dependency.

P.S. Here are two amusing cartoons about the dependency mindset, a great Chuck Asay cartoon showing what happens when there’s nothing left to steal, as well as the famous riding-in-the-wagon cartoons produced by a former Cato intern.

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Lucky French Taxpayers: All Hail Francois the Merciful!

I realize it’s wrong, but I can’t help cheering for France’s socialist president. Francois Hollande seems determined to raise every tax, expand every program, and augment every bit of red tape that afflicts the French economy.

“Let them eat cake with the 20 percent I generously allow them to keep”

I fully expect this to end poorly, but at the risk of admitting that I’m chauvinistically concerned first and foremost with the United States, I think it will be helpful to have France as an example of why class-warfare tax policy is a bad idea.

In other words, even though I’m quite fond of many of the French people I’ve met, I’m willing to sacrifice the people of France to save the people of America.

Having explained what’s at stake, now let’s mock Hollande’s latest bright idea. I’ve previously highlighted his support for a 75 percent income tax rate on the so-called rich. Well, he also wants to increase the wealth tax so that the French government arbitrarily seizes as much as 1.8 percent of a household’s assets every year.

Some people – doubtlessly selfish and evil libertarians – have pointed out that the combination of these two levies could result in someone having an annual tax bill equal to 90 percent, 95 percent, or even more than 100 percent of annual income!

But here’s where Monsieur Hollande shows that he is a magnanimous and thoughtful soul. He has decided, out of the kindness of his heart and with generosity of spirit, that no taxpayer will ever have to pay more than 80 percent of their annual income to the government. All hail Francois the Merciful. He puts the Sun King to shame.

Here’s the relevant excerpt from a Tax-news.com report.

The government is therefore planning to restore the ISF tax to the scale that was applied prior to former French President Nicolas Sarkozy’s 2011 reform. Prior to the reform last year, the tax scale comprised six tax rates varying between 0.55% and 1.8%. This compares with the current simplified ISF tax of 0.25% imposed on assets of between EUR1.3m and EUR3m and 0.5% on assets in excess of EUR3m. The government forecasts additional fiscal revenues from the measure of around EUR1.3bn. Given the constraints that it has been working under, the government aims to re-establish a cap of 80% of income, to ensure that taxpayers do not pay more than 80% of their income in ISF, income tax or social contributions.

But there’s one point I don’t understand. Like Vice President Biden, Hollande has asserted that entrepreneurs, investors, small business owners, and other “rich” taxpayers should welcome high tax rates so they can express their patriotism. So why, then, is he limiting their love of government country to 80 percent?

Monsieur Hollande is also boosting the minimum wage, so I guess it will also be patriotic to be unemployed.

And his predecessor, the de facto socialist Sarkozy, also had an interesting way of looking at the world. When he launched an initiative to clamp down on welfare fraud, he wasn’t talking about going after the people who illegitimately mooch off the government. He was targeting taxpayers who objected to paying for the fraud. Those unpatriotic scoundrels!

Just goes to show that Obama will have to try much harder if he wants America to be more statist than France.

P.S. Hollande’s policies already are having an impact. France’s richest person apparently isn’t very “patriotic” and has decided to move where he will be allowed to keep more than 20 percent of his annual income.

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Will American Exceptionalism Be Destroyed by the Entitlement Society?

I wrote a celebratory post last November about the dramatic difference between Americans and Europeans. There truly is American exceptionalism in that Europeans are much more likely to think it is government’s responsibility to provide the basics of life.

Another poll in 2010 showed Americans, by a 20-percentage point margin, want smaller government and lower taxes. A 2011 poll revealed negative views, by an almost 2-1 margin, of the federal government. And it’s not scientific, or even a poll, but I also enjoyed this Mark Steyn column  describing how Americans were the only people in the world to protest for less government when the financial crisis hit.

Perhaps most impressive is this data from late last year showing that Americans overwhelmingly view big government as the greatest threat to the nation’s future.

