Posts tagged welfare
By Michael Snyder
18 Stats That Prove That Government Dependence Has Reached Epidemic Levels
Did you know that the number of Americans getting benefits from the federal government each month exceeds the number of full-time workers in the private sector by more than 60 million? In other words, the number of people that are taking money out of the system is far greater than the number of people that are putting money into the system. And did you know that nearly 70 percent of all of the money that the federal government spends goes toward entitlement and welfare programs? When it comes to the transfer of wealth, nobody does it on a grander scale than the U.S. government. Most of what the government does involves taking money from some people and giving it to other people. In fact, at this point that is the primary function of the federal government.
Just check out the chart below. It comes from the Heritage Foundation, and it shows that 69 percent of all federal money is spent either on entitlements or on welfare programs…
So when people tell you that the main reason why we are being taxed into oblivion is so that we can “build roads” and provide “public services”, they are lying to you. The main reason why the government taxes you so much is so that they can take your money and give it to someone else.
We have become a nation that is completely and totally addicted to government money. The following are 18 stats that prove that government dependence has reached epidemic levels…
#1 According to an analysis of U.S. government numbers conducted by Terrence P. Jeffrey, there are 86 million full-time private sector workers in the United States paying taxes to support the government, and nearly 148 million Americans that are receiving benefits from the government each month. How long can such a lopsided system possibly continue?
#2 Ten years ago, the number of women in the U.S. that had jobs outnumbered the number of women in the U.S. on food stamps by more than a 2 to 1 margin. But now the number of women in the U.S. on food stamps actually exceeds the number of women that have jobs.
#3 The U.S. government has spent an astounding 3.7 trillion dollars on welfare programs over the past five years.
#4 Today, the federal government runs about 80 different “means-tested welfare programs”, and almost all of those programs have experienced substantial growth in recent years.
#5 Back in 1960, the ratio of social welfare benefits to salaries and wages was approximately 10 percent. In the year 2000, the ratio of social welfare benefits to salaries and wages was approximately 21 percent. Today, the ratio of social welfare benefits to salaries and wages is approximately 35 percent.
#6 While Barack Obama has been in the White House, the total number of Americans on food stamps has gone from 32 million to nearly 47 million.
#7 Back in the 1970s, about one out of every 50 Americans was on food stamps. Today, about one out of every 6.5 Americans is on food stamps.
#8 It sounds crazy, but the number of Americans on food stamps now exceeds the entire population of the nation of Spain.
#9 According to one calculation, the number of Americans on food stamps is now greater than the combined populations of “Alaska, Arkansas, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wyoming.”
#10 According to a report from the Center for Immigration Studies, 43 percent of all immigrants that have been in the United States for at least 20 years are still on welfare.
#11 Back in 1965, only one out of every 50 Americans was on Medicaid. Today, more than 70 million Americans are on Medicaid, and it is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.
#12 The number of Americans on Medicare is projected to grow from a little bit more than 50 million today to 73.2 million in 2025.
#13 Medicare is facing unfunded liabilities of more than 38 trillion dollars over the next 75 years. That comes to approximately $328,404 for each and every household in the United States.
#14 If the number of Americans enrolled in the Social Security disability program were gathered into a single state, it would be the 8th largest state in the entire country.
#15 In 1968, there were 51 full-time workers for every American on disability. Today, there are just 13 full-time workers for every American on disability.
#17 Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.
#18 According to the most recent numbers from the U.S. Census Bureau, an all-time record 49.2 percent of all Americans are receiving benefits from at least one government program each month. Back in 1983, less than a third of all Americans lived in a home that received direct monetary benefits from the federal government.
Many will read this and will assume that I am against helping the poor. That is completely and totally not true. There will always be people that are impoverished, and this happens for many reasons. In many cases, people simply lack the capacity to take care of themselves. It is a good thing to take care of such people, whether the money comes from public or private sources. In every society, those that are the most vulnerable need to be looked after.
But it is a very troubling sign that the number of people on government assistance is now far, far greater than the number of people with full-time jobs. This is not a sustainable situation. The federal government is already drowning in debt, and yet more people become dependent on the government with each passing day.
The long-term solution is to get more Americans working or starting their own businesses, but the federal government continues to pursue policies that are absolutely killing the creation of jobs and the creation of small businesses in this country. So our epidemic of government dependence is going to continue to get worse.
And many of these programs are absolutely riddled with fraud and corruption. Just check out the following excerpt from a recent Natural News article…
To understand the extent of this fraudulent waste, go no further than Dr. Salomon Melgen, a Florida ophthalmologist who raked in $20.8 million from Medicare in 2012 alone. Dr. Melgen isn’t the only one bathing in the fraud of this crony government program. Medicare dished out over $1 million to almost 4,000 doctors in 2012, according to the new data release analyzed by The Washington Post.
Jonathan Blum, principal deputy administrator for the Centers for Medicare and Medicaid Services, is calling on the public for help in identifying fraud. He says, “The program is funded by and large by taxpayer dollars. The public has a right to know what it is paying for. We know there is fraud in the system. We are asking for the public’s help to check, to find waste, and to find potential fraud.”
Instead of fixing their own problems, they want us to help them do it.
