News America's aversion to socialism ?

[redsunrise]

Uh? It isn't that 40%-50% of that GDP is wasted, it is rerouted. In a poor country, you redistribute some of the poverty, in a wealthy country, you redistribute some of the wealth. It seems to work for most of Northern Europe. I believe a billionaire spending a million just generates less economic activity than ten thousand people spending a hundred. You just shouldn't tax the whole system to pieces, of course.

You are right that this part of GDP is "rerouted" of sorts: that is, to government spending.

This issue boils down to the alternative:

1. Leave like a third of GDP in economy. Let people spend on their own needs, like healthcare or education or saving for retirement.

2. Collectivize healthcare, education, retirement saving, a part of housing via govt programs. E.g. re retirement everybody pays taxes like FICA for retirement as a worker earlier and gets the income on retirement from payroll tax imposed by govt on current workers.

Well, on paper, 2 is not much worse than 1: on average, govt collects $100 in taxes from you, spends $100 on say healthcare, you get the service worth $100. Not different if you have done that with $100 yourself.

Theoretically equivalent, assuming the same efficiencies and economies in both cases.

Trouble is, if this system worked, Soviet countries would not have bankrupted.

When I was young and naive, I thought we had market economy after communism, and that public finances will be maintained in sound shape. I do not think so anymore.

 

[redsunrise]

I think more conservatives would be OK with many of the (efficiently ran) social assistance programs if they weren't framed in a wealth redistribution, class-war or other types of 'reverse discrimination'. As it stands the default answer from the Democrats for how to fund these programs is 'Tax the rich'. Not tax everyone, but specifically tax the rich.*

Egalitarian measures are too often put in this 'fight the power' way that indicates an entitlement and puts me off to no end. An egalitarian measure should be blind to race and legitimately be there as a safety net for someone in need - not a way of life or the bearer of some alterior motive such as racial preference.

Are there any countries where there is racial diversity and near-perfect equality? What's the current social status of Muslims in France and Scandinavia?


* The tax system favors those with less income by a wide margin. Per the IRS in 2008: "the top 1 percent of taxpayers had an average tax rate of 23.3 percent; the top 10 percent of taxpayers had an average tax rate of 18.7 percent; and the bottom 50 percent of taxpayers had an average tax rate of 2.6 percent" http://www.irs.gov/pub/irs-soi/08inratesharesnap.pdf - most get their 'payroll taxes' back as an asset at some point, so that argument becomes mute. How does President Obama's 'the rich need to pay their fair share' and his capping deductions for the highest earners scheme really fit into these numbers?

I think that CBO's numbers on *effective* tax rates are better, those tax rates including things like capital gains tax, given that how most of wealth growth takes place for the rich. cbo.gov is down at the moment, but I have saved PDF:

Summary Table 1.
Effective Federal Tax Rates, 2003 and 2004


Source: Congressional Budget Office.

Lowest Quintile 4.5
Second Quintile 10.0
Middle Quintile 13.9
Fourth Quintile 17.2
Highest Quintile 25.1

All Quintiles 20.0
Top 10% 26.9
Top 5% 28.5
Top 1% 31.1

Above is "Effective Tax Rate (Percent)", column "All Federal Taxes"

Notes: Income categories are defined by ranking all people by their comprehensive household income adjusted for household
size--that is, divided by the square root of the household's size. (A household consists of the people who share a housing
unit, regardless of their relationships.) Quintiles, or fifths, of the income distribution contain equal numbers of people.
Comprehensive household income equals pretax cash income plus income from other sources. Pretax cash income is
the sum of wages, salaries, self-employment income, rents, taxable and nontaxable interest, dividends, realized capital
gains, cash transfer payments, and retirement benefits plus taxes paid by businesses (corporate income taxes and the
employer's share of Social Security, Medicare, and federal unemployment insurance payroll taxes) and employee contri-
butions to 401(k) retirement plans. Other sources of income include all in-kind benefits (Medicare, Medicaid, employer-
paid health insurance premiums, food stamps, school lunches and breakfasts, housing assistance, and energy assis-
tance). Households with negative income are excluded from the lowest income category but are included in the totals.

