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Posts Tagged ‘Welfare State’

What are the wisest words ever uttered by an American president?

I’m not going to pretend to know the answer, but there are some options that are high on my list.

I like what Ronald Reagan said about the government’s view of the economy, a quote that I shared just a few days ago.

I also like what the Gipper said about big government during his inauguration in 1981.

Since I’ve asserted that Calvin Coolidge may be the best President of the 20th Century, it behooves me to point out what he said, as cited by Reagan, about shrinking government to save people.

Going back further in time, it’s hard to come up with better advice than these sage thoughts from Thomas Jefferson.

And let’s not forget the principled words of Presidents Madison, Pierce, and Cleveland. Walter Williams has cited their impressive fealty to the Constitution, an approach that is in stark contrast to the behavior of today’s politicians.

Now let’s look at another option in our best-quote contest.

But, first, some background.

What is it that our statist friends want? At the risk of oversimplifying, they think the government should use redistribution to provide basic needs for everyone.

That certainly was the core message of FDR’s so-called second bill of rights.

And it’s certainly the prevailing mindset of most Europeans.

Well, there is a group of Americans – numbering above 2 million – who do have all their basic needs provided by government.

They get their housing from government. They get their food from government. They also get free health care from government. And their clothing as well. And don’t forget free utilities!

Who are these “lucky” folks? Well, these are the people locked up in America’s prisons. So, yes, their needs are provided by government, but the tradeoff is that they don’t have freedom.

And this brings us to a very good quote from General Dwight Eisenhower. Here’s part of what he said to students at Columbia University in 1949.

In these times when we hear so much of security, security, security for everything we do — when so many of us want to be sure that we shall never be cold, or hungry, or out in the rain, or have a leaky roof… I should think that the best example of it would be a man serving a lifetime in a federal prison.

And here’s an image I found online that captures the same spirit, though I confess I don’t know if Ike uttered these specific words (shockingly, not everything you find on the Internet is true!).

But since it echoes the same sentiment as his remarks in 1949, I figure it’s worth sharing.

Now let’s close with an amusing interpretation of Ike’s quote.

I’ve shared many jokes about our political masters.

Here’s one that I got from my mother.

It’s about a possible new “Part G” for Medicare.

Medicare – Part G – Nursing Home Plan

Say you’re an older senior citizen and can no longer take care of
yourself. The government says there’s no Nursing Home care available
for you. So, what do you do? You opt for Part G.

Our plan gives anyone 65 years or older a gun (Part G) and four bullets.
You are allowed to shoot four politicians. This means, of course, that
you’ll be sent to prison where you’ll receive three meals a day, a roof
over your head, central heating & air conditioning, cable TV, library,
and all the Health Care you need. Need new teeth? No problem. Need
glasses? That’s great. Need a hearing aid, new hip, knees, kidney,
lungs, sex change, or heart? They’re all covered.

As an added bonus, your kids can come and visit you at least as often
as they do now!

And, who will be paying for all of this? The same government that just
told you they can’t afford for you to go into a home. And….you can
get rid of 4 useless politicians while you’re at it. And now, because
you’re a prisoner, you don’t have to pay any more income taxes.

Is this a great country or what?

Now that we’ve solved your senior financial planning, enjoy your week.

Though I suppose I should add that this is just a joke and that no actual politicians were harmed in the writing of this post.

After all, there’s no need to shoot these scoundrels. As Instapundit periodically reminds us, tar and feathers are a much more appropriate punishment.

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As shown by this graphic, why are so many people in Maine taking advantage of the food stamp program? As shown by this map, why does Oregon have such a high level of food stamp dependency?

These are just rhetorical questions since I don’t have the answers. But if we can come up with good answers, that could lead to better public policy.

After all, if we want a self-reliant citizenry, it would be better if people were more like those in Nevada and less like the folks in Vermont, at least based on the infamous Moocher Index.

But one thing we can say with certainty is that the food stamp program has morphed into a very expensive form of dependency.

Jason Riley of the Wall Street Journal opines on the importance of reforming this costly entitlement.

Officially known as the Supplemental Nutrition Assistance Program, or SNAP, the food-stamp program has become the country’s fastest-growing means-tested social-welfare program. …Between 2000 and 2013, SNAP caseloads grew to 47.6 million from 17.2 million, and spending grew to $80 billion from $20.6 billion… SNAP participation fell slightly last year, to 46.5 million individuals, as the economy improved, but that still leaves a population the size of Spain’s living in the U.S. on food stamps. …The unprecedented jump in food-stamp use over the past six years has mostly been driven by manufactured demand. The Obama administration has attempted to turn SNAP into a middle-class entitlement by easing eligibility rules and recruiting new food-stamp recipients. …Democrats tend to consider greater government dependence an achievement and use handouts to increase voter support. The president considers European-style welfare states a model for America.