And of course they always want more of our money to help fund these programs. In fact, according to Americans for Tax Reform, Barack Obama has proposed 442 tax increases since entering the White House…
-79 tax increases for FY 2010
-52 tax increases for FY 2011
-47 tax increases for FY 2012
-34 tax increases for FY 2013
-137 tax increases for FY 2014
-93 tax increases for FY 2015
Perhaps not coincidentally, the Obama budget with the lowest number of proposed tax increases was released during an election year: In February 2012, Obama released his FY 2013 budget, with “only” 34 proposed tax increases. Once safely re-elected, Obama came back with a vengeance, proposing 137 tax increases, a personal record high for the 44th President.
The more we feed the monster, the larger and larger it grows.
And yet poverty is not decreasing. In fact, the poverty rate has been at 15 percent or greater for three years in a row. That is the first time that has happened in decades.
Barack Obama promised to “transform” America, and yet poverty and government dependence have just continued to grow during his presidency.
Not that anyone really believes anything that he has to say at this point. In fact, one recent survey found that only 15 percent of Americans believe that Barack Obama always tells the truth and 37 percent believe that he lies “most of the time”…
A Fox News poll released Wednesday shows that six out of every ten Americans believes that President Barack Obama lies to the American people, at least some of the time. A plurality – 37% – say that he lies “most of the time,” while another 24% say he lies “some of the time.” Another 20% say he lies once in awhile, while only 15% say that he never lies.
So what do you think?
This article first appeared here at the The American Dream. Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.
By Ron Paul
Another Phony Budget Debate
Anyone watching last week’s debate over the Republican budget resolution would have experienced déjà vu, as the debate bore a depressing similarity to those of previous years. Once again, the Republicans claimed their budget would cut spending in a responsible manner, while Democratic opponents claimed the plan’s spending cuts would shred the safety net and leave vital programs unfunded. Of course, neither claim is true.
The budget does not cut spending at all, and in fact actually increases spending by $1.5 trillion over ten years. The Republicans are using the old DC trick of spending less than originally planned and calling that reduced spending increase a $5.1 trillion cut in spending. Only in DC could a budget that increases spending by 3.5 percent per year instead of by 5.2 percent per year be attacked as a “slash-and-burn” plan.
The budget also relies on “dynamic scoring.” This trick is where the budget numbers account for increased government revenue generated by economic growth the budget will supposedly unleash. The claims are dubious at best. Of course, reducing government spending will lead to economic growth. But real growth requires real cuts, not this budget’s phony cuts.
As important as reducing spending and balancing the budget is, focusing solely on budget numbers ignores the root of the problem. The real problem is that too many in Washington — and the nation as a whole — refuse to consider any serious reductions in the welfare-warfare state.
I have always maintained that the logical place to start reducing spending is the trillions wasted on our interventionist foreign policy. Unfortunately, there are still too many in Congress who claim to be fiscal hawks when it comes to welfare spending, but turn into Keynesian “doves” when it comes to spending on the military-industrial complex.
These members cling to the mistaken belief that the government can balance it budget, keep taxes low, and even have a growing economy, while spending trillions of dollars policing the world, and propping up some governments and changing others overtly or covertly. Thus, President Obama is attacked as soft on defense because he only wants to spend $5.9 trillion over ten years on the military. In contrast, the Republican budget spends $6.2 trillion over the next decade. That is almost a trillion more than the budget’s total so-called spending cuts.
If there are too many fiscal conservatives who refuse to abandon the warfare state, there are too many liberals who act as if any reduction in welfare or entitlement spending leaves children starving. I agree it is unrealistic to simply end programs that people are currently dependent on. However, isn’t it inhumane to not take steps to unwind the welfare system before government overspending causes a bigger financial crisis and drags millions more into poverty?
Far from abandoning those in need of help, returning the responsibility for caring for the needy to private charities, churches, and local communities will improve the welfare system. At the very least, young people should have the freedom to choose to pay a lower tax rate in exchange for promising to never participate in a government welfare or entitlement program.
Last week’s budget debate showed how little difference there lies between the parties when it comes to preserving the warfare-welfare state. One side may prefer more warfare while the other prefers more welfare, but neither side actually wants to significantly reduce the size and scope of government. Until Congress stops trying to run the world, run the economy, and run our lives, there will never be a real debate about cutting spending and limiting government.
A First Look at a New Report on Crony Capitalism – Trillions in Corporate Welfare
One of the primary topics on this website since it was launched has been the extremely destructive and explosive rise of crony capitalism throughout the USA. It is crony capitalism, as opposed to free markets, that has led to the gross inequality in American society we have today. Cronyism for the super wealthy starts at the very top with the Federal Reserve System, which consists of topdown economic central planners who manipulate the money supply and hence interest rates for the benefit of the financial oligarch class. It then trickles down through lobbyist money into the halls of Washington D.C., and ultimately filters down to local governments and then the average person on the street gaming welfare or disability.
As such, we now live in a culture of corruption and theft that is pervasive throughout society. One thing that bothers me to no end is when fake Republicans focus their criticism on struggling people who need welfare or food stamps to survive. They have this absurd notion that the whole welfare system doesn’t start with the multinational corporations and Central Banks at the top. In reality, it is at the top where the cancer starts, and that’s where we should focus in order to achieve real change.
That’s where a new report from Open the Books on corporate welfare comes in. In a preview of the publication, the organization notes:
If Republicans are going to get truly serious about cutting government spending, they are going to have to snip the umbilical cord from the Treasury to corporate America. You can’t reform welfare programs for the poor until you’ve gotten Daddy Warbucks off the dole. Voters will insist on that — as well they should.