 

[redsunrise]

Very inflammatory right-wing site that claims that the SS trust fund has been stolen.

I suggest that you read this.

http://www.ssa.gov/oact/progdata/fundFAQ.html

"
By law, income to the trust funds must be invested, on a daily basis, in securities guaranteed as to both principal and interest by the Federal government. All securities held by the trust funds are "special issues" of the United States Treasury. Such securities are available only to the trust funds.
In the past, the trust funds have held marketable Treasury securities, which are available to the general public. Unlike marketable securities, special issues can be redeemed at any time at face value. Marketable securities are subject to the forces of the open market and may suffer a loss, or enjoy a gain, if sold before maturity. Investment in special issues gives the trust funds the same flexibility as holding cash."

Wonderful. Let's take this on.

1. What happens with cash acquired from payroll taxes is put into "special issue" securities.

My answer: government spends it on current operation. Well, what else could it do with it, really?

2. What happens when "special issue" securities are redeemed?

My answer: it taxes the public or borrows more against the future. There's nothing real to spend or sell, like, say, profitable company shares, or gold, or land, or mineral rights, or oil. The trick is that BOTH Comptroller General claim and SSA page you cited are true: if govt gets payroll tax money, writes $100 special issue bond to itself, spends $100, and redeems the bond later to pay it back, the following thing happens at redemption: govt redemption of special issue bond -> treasury and/or IRS tax the public and/or borrow more to pay $100 back.

That is, technically SSA FAQ is true. Realistically, it just covers the debt, the money that has been spent before.

It would be as if I wrote $100 bond to myself, borrowed from someone else, e.g. Chinese guy $100, spent it now, and in a year from now taxed my brother for $100 to pay the bond back.

The stretch is that sentence:

"Investment in special issues gives the trust funds the same flexibility as holding cash."

That is, if you qualify $100 IOU as investment: well it pays something back, no? Formally, it's investment. In reality, it's just debt.

Honestly, if someone ran and reported commercial company finances this way, they would be in prison in a week.

 

[WhoWee]

First in the interest of full disclosure I am currently unemployed as is my wife. We are both attending college full time and are receiving unemployment as part of retraining programs. She, I, and our 18 month old son (she was laid off the day he was born) are receiving Medicare (this is a step up for me my last job didn't offer insurance). We get subsidised day-care, WIC, heating assistance and food stamps as well.

Last week we purchased around $200 worth of groceries including 2 beautiful semi-boneless rib-eyes at 7.99 a lb (sale price normally 9.99 I think) plus a ton of processed food.

I don't see anything wrong with that. Why, well first of all the total amount that went on the EBT card (food stamps) was $48 (about a third of that was the steaks). My wife spends hours every week researching sales and clipping coupons to get that much savings. She is diabetic so even though the coupons are usually just for name brand processed food she focuses on the healthiest stuff available for us.

That amount doesn't include the bag of fresh produce picked up every week from a local farm we have a seasonal share in. That is paid for monthly half from our EBT account and half from a USDA or Extension Office grant.

Before my wife started couponing we didn't buy good steak and our benefits usually only got us half-way through the month. Now the end of the month is when we splurge and get the stuff that's not on sale. We also just cleaned out our cupboards to donate to the food pantry. Since our benefits didn't cover all our groceries, even when we did splurge it just meant more cash out of our pockets at the end of the month.

Furthermore think about this, most people spend a lot more money at the grocery store then they absolutely need to. So when recession hits one of the first places people cut back is on luxury foods and treats. This makes these products a risky investments for food producers, packagers and retailers. Food stamps are guaranteed grocery sales every month. As such they can take a lot of the volatility out of the food industry. This predictable source of cash flow means that companies can invest in riskier products, build capacity, and keep their prices down in general in both good times and bad. Why do you think food stamps are a USDA program?

Welcome to PF. I'll apologize in advance for questioning your post.

First, I'm not sure why two college students with a new born are on Medicare - you must be in a very unique situation?