Making America more like Greece, however, is not good news for taxpayers.

But the program also has negative effects on recipients. Contrary to the left’s narrative, we don’t have millions of starving people in America.

…it now operates more like an open-ended income-supplement program that discourages work. Some 56% of SNAP users are in the program for longer than five years, which suggests that the assistance is being used by most recipients as a permanent source of income, not as a temporary safety net. …“Today, instead of hunger, the central nutritional problem facing the poor, indeed all Americans, is not too little food but rather too much—or at least too many calories,” Douglas Besharov, who teaches courses on poverty alleviation at the University of Maryland, told the House Agriculture Committee last month. “Despite this massive increase in overweight and obesity among the poor, federal feeding programs still operate under their nearly half-century-old objective of increasing food consumption.

So why don’t we try to help both taxpayers and low-income Americans by reforming the program, specifically by “block-granting” it to the states?

Uncle Sam picks up almost all of the bill. That means states have little incentive to control costs. Republicans argue that shifting to block grants would not only save money but also encourage states to increase the labor-participation rate of low-income populations. A state that has only so much money to work with is more likely to promote self-sufficiency in the form of employment, job-search and job-training requirements for able-bodied adults on the dole.

Decentralization, Riley explains, worked very well in the 1990s with welfare reform.

…1996 reforms…imposed more stringent time limits and work requirements on welfare recipients enrolled in programs like Temporary Assistance for Needy Families, or TANF. Welfare rolls subsequently plunged. By 2004, caseloads had fallen by 60% overall and by at least 30% in nearly every state. Child poverty, black child poverty and child hunger also decreased, while employment among single mothers rose. This was a welcome outcome for taxpayers, poor people and everyone else—except those politicians with a vested interest in putting government dependence ahead of self-sufficiency to get elected and re-elected.

So kudos to Republicans on Capitol Hill for proposing to put the states in charge of food stamps.

Just like they also deserve applause for working to block-grant the Medicaid program.

This is something that should happen to all mean-tested programs. Once they’re all back at the state level, we’ll get innovation, experimentation, and diversity, all of which will help teach policy makers which approaches are genuinely in the best interests of both taxpayers and poor people (at least the ones seeking to escape dependency).

Though I can’t resist adding one caveat. The ultimate goal should be to phase out the block grants so that states are responsible for both raising and spending the money.

Let’s close with a few real-world horror stories of what we’re getting in exchange for the tens of billions of dollars that are being spent each year for food stamps.

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

P.S. Shifting to another example of government waste, let’s look at the latest example of overspending and mismanagement by the Department of Veterans Affairs.

Nothing, of course, can compare with the horrible outrage of bureaucrats awarding themselves bonuses after putting veterans on secret waiting lists and denying them care.

But having taxpayers pay nearly $300,000 just so a bureaucrat can move from one highly paid job in DC to another highly paid job in Philadelphia should get every American upset. Here are some of the sordid details from a local news report.

Rep. Jeff Miller (R., Fla.), who chairs the House Veterans Affairs Committee, has also raised questions about the salary and “relocation payments” to the new director of the Philadelphia office, Diana Rubens. Rubens, who was a senior executive in the D.C. office when she was tapped in June to take over the troubled Philadelphia branch, received more than $288,000 in relocation expenses. “The government shouldn’t be in the business of doling out hundreds of thousands in cash to extremely well-compensated executives just to move less than three hours down the road,” Miller said. …Under federal regulations, an agency can pay a variety of costs associated with reassigning an employee, including moving, closing costs, and a per-diem allowance for meals and temporary lodging for the employee’s household.

I’m baffled at how somebody could run up such a big bill. Did she use the space shuttle as a moving van?

Did she have to stay six months at a 5-star resort while waiting for her new house to be ready?

Does a per-diem allowance allow three meals a day at the most expensive restaurant in town?

This is either a case of fraud, which is outrageous, or it’s legal, which means it’s an outrageous example of government run amok.

Regardless, it underscores what I wrote back in 2011.

I will never relent in my opposition to tax increases so long as the crowd in Washington is spending money on things that are not appropriate functions of the federal government. …I will also be dogmatic in my fight against higher taxes so long as there is massive waste, fraud, and abuse in federal programs.

Not to mention that we should never allow tax hikes when it’s so simple to balance the budget with modest spending restraint.

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Sweden is an odd country, at least from the perspective of public policy.

On the positive side, it has private Social Security accounts. It has an admirable school choice system. And it was a good role model of spending restraint back in the 1990s.