So why hasn’t it happened? Why hasn’t the GOP pledged to end corporate welfare as we know it?
Part of the explanation is that too many have gotten confused about the difference between free-market capitalism and crony capitalism.
And part of the problem is corporate welfare that is so well hidden from public view in the budget that no one has really measured how big this mountain of giveaway cash to the Fortune 500 really is. Finding out is like trying to break into the CIA.
Until now. Open the Books, an Illinois-based watchdog group, has been scrupulously monitoring all federal grants, loans, direct payments and insurance subsidies flowing to individuals and companies.
It’s an attempt to force federal agencies to release information on where the $4 trillion budget is really spent — and Open the Books will release a new report on corporate welfare payments to the Fortune 100 companies from 2000 to 2012.
Over that period, the 100 received $1.2 trillion in payments from the federal government.
That number does not include the hundreds of billions of dollars in housing, bank and auto company bailouts in 2008 and 2009, because those payments and where they went are kept mostly invisible in the federal agency books.
As suspected, the biggest welfare queens in the U.S. are the super wealthy themselves, but they’d rather you focus on some single mother on welfare simply trying to survive.
I have been trying to track down the full report with no luck as of yet. If I am able to, I will update this post.
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By Ron Paul
Warfare, Welfare, and Wonder Woman — How Congress Spends Your Money
Supporters of warfare, welfare, and Wonder Woman cheered last week as Congress passed a one trillion dollar “omnibus” appropriation bill. This legislation funds the operations of government for the remainder of the fiscal year. Wonder Woman fans can cheer that buried in the bill was a $10,000 grant for a theater program to explore the comic book heroine.
That is just one of the many outrageous projects buried in this 1,582 page bill. The legislation gives the Department of Education more money to continue nationalizing education via “common core.” Also, despite new evidence of Obamacare’s failure emerging on an almost daily basis, the Omnibus bill does nothing to roll back this disastrous law.
Even though the Omnibus bill dramatically increases government spending, it passed with the support of many self-described “fiscal conservatives.” Those wondering why anyone who opposes increasing spending on programs like common core and Obamacare would vote for the bill, may find an answer in the fact that the legislation increases funding for the “Overseas Continuing Operations” — which is the official name for the war budget — for the first time since 2010. This $85 billion war budget contains $6 billion earmarked for projects benefiting Boeing, Lockheed-Martin, and other big defense contractors.
Ever since “sequestration” went into effect at the beginning of last year, the military-industrial complex’s congressional cheering session has complained that sequestration imposed “draconian cuts” on the Pentagon that will “decimate” our military — even though most of the “cuts” were actually reductions in the “projected rate of growth.” In fact, under sequestration, defense spending was to increase by 18 percent over ten years, as opposed to growing by 20 percent without sequestration.
Many of the defenders of increased war spending are opponents of welfare, but they are willing to set aside their opposition to increased welfare spending in order to increase warfare spending. They are supported in this position by the lobbyists for the military-industrial complex and the neoconservatives, whose continued influence on foreign policy is mystifying. After all, the neocons were the major promoters of the disastrous military intervention in Iraq.
While many neocons give lip service to limiting domestic spending, their main priority remains protecting high levels of military spending to maintain an interventionist foreign policy. The influence of the neocons provides intellectual justification for politicians to vote for ever-larger military budgets — and break the campaign promises to vote against increases in spending and debt.
Fortunately, in recent years more Americans have recognized that a constant defense of liberty requires opposing both war and welfare. Many of these Americans, especially the younger ones, have joined the intellectual and political movement in favor of limiting government in all areas. This movement presents the most serious challenge the bipartisan welfare-warfare consensus has faced in generations. Hopefully, the influence of this movement will lead to bipartisan deals cutting both welfare and warfare spending.
The question facing Americans is not whether Congress will ever cut spending. The question is will the spending be reduced in an orderly manner that avoids inflecting massive harm on those depending on government programs, or will spending be slashed in response to an economic crisis caused by ever-increasing levels of deficit spending. Because politicians are followers rather than leaders, it is ultimately up to the people what course we will take. This is why it is vital that those of us who understand the dangerous path we are currently on do all we can to expand the movement for liberty, peace, and prosperity.
By Greg Morin
Welfare, Minimum Wages, and Unemployment
Of the various flavors of government interventionism in our lives, the minimum wage is perhaps the most welcomed. It appeals not only to our innate sense of “fairness” but also to our self-interest. Its allure may erroneously lead us to the conclusion that because “it is popular,” ergo “it is right.”
The more astute proponents of the minimum wage, however, immediately point to the obvious; namely, that an extreme minimum wage ($1,000 per hour) would be unequivocally detrimental. However, the proponents quickly turn to dismissing this fear by asserting that, empirically, no such job loss occurs when the minimum wage is slowly raised. This is akin to arguing that although fire can boil water, a small fire won’t heat it up. The support for this assertion is the oft-cited 1994 study by Card and Krueger showing a positive correlation between an increased minimum wage and employment in New Jersey. Many others have thoroughly debunked this study and it is significant that the original authors eventually retracted their claims.