Next, while it's your (current) right to purchase $7.99 per pound steak - it might not be the best economic decision for your family. I just went to Aldi's and bought chicken for $.69 per pound - I'll feed my family of 6 several times for $15 and you'll get 1 meal for 2 people from your purchase.

As for your decision to first clean your cupboards and donate to the food bank before shopping - I'll assume you had a good reason for making that decision?

Again, you can spend your Government subsidies anyway you like - your decisions only serve to enforce my argument.

IMO - the Government needs to spend taxpayer funds more wisely. The Government is the single largest consumer of retail food products - and pay retail prices. The Government should be buying meat, vegetables, fruit, and generic foods at a wholesale price (with an additional negotiated handling fee for the distributor) - not branded products at full retail.

 

[MarcoD]

You are right that this part of GDP is "rerouted" of sorts: that is, to government spending.

This issue boils down to the alternative:

1. Leave like a third of GDP in economy. Let people spend on their own needs, like healthcare or education or saving for retirement.

2. Collectivize healthcare, education, retirement saving, a part of housing via govt programs. E.g. re retirement everybody pays taxes like FICA for retirement as a worker earlier and gets the income on retirement from payroll tax imposed by govt on current workers.

Well, on paper, 2 is not much worse than 1: on average, govt collects $100 in taxes from you, spends $100 on say healthcare, you get the service worth $100. Not different if you have done that with $100 yourself.

Theoretically equivalent, assuming the same efficiencies and economies in both cases.

Trouble is, if this system worked, Soviet countries would not have bankrupted.

When I was young and naive, I thought we had market economy after communism, and that public finances will be maintained in sound shape. I do not think so anymore.

The thing is that rerouting the money should translate to better educated, healthier people who have more opportunities and also make use of them - instead of them being kicked out of society. To me, the question is how to achieve an optimum with minimal overhead.

Soviet countries bankrupted because the communist system of planning just doesn't work. If I buy a piece of bread at a bakery, somehow, magically through the capitalist system, some farmer understood that he should produce milk and grain, some person understood that that stuff should be transported, and some person understood that he should bake the bread such that it would be laying there the moment I arrived at the bakery. In this fashion, a capitalist system -despite its flaws- just works better, or more efficient, than a state controlled economy. Communism just never achieved the same efficiency.

I just see a government as something which redistributes wealth to fix some inherent flaws of pure capitalist systems.

I don't understand the current economy of Russia, it just feels to me that it will take time. As your country increases in wealth, more opportunities for the general public should arrise.

(I am also pretty liberal. Sometimes I see things where state sponsoring just went too far. Like child care benefits, if you would take them away people would just earn more [I am a bit undecided on this]. Or mortgage benefits, it just drives the house prices up and means that lots of money is flowing out of my country since people borrow too much international money.)

 

[daveb]

I can't imagine they would approve of food stamps paying for $8.00/pound steak or processed foods.

Holy Moly! Steak is $8.00 a pound! I'm glad I'm vegan.

 

[WhoWee]

Holy Moly! Steak is $8.00 a pound! I'm glad I'm vegan.

To be fair - they only paid $7.99 a pound.

 

[mheslep]

...We get subsidised day-care, WIC, heating assistance and food stamps as well.

Last week we purchased around $200 worth of groceries including 2 beautiful semi-boneless rib-eyes at 7.99 a lb (sale price normally 9.99 I think) plus a ton of processed food.

I don't see anything wrong with that...

You're welcome.

 

[Evo]

Do you feed two adults and a child on that amount because that's more then what we usually spend per person or rather more then what we get and use in food stamps per person and we are really trying to avoid out of poket right now. We eat beans rice and pasta to although my wife has to be careful with the carbs. She won't let me eat ramen or box mac more then a few times a month either. We don't get expensive steak every week but we plan and budget out benefits so that when something goes on sale we can get it without sacrificing somewhere else. Most weeks their is at least one item that we buy that between coupons sales and loyalty cards we are paid to leave the store with. This week I think it's greek yogurt. That would explain the gallon of the stuff in my fridge.

That's one adult, and includes toilet paper, paper towels, personal toiletries, cleaners, dog food, over the counter medications, basically everything except prescription meds. Sometimes it includes clothes and shoes, I get my groceries at Super target and Walmart, so I buy household products, clothing, etc... with my food. Aldi's is for my hard core grocery shopping.