But on the negative side, Sweden has one of the world’s biggest welfare states. Even after the spending restraint of the 1990s, the public sector consumes about 50 percent of economic output. And that necessitates a punitive tax code.

There’s also a truly perverse fixation on equality. And you won’t be surprised to learn that the government-run healthcare system produces some unpleasant outcomes.

Today, let’s build on our understanding of Sweden by looking at how the country’s welfare state interacts with the immigration system.

Writing for CapX, Nima Sanandaji discusses these issues in his adopted country of Sweden.

Sweden has had an unusually open policy towards refugee and family immigrants. The Swedish Migration Agency estimates that around 105,000 individuals will apply for asylum only this year, corresponding to over one percent of Sweden’s entire population.

This openness is admirable, but is it successful? Are immigrants assimilating and contributing to Sweden’s economy?

Unfortunately, the answer in many cases is no.

…the open attitude towards granting immigrants asylum is not matched by good opportunities on the labor market. An in-depth study by the daily paper Dagens Nyheter shows that many migrants struggle to find decent work even ten years after entering the country. …The median income for the refugees in the group was found to be as low as £880 a month. The family immigrants of refugees earned even less. Ten years after arriving in the country, their median income was merely £360 a month. These very low figures suggest that a large segment of the group is still relying on welfare payments. Dagens Nyheter can show that at least four out of ten refugees ten years after arrival are supported by welfare. The paper acknowledges that this is likely an underestimation.

So what’s the problem? Why are immigrants failing to prosper?

Nima suggests that government policies are the problem, creating perverse incentives for long-term dependency.

To be more specific, the country’s extravagant welfare state acts as flypaper, preventing people from climbing in the ladder of opportunity.

The combination of generous benefits, high taxes and rigid labour regulations reduce the incentives and possibilities to find work. Entrapment in welfare dependency is therefore extensive, in particular amongst immigrants. Studies have previously shown that even highly educated groups of foreign descent struggle to become self-dependent in countries such as Norway and Sweden. …The high-spending model is simply not fit to cope with the challenges of integration.

The part about “highly educated groups” is particularly important since it shows that the welfare trap doesn’t just affect low-skilled immigrants (particularly when high tax rates make productive activity relatively unattractive).

So what’s the moral of the story? Well, the one obvious lesson is that a welfare state is harmful to human progress. It hurts taxpayers, of course, but it also has a harmful impact on recipients.

And when the recipients are immigrants, redistribution is especially perverse since it makes it far less likely that newcomers will be net contributors to a nation.

And that then causes native populations to be less sympathetic to immigration, which in unfortunate since new blood – in the absence of bad government policy – can help boost national prosperity.

Though let’s at least give Sweden credit. I’m not aware that its welfare programs are subsidizing terrorism, which can’t be said for the United Kingdom, Australia, France, or the United States.

P.S. Here’s my favorite factoid about Sweden.

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Bad ideas definitely have the ability to cross borders.

The income tax first appeared in England, on a temporary basis during the Napoleanic wars and then permanently in 1842. It then spread like a cancer to other parts of the world, eventually reaching – and plaguing – the United States starting in 1913.

Government-run Social Security schemes were started by the Germans in 1889 under Chancellor Otto von Bismarck. Similar programs then were adopted elsewhere, including the United States as part of FDR’s misguided New Deal in 1935.

Now we have another example.

I wrote last month about how the State Department’s refugee program is a trainwreck because it is bringing Somalis (many of whom have an anti-Western ideology) to America and trapping them in government dependency with a plethora of handouts (and also creating a breeding ground for terrorists).

Well, our cousins in the United Kingdom also have a refugee program that is similarly counterproductive.

I don’t know which country was dumb enough to first create its program, but the Brits win the prize for subsidizing the most infamous terrorist (and new member of the Moocher Hall of Fame).

Here are some excerpts from a story in the U.K.-based Daily Mail.

Jihadi John and his asylum-seeking family have milked the British benefits system for 20 years, the Mail can reveal today. Housing the Islamic State executioner and his relatives in affluent parts of London has cost taxpayers up to £400,000. One landlord said Mohammed Emwazi’s family were ‘parasites’ and ‘tenants from hell’. Incredibly, they are still believed to be pocketing £40,000 a year in handouts despite there being no sign of them in Britain. …Westminster City Council is still paying the rent on the family’s £600,000 flat even though the rules say housing benefit should normally be stopped after 13 weeks.

So did all these handouts to the Emwazi family turn them into good citizens?

Hardly. One of the kids, Mohammed Emwazi has gone to the Middle East to fight for ISIS and is now infamous at “Jihadi John,” the psychopath that beheads innocent people.