Youth and Entry-Level Unemployment
The problem with such “studies” that purport to demonstrate only positive and no negative effects from a rising minimum wage is that it is quite easy to count individuals whose pay went up. What is more challenging, if not impossible, is to count the people that would have been hired but were not. Likewise, offsetting reductions in non-monetary compensation will not show up in a monetarily-focused analysis.
However, empirical economic data is not entirely useless. Such data is more suited to qualitative rather than quantitative predictions (who is affected rather than how much they are affected). For example, basic economics predicts that a minimum wage will necessarily increase unemployment among those with the least experience. Indeed, if we look at the empirical evidence we see exactly that. Looking at the data from the Bureau of Labor Statistics we find that the unemployment rate (June 2013) among 16-19 year olds is 24 percent and among 20-24 year olds it is 14 percent. These values far exceed the unemployment rate (6 percent) of those workers with sufficient experience and skills to make them largely immune to minimum wage pay scales, namely 25-54 year olds. People whose productive value is less than the minimum wage are de facto unemployable. They are denied the opportunity to gain experience and skills, and their exclusion from the job market is a net loss to society.
The minimum wage is just another weapon in the arsenal of the misguided progressive trying to “help” the poor. Their mistake in wielding this weapon is in presuming all workers are similarly situated; i.e., that the vast majority of hourly employees earn minimum wage and that they are uniformly composed of heads of households. In fact the opposite is true. Only 2.1 percent of hourly employees earn minimum wage and of that number over half (55 percent) are 16-24 years old.
How Welfare Brings Down the Asking Wage
So, we know that a sizable number of minimum-wage earners are not in need of a wage that can support a household. But what of the minimum-wage earners who are? We are told repeatedly that minimum wage is not a living wage, so why are not more minimum wage earners simply starving to death? In reality workers earn two wages: one from their employer and one from the state. For example, someone making the current full-time minimum wage earns $15,000 per year, but they are also eligible for additional government benefits that bring their total remuneration to approximately $35,000 per year if they are childless, or up to $52,000 year if they have children. In fact, earning more does not necessarily help one wean himself off this state sponsored support. As wages rise assistance can often decline so precipitously that even earning $1 more can mean a loss of thousands of dollars in aid. This creates a disincentive for the worker to improve and earn more; the perverse incentive here is that we are rewarding the very thing we are trying to eliminate (low wages). These wage subsidies serve only to pervert the normal incentives present in an exchange between employer and employee. Both the employer and the employee are aware of the subsidies, so each is willing to offer less and accept less rather than demand more and offer more.
At first blush one might conclude the employer is making out like a bandit. But there is no free lunch — the subsidies have to come from somewhere. Taxes fund these subsidies. So the employer is not necessarily paying less if its taxes fund the very subsidies its employees are receiving. In fact many employers pay more on net. All employers pay taxes, but only some receive the benefit of subsidized wages. This is a net redistribution from one class of company to another. In essence we are forcing high wage companies to pay low wage companies to keep their wages low.
The Minimum Wage Reduces Worker Productivity
So considering that it is established that minimum wage laws and other forms of wage subsidization are detrimental to the stated goal of improving conditions for those regarded as poor, we must address the question perennially proffered by those who believe one’s salvation can only come via the state: “If not the minimum wage, what then can increase wages?” To answer this question we must understand there are only two possible routes to improving our wages/standard of living. The first method is the unethical route of using force (government) to extract what we want.
The second method, however, is what every rational person would be left with were there no state influence corrupting the incentives that drive their decision-making: improve or augment one’s skills so that they align with those skills currently in greater demand.
Self-improvement through education and/or work experience is the answer to the question: how do I earn more? Government sponsored interference in the market that results in fewer people gaining experience can only serve to frustrate one’s ability to engage in self-improvement. Elimination of the minimum wage is a necessary, although insufficient, first step to improving the economic value of the inexperienced or unskilled.
 David Card and Alan B. Krueger, “Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania,”American Economic Review 84, no. 4 (1994): 792. A later book expanded on these results, see David Card and Alan B. Krueger, Myth and Measurement: The New Economics of the Minimum Wage (Princeton: Princeton University Press, 1995).
 David Neumark and William Wascher, “Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Comment,” American Economic Review 90, no. 5 (2000): 1390. Researchers from the Employment Policies Institute also reported finding data errors in the Card and Krueger sample. In one Wendy’s in New Jersey, for example, there were no full-time workers and 30 part-time workers in February 1992. By November 1992, the restaurant had added 35 full-time workers with no change in part-timers. See David R. Henderson, “The Squabble over the Minimum Wage,” Fortune, July 8, 1996, pp. 28ff. Walter Block, “The Minimum Wage Once Again,” Labor Economics from a Free Market Perspective (2008): 147-154. David Card and Alan B. Krueger, “Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Reply,” American Economic Review 90, no. 5 (2000): 1419.
About the Author
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Wow – The Holiday Shopping Season Is Off To A Horrible Start
According to the National Retail Federation, Americans spent an average of 4 percent less over the four day Thanksgiving weekend than they did last year. Overall, that means that approximately $1.7 billion less was spent at U.S. retailers compared to last year. It had already been projected that this holiday shopping season would be the worst for retailers since 2009, but if these numbers are any indication it may be even worse than expected. So why is this happening? Well, basically the American consumer is tapped out. The unemployment crisis in this country is actually getting worse, poverty is absolutely exploding and the middle class is being systematically eviscerated. In other words, you can’t get blood out of a stone. Many retailers are offering extreme discounts in a desperate attempt to lure more shoppers, but the money simply isn’t there.