But self reliance and individualism are not necessarily a permanent part of American DNA, and some left wingers openly argue that they want to create an entitlement mindset.

Based on what’s already happened, Nicholas Eberstadt of the American Enterprise Institute is worried that the narcotic of dependency may be diluting American exceptionalism.

Here are some key passages from Eberstadt’s column, beginning with a look at what makes America special.

From the founding of our nation until quite recently, the U.S. and its citizens were regarded, at home and abroad, as exceptional in a number of deep and important respects. One of these was their fierce and principled independence, which informed not only the design of the political experiment that is the U.S. Constitution but also their approach to everyday affairs. The proud self-reliance that struck Alexis de Tocqueville in his visit to the U.S. in the early 1830s extended to personal finances. The American “individualism” about which he wrote did not exclude social cooperation—the young nation was a hotbed of civic associations and voluntary organizations. But in an environment bursting with opportunity, American men and women viewed themselves as accountable for their own situation through their own achievements—a novel outlook at that time, markedly different from the prevailing attitudes of the Old World (or at least the Continent). The corollaries of this American ethos were, on the one hand, an affinity for personal enterprise and industry and, on the other, a horror of dependency and contempt for anything that smacked of a mendicant mentality. Although many Americans in earlier times were poor, even people in fairly desperate circumstances were known to refuse help or handouts as an affront to their dignity and independence. People who subsisted on public resources were known as “paupers,” and provision for them was a local undertaking. Neither beneficiaries nor recipients held the condition of pauperism in high regard.

That’s the good news. Now for the bad news.

The U.S. is now on the verge of a symbolic threshold: the point at which more than half of all American households receive and accept transfer benefits from the government. From cradle to grave, a treasure chest of government-supplied benefits is there for the taking for every American citizen—and exercising one’s legal rights to these many blandishments is now part of the American way of life. …Citizens have become ever more broad-minded about the propriety of tapping new sources of finance for supporting their appetite for more entitlements. The taker mentality has thus ineluctably gravitated toward taking from a pool of citizens who can offer no resistance to such schemes: the unborn descendants of today’s entitlement-seeking population. …The U.S. is a very wealthy society. If it so chooses, it has vast resources to squander. And internationally, the dollar is still the world’s reserve currency; there remains great scope for financial abuse of that privilege. Such devices might well postpone the day of fiscal judgment: not so the day of reckoning for American character, which may be sacrificed long before the credibility of the U.S. economy. Some would argue that it is an asset already wasting away before our very eyes.

If you think Eberstadt is being needlessly pessimistic, you may change your mind if you read this and this.

To be sure, it’s possible to reverse this trend if we implement entitlement reform. But how likely is that given the short-sighted outlook and self-interested attitude of the political class.

P.S. You can enjoy some cartoons about dependency here, here, and here. If you need some more humor, this cartoon looks at the issue from the government’s perspective, and here’s a great Ramirez cartoon about Julia, a.k.a., the poster child of dependency.

P.P.S. Redistribution is bad for prosperity because you’re paying some people not to produce and you’re penalizing some people who do produce. To get a better idea of how the former kills incentives, look at this amazing chart.

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For Once, I Hope Paul Krugman Is Right

It’s not often that I read something by Paul Krugman and think, “Good point, I hope he’s correct.”

After all, I had to correct Krugman’s inaccurate analysis of Estonia, and also point out the errors in what he wrote about the United Kingdom. And I also noted mistakes he made when writing about Canada and France.

And let’s not forget his absurd assertion that it would be good for the U.S. economy if aliens threatened to attack!

It certainly seems as if he specializes in making mistakes.

But he has just written something that sort of makes sense.

In pushing for draconian cuts in Medicaid, food stamps and other programs that aid the needy, Mr. Ryan isn’t just looking for ways to save money. He’s also, quite explicitly, trying to make life harder for the poor — for their own good. In March, explaining his cuts in aid for the unfortunate, he declared, “We don’t want to turn the safety net into a hammock that lulls able-bodied people into lives of dependency and complacency, that drains them of their will and their incentive to make the most of their lives.”