MPs said they were horrified that the child of a family given refugee status, citizenship and benefits had returned the favour by orchestrating the murder of two of its citizens. …In sickening propaganda videos, his son led the beheadings of Britons Alan Henning and David Haines.

But even if Jihadi John hadn’t turned into a nutjob, British taxpayers still got a very bad deal from the Emwazi clan.

The family apparently is still on the dole, continuing an unbroken 20-year tradition of mooching off British taxpayers.

During their time in Britain, neither Jasem nor Ghaneya officially worked. …With a 12-year-old daughter, Hana, they are still believed to be claiming an estimated £7,821 a year in child benefits and child tax credits. That is on top of annual claims of about £23,400 in housing benefit, £678 in council tax support and £5,929 in jobseeker’s allowance.

Looking at this result, logical people might be tempted conclude that it’s time to rethink refugee programs.

Or, at the very least, change the rules that funnel these people into government dependency.

But since many politicians aren’t logical, there are probably British versions of Barack Obama who are urging job training programs or similar nonsense (for a humorous take on that topic, see the cartoons at the bottom of this post).

P.S. Jihadi John featured in one of the most effectively snarky anti-Obama cartoons I’ve ever seen, which is at the end of this post.

P.P.S. Switching to a different topic, I’ve written (some would say ad nauseam) about disproportionately generous pay and benefits for government bureaucrats. Particularly for the gilded class in Washington.

I think the evidence for excessive bureaucratic compensation is ironclad, particularly if you look at “quit rates” by sector.

But now we have yet another piece of evidence that the federal workforce is living on Easy Street. Check out this new polling data from Gallup.

Remember, this is polling data with federal workers describing their own status, not what taxpayers think.

So let’s give 44 percent of bureaucrats credit for honesty, which is ironic because bureaucrats in polls have acknowledged they’re more likely to be dishonest! And lazy as well.

Though the real moral of the story is not compensation. As I explain at the end of this video, the real problem is that many government jobs shouldn’t exist in the first place.

P.P.P.S. If you want to enjoy bureaucrat humor, click here, here, here, here, here, here, here, here, here, and here.

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Since I’m in the United Kingdom, it’s appropriate to announce that another Briton has been elected to the Moocher Hall of Fame.

Ms. Kay Bird deserves this “honor” because it takes a very reprehensible entitlement mentality to brag about taking a global holiday with welfare cash.

And we’re talking about a global holiday that appears to be far more extravagant than the foreign trips enjoyed by Natalija, another member of the Moocher Hall of Fame.

Here are some of the jaw-dropping details from a report in the U.K.-based Daily Mail.

A single mother on benefits has admitted spending £3,000 of taxpayers’ cash on a dream round-the-world trip to far flung destinations with her 10-month-old baby daughter. ...she still receives more than £8,500 a year in child benefit, income support and tax credits as it is considered that she has a low income. …she visited places such as Australia, Bali and Dubai. Miss Bird says she could work but chooses not to… She said: ‘No, I don’t need the money as such and I didn’t need to go travelling either but I wanted to so I did. ‘If someone’s offering you free money and telling you to take it, you’d have to be a fool not to – that’s all I did. …‘I don’t feel guilty and I don’t regret it. It started off just as a ­holiday to Athens, then things started to fall into place.

Let’s think through her statement about “free money.” Is she really so clueless that she doesn’t realize that her handouts are only possible because other people are actually working and producing?

She says “I don’t feel guilty,” which is remarkable because I doubt taxpayers who financed her jaunt have ever been to Dubai and Bali.

‘Each time some more money landed in my account, I booked something. ‘I started booking flights and accommodation in Europe in October and was booking something with every payment until a few days before I went.’ …She also visited Athens, Istanbul, Dubai, Colombo in Sri Lanka, Kuala Lumpur, Jakarta, Bali and Darwin before returning home via Amsterdam. In total, she spent four months worth of her benefits cash on the trip, paying for 13 flights, travel visas, accommodation and spending money. Her benefits continued to be paid into her bank account while she was away and she returned to the UK just before the five-week travel limit imposed on people claiming Jobseekers’ Allowance.

I have to confess that I’m mystified how someone who chooses not to work can get a handout called “jobseekers’ allowance.” I wonder if MHoF members Danny and Gina are benefiting from the same scam?

In any event, the bureaucrats seem more concerned with enabling welfare fraud than in protecting the interests of taxpayers.