According to Yahoo News, the decline in shopping over the four day Thanksgiving weekend was the first decline that we have seen since the last recession…
Shoppers, on average, were expected to spend $407.02 during the four days, down 3.9 percent from last year. That would be the first decline since the 2009 holiday shopping season when the economy was just coming out of the recession.
The survey underscores the challenges stores have faced since the recession began in late 2007. Retailers had to offer deeper discounts to get people to shop during the downturn, but Americans still expect those “70 percent off” signs now during the recovery.
And according to the New York Times, Americans spent a total of 1.7 billion dollars less than they did last year…
Over the course of the weekend, consumers spent about $1.7 billion less on holiday shopping than they did the year before, according to the National Retail Federation, a retail trade organization.
“There are some economic challenges that many Americans still face,” said Matthew Shay, the chief executive of the retail federation. “So in general terms, many are intending to be a little bit more conservative with their budgets.”
But this downturn for retailers did not just begin this past weekend. There have been signs of trouble for quite a while now.
For example, posted below is a photo that one of my readers sent to me. This is a photo of the Beverly Center Mall in Beverly Hills, California that was taken in the middle of the day on Tuesday, November 19th. She said that there “wasn’t a soul in that mall and the employees were all standing, staring into space with nothing to do”…
So where are all of the shoppers?
Why aren’t people out buying stuff?
Sadly, this is just the continuation of a trend that has been developing for more than a decade. The truth is that Americans are simply not spending money as rapidly as they used to.
Posted below is a chart that shows that the velocity of M2 in the United States is at an all-time low. In other words, the rate at which money circulates through our economy is frighteningly low and it continues to drop…
As you can see from the chart above, this decline in the velocity of money has been going on since the late 1990s. This is a sign of a very unhealthy economy.
Most Americans know that the U.S. economy is very heavily dependent on consumer spending. But consumers have to make money first in order to spend it. And right now we have a major employment crisis in this country.
Meanwhile, the quality of our jobs continues to decline as well. According to the U.S. Census Bureau, median household income in the United States has fallen for five years in a row, and right now the middle class is taking home a smaller share of the overall income pie than has ever been recorded before.
So should it really be such a surprise that consumers are totally tapped out?
The money simply is not there.
After accounting for inflation, 40 percent of all U.S. workers are currently making less than what a full-time minimum wage worker made back in 1968.
A recent CNN article profiled one of these workers. Carman Iverson is a 28-year-old mother of four that makes minimum wage at McDonald’s. If it was not for government assistance, her and her four children would not be able to survive…
Iverson said she started working in 2012 at $7.25 an hour, and makes $7.35 an hour now after Missouri adjusted the minimum wage. She makes between $400 and $600 a month. Her rent is $650 a month.
When asked how she could pay her rent on those wages, she said she had a landlord who works with her. “I’m kind of on my last little leg, because I’ve been late on rent. I’m actually behind three months in rent.
“Sometimes I can pay it, sometimes I can’t. I get paid twice a month, and both checks go to rent and the rest of it goes to utilities to the point where I don’t have any money left to buy anything for my kids — to buy them clothes, shoes or anything they need.”
She said she manages to feed her four children on $543 worth of food stamps a month.
But instead of fixing things, Barack Obama continues to pursue policies that will kill millions more good jobs. It is absolutely amazing that there are any Americans that still support this guy. For a long list of statistics that show how badly the economy has tanked since Obama entered the White House, please see this article.
You know that things are bad when increasing the number of Americans on food stamps by 15 million is regarded as an “economic accomplishment”. In fact, a message recently posted on the official White House website says that “SNAP is boosting the economy right now” and that high food stamp enrollment is creating lots of jobs…
“SNAP’s effect extends beyond the food on a family’s table–to the grocery stores, truck drivers, warehouses, processing plants and farmers that helped get it there.”
So why don’t we just enroll all Americans in every welfare program?
Wouldn’t that produce an extreme economic boom?
And actually under Obama we are already well on our way. According to the U.S. Census Bureau, 49.2 percent of all Americans are currently receiving benefits from at least one government program, and the federal government has spent an astounding 3.7 trillion dollars on welfare programs over the past five years.
Yes, there will always be poor people that cannot help themselves that will need our assistance.
But most Americans are capable of working if they could just find jobs.
Unfortunately, our jobs are being killed off and wages are going down. The middle class is being systematically destroyed and U.S. consumer spending is drying up.
The horrible start to this holiday shopping season is just the beginning.
Things are going to get much worse than this.
This article first appeared here at the Economic Collapse Blog. Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.
Image credit: http://theeconomiccollapseblog.com
Today’s Wealth Destruction Is Hidden by Government Debt
Still unnoticed by a large part of the population is that we have been living through a period of relative impoverishment. Money has been squandered in welfare spending, bailing out banks or even — as in Europe — of fellow governments. But many people still do not feel the pain.
However, malinvestments have destroyed an immense amount of real wealth. Government spending for welfare programs and military ventures has caused increasing public debts and deficits in the Western world. These debts will never be paid back in real terms.
The welfare-warfare state is the biggest malinvestment today. It does not satisfy the preferences of freely interacting individuals and would be liquidated immediately if it were not continuously propped up by taxpayer money collected under the threat of violence.