To be more specific, I hope Krugman is right in that Ryan wants “to make life harder for the poor” if the alternative is to have their lives stripped of meaning by government dependency.  And I agree that it will be “for their own good” if they’re motivated to join the workforce.

To be sure, Krugman wants readers to reach the opposite conclusion. Even though the War on Poverty seems to have put an end to the progress we were making (see this remarkable chart), Krugman equates spending money with compassion.

And I suppose I should point out that he is completely wrong (using dishonest Washington budget math) when writing about “draconian cuts” since Cong. Ryan is merely proposing to slow down how fast government spending is growing.

P.S. For those who want more information, watch this video to learn about how government anti-poverty programs hurt the poor.

P.P.S. Check out this map to see how various U.S. states subsidize poverty.

P.P.P.S. To get your blood boiling, read this horrifying post about how a left-wing international bureaucracy conspiring with the Obama White House to redefine poverty in ways that make America look bad.

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What Happens When Looters and Moochers Outnumber Workers and Producers?

The all-time, most-viewed post on this blog is this set of cartoons showing how the welfare state begins and how it eventually becomes an unsustainable mess.

The great Chuck Asay has a cartoon that takes the next step, showing what happens when the looters and moochers who ride in the wagon get pitted against those who are pulling the wagon.

Since I’m not a Romney fan (for a bunch of reasons outlined here), I would have preferred if the cartoon didn’t imply anything about the current election and instead focused on the rhetorical question of what happens to a society when those living off the government outnumber those who get stuck picking up the tab.

It also would have been more accurate to have the two slave drivers somehow identified as “politicians” and the “IRS.”

But it’s a very clever cartoon, so it’s worth sharing even if I’m nitpicking.

You can see my favorite Asay cartoons here, here, here, here, here, here, here, here, here, here, here, here, here, here, and here.

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A Funny Look at Obama’s You-Didn’t-Build-That Comment

I made a serious point the other day about how government plays a very important role in the lives of entrepreneurs.

But since I was talking about the staggering burden of red tape and regulation, I wasn’t being very supportive of the President’s assertion that government deserves a big chunk of the credit when a business is successful.

This cartoon makes the same point, but adds taxation to the mix.

As far as I recall (I sound like a politician under oath when I write something like that), this is the first Branco cartoon I’ve used, but I think it’s the best one in this post, so I’m looking forward to more of his (her?) work.

Regular readers know about Michael Ramirez, of course, and he has an amusing take on the you-didn’t-build-that controversy.

I’ve used lots of Ramirez cartoons over the past few years, and you can enjoy some of his work here, here, here, here, here, here, here, here, here, here, here, here, here, here, and here.

The Obama campaign has been complaining that the President’s words were misinterpreted, so this Eric Allie cartoon is quite amusing and appropriate.

You can laugh at more Allie cartoons here, here, here, and here.

Fortunately for Obama, he has some allies to help him out, as Lisa Benson reminds us.

More funny Lisa Benson cartoons can be seen here, here, here, here, here, here, here, here, and here.

Last but not least, we have another Allie cartoon. I think this is the first time I’ve used two cartoons by the same person, but I think you’ll agree they’re worth sharing.

This gives me an opportunity to end on a serious note. The Obama campaign is asserting that the President was simply stating that private sector prosperity is made possible by the provision of “public goods” such as roads and bridges.

This is a perfectly fair point, as I explain in this video about the Rahn Curve.

But what Obama conveniently overlooks is that spending on so-called public goods is only about 10 percent of the federal budget. The vast majority of government spending is for unambiguously harmful outlays on transfers, consumption, and entitlements.

Which is why the second Allie cartoon is so good. Even when government does something that is theoretically good, it causes a lot of collateral damage because of the excessive size and scope of the welfare state.

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