She added: ‘I went to the job centre and told them I wanted to go travelling and they told me there was a five-week limit. I came home just within those five weeks so my benefits didn’t get cut off.’ …she was claiming £90 a week income support, £90 a month child benefit and £230 a month in tax credits. She said: ‘I told them I wanted to register back in the country and they told me I was already eligible for Jobseekers’ Allowance. ‘Then a couple of weeks later they said I could switch to income support which meant I didn’t even have to apply for jobs. ‘Then I was told I could get tax credits, too. I was really shocked at how generous it was but I wasn’t going to turn it down.’

I’m sure British taxpayers will be delighted to learn that Ms. Bird is already planning her next welfare-financed overseas holiday.

Now she says she is planning her next luxury trip for herself and daughter which will be to New Zealand. …She explained: ‘I’m not your regular single mum on benefits who spends it all in McDonald’s and never leaves the town they were born in. ‘I’m changing the image of what it is to be a benefits mum and proving that if you do it the right way, you can have ­anything you want. …’Of course people are negative and many people get very jealous. ‘But I had only been out of Europe once before I went on benefits and now I’ve had the chance to see some incredible things from tropical beaches to the ­skyscrapers of Dubai. ‘I never would have been able to afford it without benefits.’

Gee, doesn’t that warm your heart. She’s a trailblazer, showing other deadbeats how you can live like a jet-setter with other people paying the bills!

Yes, Ms. Bird definitely deserves to be in the Moocher Hal of Fame.

P.S. Since we’re talking about reprehensible welfare moochers, let’s shift from the U.K. to Australia.

It appears that there are lots of Aussie Muslims who want to join the “Terror Wing” of the Moocher Hall of Fame.

Here are some excerpts in a story from the Aussie-based Daily Telegraph.

A federal investigation into the welfare status of Australian foreign fighters, prompted last year by revelations in The Telegraph, shows 96 per cent had been on welfare benefits when they fled to the Middle East. Most had continued to collect payments from Australian taxpayers while training with Islamic State to become terrorists intent on wanting to kill Australians. The investigation has captured the records of 57 Australians who left the country before October last year to fight with the Islamic State. Of that number 55 have been confirmed to have been on welfare payments.

Wow, 96 percent of the identified terrorists who came from Australia were subsidized by taxpayers.

And there are more welfare-fueled terrorists on the way, perhaps recruited by Abdul, who’s been sponging off Australian taxpayers for about two decades.

Since then, an estimated 50 more Australians have ­illegally travelled to the Middle East to join IS, with most believed to have been claiming some form of benefit. A subsequent audit of this group confirmed that most had been at one time in ­receipt of benefits such as Newstart, sickness, youth and carer’s allowances, as well as the Disability Support Pension.

So let’s summarize. Able-bodied young men who are healthy enough to join a fight in the Middle East somehow were somehow so helpless that they needed welfare handouts to survive in Australia.

In reality, of course, these low-life deadbeats surely were capable of working, but they doubtlessly thought it was wonderful that the people they hate were subsidizing their sloth.

All the more reason why policymakers in all nations should reduce the size of the welfare state.

But it’s equally important to decentralize so that local and regional governments are responsible for redistribution programs. Under such an approach, I suspect we’d be far more likely to see the imposition of standards to preclude mooching by able-bodied adults, whether they’re run-of-the-mill moochers or terrorists-in-training.

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The Obama Administration has already announced a bunch of tax increases that will be part of the President’s soon-to-be-released budget.

But, in a remarkable development, the White House has preemptively thrown in the towel and said that it will no longer pursue a proposed tax hike on 529 plans (IRA-type vehicles that allow parents to save for college education without being double taxed).

It’s obviously good news any time a tax hike is very unpopular, but this victory over Obama’s 529 plan has enormous implications.

Simply stated, it underscores a point I’ve been making for a long time about why opposing all tax hikes – particularly levies on the middle class – is critical if we want to have any chance of reforming and restraining the welfare state.

The Washington Examiner explores this development.

Obama’s abandonment of this relatively minor middle class tax-hike proposal suggests that liberals lack the spine to pursue their own long-term vision for America. …They have supported tax hikes on the wealthy to make deficits a bit smaller, but there are not enough wealthy people in America to fill the gap, nor can they be taxed at a high enough rate to pay for all the entitlement and social spending the Democrats want. Thus, Obama Democrats need large middle class tax hikes to sustain their vision for America’s future. Nothing else will work. And so if Obama is too scared to touch the favorite deductions of the middle class — whether it be the mortgage interest deduction or the 529 plan — then he is too scared to make his own long-term worldview a reality.

In other words, so long as we don’t give Washington any new sources of revenue, the left won’t be able to turn the United States into a European-style welfare state.

Peter Suderman of Reason has a similar assessment. Indeed, the title of his article is “How Obama’s 529 College Tax Plan Debacle Proves the Welfare State is Doomed.”