Another source of malinvestment has been the business cycle triggered by the credit expansion of the semi-public fractional reserve banking system. After the financial crisis of 2008, malinvestments were only partially liquidated. The investors that had financed the malinvestments such as overextended car producers and mortgage lenders were bailed out by governments; be it directly through capital infusions or indirectly through subsidies and public works. The bursting of the housing bubble caused losses for the banking system, but the banking system did not assume these losses in full because it was bailed out by governments worldwide. Consequently, bad debts were shifted from the private to the public sector, but they did not disappear. In time, new bad debts were created through an increase in public welfare spending such as unemployment benefits and a myriad of “stimulus” programs. Government debt exploded.
In other words, the losses resulting from the malinvestments of the past cycle have been shifted to an important degree onto the balance sheets of governments and their central banks. Neither the original investors, nor bank shareholders, nor bank creditors, nor holders of public debt have assumed these losses. Shifting bad debts around cannot recreate the lost wealth, however, and the debt remains.
To illustrate, let us consider Robinson Crusoe and the younger Friday on their island. Robinson works hard for decades and saves for retirement. He invests in bonds issued by Friday. Friday invests in a project. He starts constructing a fishing boat that will produce enough fish to feed both of them when Robinson retires and stops working.
At retirement Robinson wants to start consuming his capital. He wants to sell his bonds and buy goods (the fish) that Friday produces. But the plan will not work if the capital has been squandered in malinvestments. Friday may be unable to pay back the bonds in real terms, because he simply has consumed Robinson’s savings without working or because the investment project financed with Robinson’s savings has failed.
For instance, imagine that the boat is constructed badly and sinks; or that Friday never builds the boat because he prefers partying. The wealth that Robinson thought to own is simply not there. Of course, for some time Robinson may maintain the illusion that he is wealthy. In fact, he still owns the bonds.
Let us imagine that there is a government with its central bank on the island. To “fix” the situation, the island’s government buys and nationalizes Friday’s failed company (and the sunken boat). Or the government could bail Friday out by transferring money to him through the issuance of new government debt that is bought by the central bank. Friday may then pay back Robinson with newly printed money. Alternatively the central banks may also just print paper money to buy the bonds directly from Robinson. The bad assets (represented by the bonds) are shifted onto the balance sheet of the central bank or the government.
As a consequence, Robinson Crusoe may have the illusion that he is still rich because he owns government bonds, paper money, or the bonds issued by a nationalized or subsidized company. In a similar way, people feel rich today because they own savings accounts, government bonds, mutual funds, or a life insurance policy (with the banks, the funds, and the life insurance companies being heavily invested in government bonds). However, the wealth destruction (the sinking of the boat) cannot be undone. At the end of the day, Robinson cannot eat the bonds, paper, or other entitlements he owns. There is simply no real wealth backing them. No one is actually catching fish, so there will simply not be enough fishes to feed both Robinson and Friday.
Something similar is true today. Many people believe they own real wealth that does not exist. Their capital has been squandered by government malinvestments directly and indirectly. Governments have spent resources in welfare programs and have issued promises for public pension schemes; they have bailed out companies by creating artificial markets, through subsidies or capital injections. Government debt has exploded.
Many people believe the paper wealth they own in the form of government bonds, investment funds, insurance policies, bank deposits, and entitlements will provide them with nice sunset years. However, at retirement they will only be able to consume what is produced by the real economy. But the economy’s real production capacity has been severely distorted and reduced by government intervention. The paper wealth is backed to a great extent by hot air. The ongoing transfer of bad debts onto the balance sheets of governments and central banks cannot undo the destruction of wealth. Savers and pensioners will at some point find out that the real value of their wealth is much less than they expected. In which way, exactly, the illusion will be destroyed remains to be seen.
Philipp Bagus is an associate professor at Universidad Rey Juan Carlos. He is an associate scholar of the Ludwig von Mises Institute and was awarded the 2011 O.P. Alford III Prize in Libertarian Scholarship. He is the author of The Tragedy of the Euro and coauthor of Deep Freeze: Iceland’s Economic Collapse. The Tragedy of the Euro has so far been translated and published in German, French, Slovak, Polish, Italian, Romanian, Finnish, Spanish, Portuguese, British English, Dutch, Brazilian Portuguese, Bulgarian, and Chinese. See his website.
Image credit: https://www.mises.org
Obamacare Is Going To Be The Biggest Expansion Of The Welfare State In U.S. History
Can the U.S. government afford to pay for the health care of 38 million more people? As you will see below, Obamacare is going to be the biggest expansion of the welfare state in U.S. history. It is being projected that a decade from now 17 million Americans will be receiving Obamacare subsidies and an additional 21 million Americans will have been added to the Medicaid rolls. At a time when we are already running trillion dollar deficits, is this really something that the government should be taking on? In addition, it is being projected that bringing millions upon millions of new people into the Medicaid program will also cause enrollment in many other federal welfare programs such as food stamps to surge. Right now, the percentage of Americans that are financially dependent on the U.S. government is already at an all-time high, and Obamacare is going to cause the level of government dependence to go much, much higher. But how much weight can the “safety net” actually carry before it breaks entirely?