It sounds like you do shop wisely. I just can't ever give myself treats, I've always been a penny pincher, my daughter does the splurging, so that's the only time I get expensive items I love.

 

[maine75man]

Welcome to PF. I'll apologize in advance for questioning your post.

First, I'm not sure why two college students with a new born are on Medicare - you must be in a very unique situation?

We are non-traditional students attending community college full time. We both we're laid off from good jobs during the recession and are in unemployment training programs We can't afford insurance and we qualify(barely) for medicare. I would say based purely on observation at my school that we are not in a particularly unique situation.

Next, while it's your (current) right to purchase $7.99 per pound steak - it might not be the best economic decision for your family. I just went to Aldi's and bought chicken for $.69 per pound - I'll feed my family of 6 several times for $15 and you'll get 1 meal for 2 people from your purchase.

Actually it fed 2.5 people.

But I'm more interested about your chicken was it a whole chicken or something like boneless skinless breasts.We can get whole roasters or fryers for about the price you quoted and we eat them quite often. We usually roast them one night then have the leftovers the next few days in sanwiches and I often make stock out of the bones. Though that's rookie league stuff for us. A better deal is often had if you look out for the flats of bone-in chicken thighs. They never sell to well at my local grocery store. Go in on the right morning and you can usually get them for less then 50 cents a pound with mark down stickers (the stickers the store puts on meat when it start to approach it's sell by date).

Of course those saving are a bit deceptive. About http://posc.tamu.edu/library/extpublications/l-2290.pdf" of a whole bird is inedible and about 12% more is skin and fat (making stock from the bones mitigates that somewhat but that's more about saving flavour than money). That means if you pay $.69 per pound for a whole bird your actually paying about $.99 a pound for meat and fat or about $1.18 per pound for just the meat. The thighs are a little better, the total meat yield out of them is about 66%(So $.76/lb.). Still, if your serious about value shopping you want to look out for boneless cuts that drop to around $1/lb they will often be the better deal.Now with careful shopping we can often get roasts, hamburger, braising cuts, and even shoulder steak like London broil for around $1/lb with markdown tags. Or if your willing to clip coupons and keep your eye out frozen hamburger patties and boneless skinless chicken breasts and other processed meats can be gotten for similar prices.

Of course as long as we're being pedantic might I suggest going meatless for at least one major meal a week. It not only a good financial choice, but it's good for your family's health and the environment. It's also an excellent way to broaden your pallet. I know a terrific recipe for a http://www.npr.org/templates/story/story.php?storyId=102854605" .

As for your decision to first clean your cupboards and donate to the food bank before shopping - I'll assume you had a good reason for making that decision?

Well since I apparently didn't make it clear. When my wife started couponing my family was able to increase the buying power of our government benefits by three to six times what we got out of them beforehand. What used to barely take us halfway through the month now covers the whole month with room to spare. That room to spare, created by my wife's hard work, means that we can occasionally use our benefits for what some might consider luxury purchases. Room to spare also means that we have more food then we really need, so we donate that food to other people who need it more. Is that a good enough reason to clean out my cupboards.

Again, you can spend your Government subsidies anyway you like - your decisions only serve to enforce my argument.

I fail to see how.

IMO - the Government needs to spend taxpayer funds more wisely. The Government is the single largest consumer of retail food products - and pay retail prices. The Government should be buying meat, vegetables, fruit, and generic foods at a wholesale price (with an additional negotiated handling fee for the distributor) - not branded products at full retail.

Well in my opinion such an idea would completely undermine the purpose of the program. As I see it food stamps don't exist to merely feed people they are meant to support people in such a way that the stay a part of the community and economy. Having food stamps act like money means that recipients have to budget their funds, plan their purchases and interact with food retailers just like everybody else. Things merely handing people food wouldn't require and defiantly wouldn't encourage. Those people who have those skills get more benefit out of the program. This in turn provides an incentive to learn those skills

What buying food directly and giving it to people would require is a huge complicated distribution network. Like the retail food distribution network it needs to be capable of managing perishables and non-perishables that have many different storage requirements and getting them to recipients before they spoil.