Here are some relevant passages.

…this is the sort of plan than inevitably follows from the long-term fiscal logic of the welfare state. …the existing welfare state is unaffordable. Either it will have to be cut, or reformed, or paid for—by someone, somehow. The administration and its allies would like to reassure you that the someones who will pay for all of this will be limited to the richest of the rich, but in practice there’s only so much money that can be squeezed out of the extremely wealthy. Which means that eventually, anyone looking for ways to keep the welfare state afloat will have to go after the middle class.

Writing for The Federalist, Robert Tracinski echoes these sentiments.

…this is a desperate move by those who need to finance ever bigger government and are simply going where the money is: the vast American middle class. …There have already been trial balloons about raiding 401(k)s and IRAs. The truly committed leftist looks upon our private savings as a vast reserve of capital unfairly withheld from its proper function of servicing the needs of the state.

By the way, just in case you think Tracinski is exaggerating, just look at how governments in nations such as Poland and Argentina have seized private pension assets.

Returning to the topic at hand, here’s some of what Megan McArdle wrote for Bloomberg.

…the administration has started scraping the bottom of the barrel when seeking out money to fund new programs. …We are simply running out of room to pay for generous new programs with higher taxes on the small handful of people who make many hundreds of thousands of dollars a year. I’m not saying that it’s impossible, politically or otherwise, to further raise their tax rates. I’m just saying that there’s not all that much money there left to get. …politicians will need to reach further down the income ladder in order to fund new spending — indeed, to fund the spending we’ve already done, in the form of entitlement promises. Where will they go for that money? Once you’ve hit your fiscal capacity to tax the rich,  a few big sources of tax revenue are left: 1) A value-added tax.  …2) Raising income taxes on the middle class. …3) Tax the savings of the middle class.

Last but not least, Ramesh Ponnuru of National Review reiterated his view that the welfare state desperately needs tax money from the middle class.

…everyone who has looked at the budget projections for the next few decades understands that, absent a sudden reduction in Americans’ life expectancy or other shocking development, middle-class -benefits are going to have to be cut, middle-class taxes are going to have to be raised, or both. The war between liberals and conservatives over the future of the welfare state is largely a matter of how much of each will be done. …government cannot realistically make up much of its long-term financing gap by raising taxes on the rich. A tax-heavy solution to that gap will eventually have to rely on much higher taxes on the middle class. That’s how they finance large welfare states in other developed countries. European social democracies don’t generally have much higher taxes on corporations or high earners than the United States. The chief difference between their tax policies and ours is that they levy value-added taxes that hit consumption.

Having cited several astute writers, let’s now draw the appropriate conclusion.

Without question, the moral of the story is that anybody who genuinely and seriously favors limited government should be unalterably opposed to any and all tax hikes.

And if you don’t believe all the folks cited above, perhaps because most of them lean to the right, then maybe you’ll be convinced by the fact that many leftists agree that you can’t finance big government without big tax hikes, particularly on the middle class.

The one big difference is that they want those tax hikes because of their support for bigger government.

Which should be added evidence about the importance of resisting all tax increase. Heck, the no-tax-hike pledge is an IQ test for Republicans.  Those that fail – such as Jeb Bush – should not be promoted to positions where they can cause damage.

Here’s what I wrote about this issue earlier this month. I was commenting on proposals for a new energy tax, but my analysis applies to any scheme for more revenue.

…the left understands very well that their spending agenda requires more revenue. That’s why Obama is relentless in urging more revenue. It’s why the leftists at the Paris-based OECD endlessly urge higher taxes in America (even to the point of arguing that tax-financed redistribution is somehow good for growth). And it’s why the DC establishment is so enamored with “bipartisan” tax-hiking budget deals, which inevitably lead to bigger government and more debt. Honoring the no-tax-hike pledge isn’t a sufficient condition to rein in big government, but it sure is a necessary condition. Amazingly, top Democrats even admit that their top political goal is to seduce Republicans into supporting higher taxes.

Let’s close with some thought experiments.

American needs genuine entitlement reform. But how likely is it that we’ll see the right kind of changes to programs such as Medicare and Medicaid if politicians instead manage to impose a value-added tax? What incentive would they have to do the right thing if they instead have the option of constantly increasing the VAT rate, as we’ve seen in Europe?

Or what are the odds of good Social Security reform if politicians enact some sort of energy tax. Why improve America’s retirement system, after all, if they have a new source of revenue and they have the option of continuously tweaking the rate upwards to prop up the current system?

What are the chances of getting a good spending cap, something akin to the Swiss debt brake, if politicians succeed in getting some sort of financial transactions tax? Why deal with the problem of excessive government if there’s a new revenue source that can be periodically increased.