Since October 1st, the number of Americans enrolling in Medicaid has surprised many government officials. For example, as USA Today recently reported, the number of Americans signing up for Medicaid is far surpassing the number of Americans signing up for private health insurance policies in many states…
States are reporting far higher enrollment in Medicaid than in private insurance since the Affordable Care Act exchanges opened Oct. 1. In Maryland, for example, the number of newly eligible Medicaid enrollees is more than 25 times the number of people signed up for private coverage.
And there are some Americans that are going to the health care exchanges intending to buy private coverage that are finding out that they are only being given the option to enroll in Medicaid instead. The following example comes from the Wall Street Journal…
The situation sounded absurd, so I asked her to walk me through her application on Washington Healthplanfinder to make sure she wasn’t missing anything. Sitting in New York with my computer, I logged onto the site under her name and entered the information my mother provided over the phone. I fully expected her to realize that she had forgotten some crucial piece of information, like a decimal point in her annual income. We checked and double-checked the information, but the only option still appeared to be Medicaid. She suggested clicking on “Apply for Coverage,” thinking that other options might appear.
Instead, almost mockingly, her “Eligibility Results” came back: “Congratulations, we received and reviewed your application and determined [you] will receive the health care coverage listed below: Washington Apple Health. You will receive a letter telling you which managed care plan you are enrolled with.” Washington Apple Health is the mawkish rebranding of Medicaid in Washington state.
The page lacked a cancel button or any way to opt out of Medicaid. It was done; she was enrolled, and there was nothing to do but click “Next” and then to sign out.
As you read this, there are more than 62 million Americans enrolled in Medicaid right now.
According to Obamacarefacts.com (a pro-Obamacare website), Obamacare could add 21 million more Americans to the Medicaid rolls over the next decade.
And according to a report that came out earlier this month, 17 million Americans will qualify for Obamacare subsidies.
So when you add those numbers together (21 million plus 17 million), you come up with a total of 38 million more people that the government will soon be providing health care for.
And that does not even take into account more than 20 million elderly Americans that will be added to the Medicare program by 2025 as our population rapidly ages.
The government is going to have to find a whole lot of money from somewhere to pay for all of this.
And as I mentioned above, it is being projected that this surge in Medicaid enrollment will also be accompanied by a surge in enrollment in other welfare programs such as food stamps. Just check out the following excerpt from a recent Politico article…
Noting that the Affordable Care Act “could potentially have a profound impact on SNAP participation,” the Agriculture Department announced its plans to study the possible development last week in a document submitted to the Office of Management and Budget for review.
The department says it wants to look into state coordination of SNAP and Medicaid enrollment and renewal, the process for directing Medicaid applicants to SNAP and the number of SNAP applications.
Lawmakers who have advocated for SNAP stressed that the increase in food stamp recipients would result from people who should already have been in the program.
“If people are eligible, they ought to be enrolled in it, so that’s a good thing,” said Rep. Jim McGovern (D-Mass.), a farm bill conferee who has stated that he would not vote for a bill that includes significant cuts to SNAP, in a phone interview with POLITICO.
So we could ultimately end up with millions upon millions more Americans enrolled in food stamps and other major federal welfare programs.
Not that helping the poor is a bad thing. It certainly isn’t.
But at some point if too many people jump on the “safety net” it is going to break.
According to the most recent numbers from the U.S. Census Bureau, 49.2 percent of all Americans are currently receiving benefits from at least one government program each month.
That is nearly half the country.
Most of the people that are receiving these benefits actually need them and would be glad to get off of these programs if they could.
However, without a doubt there are some people out there that are abusing the system.
For example, one welfare recipient recently called into a radio show in Texas and was completely unapologetic about the fact that she planned to stay on welfare for the rest of her life…
While workers out there are preaching morality at people like me living on welfare, can you really blame us?
I get to sit home… I get to go visit my friends all day… I even get to smoke weed…
Me and people that I know that are illegal immigrants that don’t contribute to society, we still gonna get paid.
Our check’s gonna come in the mail every month… and it’s gonna be on time… and we get subsidized housing… we even get presents delivered for our kids on Christmas… Why should I work?
Ya’ll get the benefit of saying “oh, look at me, I’m a better person,” but when ya’ll sit at home behind ya’lls I’m a better person… we the ones gettin’ paid!
So can you really blame us?
You can find a YouTube video of the entire conversation right here.
Once again, the vast majority of Americans on welfare are not like this.
Most Americans would prefer to have a good job or to own a thriving business and be providing for themselves. But as our economy continues to decline, the number of Americans that are able to independently take care of themselves will continue to go down.
Right now, the percentage of Americans that are dependent on the government is already at an all-time high, and Obamacare is going to add tens of millions more Americans to the welfare rolls.
So what does this mean for the future of our country? Please feel free to share what you think by posting a comment below…
This article first appeared here at the The American Dream. Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.
Image credit: http://endoftheamericandream.com
Meet One Of The Victims Of Obama’s “Economic Recovery”
Have you ever cried yourself to sleep because you had no idea how you were going to pay the bills even though you were working as hard as you possibly could? You are about to hear from a single mother that has been there. Her name is Yolanda Vestal and she is another victim of Obama’s “economic recovery”. Yes, things have never been better for the top 0.01 percent of ultra-wealthy Americans that have got millions of dollars invested in the stock market. But for most of the rest of the country, things are very hard right now. At this point, more than 102 million working age Americans do not have a job, and 40 percent of those that are actually working earn less than $20,000 a year in wages. If we actually are experiencing an “economic recovery”, then why is the federal government spending nearly a trillion dollars a year on welfare? And that does not even include entitlement programs such as Social Security and Medicare. We live in a nation where poverty is exploding and the middle class is shrinking with each passing day. But nothing is ever going to get fixed if we all stick our heads in the sand and pretend that everything is “just fine”.