Plus there is the question of what food to give people. What food do they know how to prepare. What food can they eat. Do they have any special dietary requirements for medical or religious reasons. Yes we even have to worry about what food they would like to eat, because if we boil the program down to the absolute basics of feeding hungry people who can't take care of themselves that is still an important question. I've delivered food for meals on wheels and good tasty food people want to eat saves lives. Admittedly this is just a personal observation that might be a little biased because my mother was the cook at the time.

Also what do you think would happen to the retail food industry if the single largest purchaser of their products decided to take it's business elsewhere? Do you think they might lose money? Might there be some job loss? Is it possible, likely even, that the prices for their remaining consumers might go up?

 

[CAC1001]

Late to this thread, but on that Ron Paul "let the guy die" issue, what should have been pointed out is that in such a system as the example presents where the person can afford health insurance and the system will let you die if you don't have it, then everyone will have purchased health insurance. So it's really in many ways a false argument IMO. A person who can afford it but chooses not to buy it will not exist. The only people who wouldn't purchase health insurance in such an example are people who cannot afford it or who are too mentally ill to know to.

The reason that 30 year-old cited in the example would not have purchased health insurance in the first place is precisely because of how the system is currently set up: you can get away with not buying health insurance but the system will still treat you anyhow, so people abuse the system.

Of course the reality is that we do not live in a world where everyone can afford to purchase health insurance, so the system will treat anyone regardless because there would be no quick way to determine whether a person coming into the hospital without health insurance was lacking it because they were abusing the system (chose not to buy it) or because they legitimately cannot afford it.

 

[CAC1001]

I consider your post to be well-reasoned and well-written--although I fear we are on opposite sides on many issues. I believe that the federal government of today bears little resemblance to the federal government of the late 1700's primarily because the world of today bears little resemblance to the world of that earlier time.

Do you really believe that state militias could have defeated the Axis powers in WWII? Do we really want the right of women (or blacks) to vote to be up to individual states?

At the time of our founding fathers, ripples from local events rarely crossed state lines. Today, a bad decision by a farmer in Iowa can poison people from one corner of the country to the other. Individual states simply do not have the resources to deal with threats that are world-wide in scope. And individual citizens are even more powerless.

We need a large and strong central government for the US to survive and prosper in today's world.

Questions of how large and having what specific powers are always relevant and useful. But let's not just argue about size. If you want a smaller government, then specify the programs you want cut: farm subsidies?, aid to education?, defense?, interstate highways?, and so on. Then, we can argue the merits of those specific programs

I would argue that the central government for modern times needs to be a lot larger than it was in the 19th century, but that does not mean that we need, as a proportion of the GDP, a literally large central government by any means. Look at our current federal government. What are the major budget busters to it? Medicare, Medicaid, and Social Security. So our current federal government really isn't all that large. Defense spending, as a proportion of the federal budget and as a proportion of the GDP, is at a historical low. The welfare state we can reign in in certain ways.

So we really do not need a large, strong central government, just one larger than what we had in the past. Current federal spending amounts to about 27% of the GDP. The rest of the government spending that brings total government spending to around 39% of GDP.

 

[maine75man]

Of course the reality is that we do not live in a world where everyone can afford to purchase health insurance, so the system will treat anyone regardless because there would be no quick way to determine whether a person coming into the hospital without health insurance was lacking it because they were abusing the system (chose not to buy it) or because they legitimately cannot afford it.

We also don't live in a society where it is considered OK to let someone die simply because they made a bad financial decision. Nor do we live in a society where fraud or theft carries the death penalty.

So even if we could put a crystal ball at the entrance of every emergency room so that we could tell you if a patient would pay and if not why, even then truly sick people still wouldn't be stopped at the door. Well that's not completely true people who looked like they might be truly sick wouldn't be stopped their actual health would be unimportant.

Furthermore if your dying and already in the hospital treatment won't stop until you're no longer dying even if they know you can't pay. Sure you may not get the best care and caretakers may try to pass you around like a hot potato, but just letting someone die is still a crime isn't it.