The left certainly understand that new revenue is necessary for their agenda. But does the right grasp the obvious implications?

This post already is very long, so I’m going to stop here. But those who are interested in more information should check out the postscripts below.

P.S. Some folks argue that Bill Clinton’s 1993 tax hike is “evidence” that higher taxes can lead to deficit reduction rather than higher spending, but Clinton’s own Office of Management and Budget produced data in early 1995 showing that assertion is false.

P.P.S. In my lifetime, there’s been a Democratic President with sensible views on tax policy.

P.P.P.S. It’s theoretically possible to put together a good fiscal deal involving more revenue, but only in the sense that it’s theoretically possible that I’ll be offered a $5-million contract to play for the Yankees next year.

P.P.P.P.S. The only exception to my no-tax-hike views is that I’m willing to allow higher taxes that are targeted solely on people who endorse higher taxes.

P.P.P.P.P.S. It’s nice to see that lots of people now agree with my starve-the-beast hypothesis. Even if some of them (including Republicans!) learn the wrong lesson and endorse higher taxes for the explicit purpose of financing bigger government.

P.P.P.P.P.P.S. Cartoonists have a good understanding of the tax-hike issue.

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There’s a famous quote, commonly  attributed to Alexis de Tocqueville, about the American character.

America is great because America is good. If America ever stops being good, it will stop being great.

What makes this quote so popular (even though Wikipedia says it’s not actually from de Tocqueville) is the instinctive understanding that a society’s success is at least in part driven by the moral character of its people.

And even if the quote is incorrectly attributed, it clearly is something that could have come from de Tocqueville. In his writings, he openly acknowledged that good laws were only part of what’s needed for a successful society.

The best laws cannot make a constitution work in spite of morals; morals can turn the worst laws to advantage.

This is spot on. A nation is far more likely to be successful if people have the right attitudes, what’s variously referred to as social capital, national character, cultural capital, civics, or tradition.

Here’s what I wrote about the topic last year.

…social capital…refers to the attitudes of a country’s people….Do the people of a nation believe in the work ethic? Or would they be comfortable as wards of the state, living off others? Are they motivated by the spirit of self-reliance? Would they be ashamed to go on welfare? Do they think the government is obligated to give them things? The answers to these questions matter a lot because a nation can’t prosper once you reach a tipping point of too many people riding in the wagon and too few people producing.

I fear that many nations, such as France and Greece, have already reached the point of no return. And I’m worried America is on the same path.

That’s the main reason I created the Moocher Hall of Fame. Yes, taxpayers should get outraged how their money is being wasted, but the far bigger problem is the mentality, present is an ever-growing number of people, that there’s nothing wrong with living off the government.

Sort of as depicted by this Lisa Benson cartoon.

Though it would be more accurate to say that too many people are opting to live off the work of others. After all, the government doesn’t have money to redistribute unless it is taxed or borrowed from those who earned it.

But enough of my amateur commentary, which only scratches the surface of this issue. For those who want deep expertise and knowledge on the topic, I’m delighted (in a very pessimistic and dour sense of the word) to share some excerpts from a superb article in National Affairs by Nicholas Eberstadt, who is a scholar at the American Enterprise Institute.

He starts by explaining that an ever-growing share of the population is receiving handouts and that this pattern is a threat to American exceptionalism.

Asking for, and accepting, purportedly need-based government welfare benefits has become a fact of life for a significant and still growing minority of our population: Every decade, a higher proportion of Americans appear to be habituated to the practice. If the trajectory continues, the coming generation could see the emergence in the United States of means-tested beneficiaries becoming the majority of the population. …nearly half of all children under 18 years of age received means-tested benefits (or lived in homes that did). For this rising cohort of young Americans, reliance on public, need-based entitlement programs is already the norm — here and now. It risks belaboring the obvious to observe that today’s real existing American entitlement state, and the habits — including habits of mind — that it engenders, do not coexist easily with the values and principles, or with the traditions, culture, and styles of life, subsumed under the shorthand of “American exceptionalism.” Especially subversive of that ethos, we might argue, are essentially unconditional and indefinite guarantees of means-tested public largesse.

For those who prefer hard numbers, here is a chart from his article.

There’s so much interested data and analysis in the article, that it’s difficult to choose only a few things to highlight. But these passages are particularly depressing.