What you are about to read is an open letter to Barack Obama that has gone absolutely viral on the Internet in recent days. It is a letter that a single mother named Yolanda Vestal posted on her Facebook page, and it has really struck a nerve because countless other young parents can clearly identify with what she is going through. The following is the text of her letter…
Dear President Obama,
I wanted to take a moment to say thank you for all you have done and are doing. You see I am a single Mom located in the very small town of Palmer, Texas. I live in a small rental house with my two children. I drive an older car that I pray daily runs just a little longer. I work at a mediocre job bringing home a much lower paycheck than you or your wife could even imagine living on. I have a lot of concerns about the new “Obamacare” along with the taxes being forced on us Americans and debts you are adding to our country. I have a few questions for you Mr. President.
Have you ever struggled to pay your bills? I have.
Have you ever sat and watched your children eat and you eat what was left on their plates when they were done, because there wasn’t enough for you to eat to? I have.
Have you ever had to rob Peter to pay Paul, and it still not be enough? I have.
Have you ever been so sick that you needed to see a doctor and get medicine, but had no health insurance because it was too expensive? I have.
Have you ever had to tell your children no, when they asked for something they needed? I have.
Have you ever patched holes in pants, glued shoes, replaced zippers, because it was cheaper than buying new? I have.
Have you ever had to put an item or two back at the grocery store, because you didn’t have enough money? I have.
Have you ever cried yourself to sleep, because you had no clue how you were going to make ends meet? I have.
My questions could go on and on. I don’t believe you have a clue what Americans are actually going through and honestly, I don’t believe you care. Not everyone lives extravagantly. While your family takes expensive trips that cost more than most of us make in two-four years, there are so many of us that suffer. Yet, you are doing all you can to add to the suffering. I think you are a very selfish and cold hearted man, who does not care what is best for the people he was elected by (not by me) to represent, but more so out for the glory of your name attached to history. So thank you Mr. President, thank you for pushing those of us that are barely staying afloat completely under water and driving America into the ground. You have made your mark in history, as the absolute worst and most hated president of the United States. God have mercy on your soul!
These are the kinds of emotions that millions of American parents are wrestling with on a daily basis. Many of them are working as hard as they possibly can and yet still find themselves unable to adequately provide for their families.
And now that food stamps are being cut back, more of them than ever are going to be forced to turn to food banks for help. The following is what the head of a large food bank in Casper, Wyoming told one local newspaper about the increase in demand that he is witnessing in his area…
Across the state, food banks and other related programs aiming to feed the needy are worried the supply to meet the uptick in need during the holiday season won’t meet the growing demand for food caused by the expiration of SNAP benefits.
“People are scared to death of the lack of food availability,” Martin said.
Martin called Joshua’s Storehouse a reliable barometer for measuring the rate of need in Casper. The number of people using the food bank skyrocketed before the reduction in SNAP, he said.
Fewer than 2,000 people used the food bank in October 2012. Last month 2,500 people went there for help.
And of course this is not just happening in rural areas either. Margarette Purvis, the head of the largest food bank organization in New York City, says that she is anticipating a huge surge in demand and that veterans are being hit particularly hard…
“On this Veterans Day, when we’re waving our flags — I need every New Yorker to know — 40 percent of New York City veterans are relying on soup kitchens and pantries.”
Purvis says that there are 95,000 vets relying on food banks in New York City alone.
That is a lot of people.
And while Barack Obama may trot out a few vets on national holidays and promise that “we will never forget” them, the truth is that most of the time the federal government treats our military veterans like human garbage. If you doubt this, please see my previous article entitled “25 Signs That Military Veterans Are Being Treated Like Absolute Trash Under The Obama Administration“.
Meanwhile, anger and frustration with the economy are starting to rise to very dangerous levels in this nation.
In a previous article, I noted that violent crime in America rose by 15 percent last year. One of the primary reasons for this is the economic despair that we see in our streets.
As the economy gets even worse, people will become even more desperate. We will start to see even more flash mob crimes like we saw in Chicago recently. Posted below is a video news report that shows footage of a flash mob in Chicago dragging entire racks of merchandise out of a Sports Authority store…
When you watch stuff like this, it helps to explain why demand for armored vehicles among the ultra-wealthy in America is skyrocketing.
Unfortunately, most Americans cannot afford armored vehicles and walled vacation homes in the middle of nowhere.
Most Americans are going to have to live right in the middle of all of this as it happens.
A volcano of anger, frustration and despair is simmering just below the surface in America.
When that volcano finally erupts, it is going to be a very frightening thing to behold.
This article first appeared here at the Economic Collapse Blog. Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.
Image credit: http://theeconomiccollapseblog.com
Ron Paul: Obamacare ‘A Conspiracy Of Stupidity’
Dr. Paul isn’t the only medical doctor who is completely fed up with medical central planning. I’ve talked with a few and each one is deeply concerned about how it will impact care.
Image credit: http://www.againstcronycapitalism.org