The corrosive nature of mass dependence on entitlements is evident from the nature of the pathologies so closely associated with its spread. Two of the most pernicious of them are so tightly intertwined as to be inseparable: the breakdown of the pre-existing American family structure and the dramatic decrease in participation in work among working-age men. When the “War on Poverty” was launched in 1964, 7% of children were born outside of marriage; by 2012, that number had grown to an astounding 41%, and nearly a quarter of all American children under the age of 18 were living with a single mother. …As for men of parenting age, a steadily rising share has been opting out of the labor force altogether. Between 1964 and early 2014, the fraction of civilian men between the ages of 25 and 34 who were neither working nor looking for work roughly quadrupled, from less than 3% to more than 11%. In 1965, fewer than 5% of American men between 45 and 54 years of age were totally out of the work force; by early 2014, the fraction was almost 15%. …mass gaming of the welfare system appears to be a fact of modern American life. The country’s ballooning “disability” claims attest to this. Disability awards are a key source of financial support for non-working men now, and disability judgments also serve as a gateway to qualifying for a whole assortment of subsidiary welfare benefits. Successful claims by working-age adults against the Social Security Disability Insurance (SSDI) program rose almost six-fold between 1970 and 2012 — and that number does not include claims against other major government disability programs, such as SSI.

Ugh. It’s almost as if this Chip Bok cartoon is becoming a depiction of American reality.

To close, here are some excerpts that put the issue of dependency in broader context.

The burning personal ambition and hunger for success that both domestic and foreign observers have long taken to be distinctively American traits are being undermined and supplanted by the character challenges posed by the entitlement state. The incentive structure of our means-based welfare state invites citizens to accept benefits by showing need, making the criterion for receiving grants demonstrated personal or familial financial failure, which used to be a source of shame. …The entitlement state appears to be degrading standards of citizenship in other ways as well. For example, …The late senator Daniel Patrick Moynihan once wrote, “It cannot too often be stated that the issue of welfare is not what it costs those who provide it, but what it costs those who receive it.” The full tally of those costs must now include the loss of public honesty occasioned by chronic deception to extract unwarranted entitlement benefits from our government…collusive bipartisan support for an ever-larger welfare state is the central fact of politics in our nation’s capital today, as it has been for decades. Until and unless America undergoes some sort of awakening that turns the public against its blandishments, or some sort of forcing financial crisis that suddenly restricts the resources available to it, continued growth of the entitlement state looks very likely in the years immediately ahead.

So what’s the answer to this mess?

Without question, the first step is to get Washington out of the business of imposing a one-size-fits-all system on the country.

Simply stated, take the money in Washington that is spent on all redistribution programs, lump those funds into a block grant, and then turn the money over to the states and give them free rein to decide how best to alleviate poverty without creating discomfort.

Republicans, to their credit, already have proposed that solution for Medicaid. But they need to expand that legislation to other means-tested programs.

The real key to success, though, is slowly but surely phasing out the block grant. It’s good to give states flexibility in spending money, but you won’t get responsible decisions unless states – at some point – are also responsible for raising the money.

In other words, the answer is federalism. And because this means jurisdictional competition, we’re quite likely to get better policy. After all, if crazy states such as California, New York, and Illinois want to impose high tax rates to fund overly generous handout, they’ll quickly learn why that’s a bad idea since productive people will emigrate and welfare recipients will immigrate.

Ideally, state lawmakers will decide that welfare programs should focus on people with genuine material deprivation and not ….

Writing about Eberstadt’s article, George Will highlights the fact that you no longer have to be poor to get freebies from federal anti-poverty programs.

Between 1983 and 2012, the population increased by almost 83 million — and people accepting means-tested benefits increased by 67 million. So, for every 100-person increase in the population there was an 80-person increase in the recipients of means-tested payments. Food stamp recipients increased from 19 million to 51 million — more than the combined populations of 24 states. What has changed? Not the portion of the estimated population below the poverty line (15.2 percent in 1983; 15 percent in 2012). Rather, poverty programs have become untethered from the official designation of poverty: In 2012, more than half the recipients were not classified as poor but accepted being treated as needy.

And as you read that passage, keep in mind that the poverty line in America is well above the average level of income in most parts of the world.

But the left wants to redefine poverty in ways that enable redistribution to people who aren’t poor.

P.S. Here’s a great video on differences between the United State and Europe. And here’s a video that is best described as the result of an affair between Dr. Seuss and a think tanker.

P.P.S. Here’s a superb Chuck Asay cartoon on how government undermines social capital. And here’s a Michael Ramirez cartoon making the same point.

P.P.P.S. If you enjoy satire, here’s a book of left-wing nursery rhymes.

P.P.P.P.S. And if you want to know one of my fantasies (which deals with the entitlement mindset), click here.

P.P.P.P.P.S. Last but not least, here’s the famous set of cartoons showing the rise and (inevitable) fall of the welfare state.

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