Do people really want to live in a world where their healthcare providers are capable of being that callous let alone allowed or encouraged to be?

Essentially we already have universal healthcare you just have to be extremely sick to use it. This is a problem because I'm guessing extremely sick people are usually extremely expensive to care for. Wouldn't it be cheaper to come up with as system that spends money instead to try to prevent as many of those people as possible from getting so sick.

 

[maine75man]

You're welcome.

Please elaborate

 

[WhoWee]

We are non-traditional students attending community college full time. We both we're laid off from good jobs during the recession and are in unemployment training programs We can't afford insurance and we qualify(barely) for medicare. I would say based purely on observation at my school that we are not in a particularly unique situation.

It's doubtful you and your wife both qualified for Medicare. If both of you (and you've observed other people on campus) have Medicare it would be a unique situation at most schools - recipients attending college is not the norm.

 

[WhoWee]

I agree, attack the fraud, not the people that need it. But what I see, (not necessarily from you) is that people don't want money to go to people that truly need it at all. As if by some miracle these people had the opportunity to become independantly wealthy before they became disabled or reached retirement. Most people don't get enough to live on from social security by the time they retire, it's paid out according to what you put in.

After fraud and abuse, there is a third element of concern - waste.

For this discussion, I define waste as paying too much for a good or service and/or the benefit is not maximized by the recipient.

I'll cite an example. If you Google "wheelchair" - you'll find they are available for purchase under $200. A model like this would not be for all day use - but handy for trips back and forth to the doctor or a store. However, Medicare might pay $30 per month to rent this same equipment (I just reviewed a case where these were the numbers) - label IMO.

This headline sums it up:
http://articles.sun-sentinel.com/2010-11-30/health/fl-waste-watch-medicare-wheelchair-20101126_1_medicare-fee-schedule-wheelchairs

"Medicare admits overpaying for common items like wheelchairs
November 30, 2010|By Sally Kestin, Sun Sentinel
WHAT: Medicare pays $800 to rent a wheelchair that retails for $350"

 

[MarcoD]

Essentially we already have universal healthcare you just have to be extremely sick to use it. This is a problem because I'm guessing extremely sick people are usually extremely expensive to care for. Wouldn't it be cheaper to come up with as system that spends money instead to try to prevent as many of those people as possible from getting so sick.

Healthcare should be 'free,' completely paid by taxes, IMO. The Dutch gave up an essentially 'free' system by privatizing it, now the costs are exploding. Which has a simple explanation, demand/supply just doesn't work in healthcare. The (best) default in healthcare is not to do a lot instead of doing more because of the risks involved with most treatments. [Plus there is the part of what you need to pay for healthcare versus what you're willing to pay for healthcare, the latter usually a lot. IMO, capitalism will just float the prices to what you're willing to pay.]

Demand/supply in healthcare just means that everyone is being treated for illnesses they don't have. A hip operation where a cane would suffice, medicine for ADHD where sports would do better, the supply creates its own demand.

It's a place where capitalism, or a free-market strategy, just doesn't work.

 

[maine75man]

It's doubtful you and your wife both qualified for Medicare. If both of you (and you've observed other people on campus) have Medicare it would be a unique situation at most schools - recipients attending college is not the norm.

Whoops your right we are on medicaid it's confusing cause the version in my state, Maine, uses the 'care' suffix. So it's confusing to remember that Mainecare is part of the Medicaid program.

 

[ThomasT]

I think more conservatives would be OK with many of the (efficiently ran) social assistance programs if they weren't framed in a wealth redistribution, class-war or other types of 'reverse discrimination'.

They are wealth redistribution. How else to frame it?

As it stands the default answer from the Democrats for how to fund these programs is 'Tax the rich'. Not tax everyone, but specifically tax the rich.*

The rich, a rather small percentage of the population, controls a rather large percentage of the wealth. It wouldn't make much sense to increase taxes on the poor, since they're the ones who these programs are intended to help. But keep in mind that, indirectly, these programs help lots of people other than just the recipients of the aid.

Egalitarian measures are too often put in this 'fight the power' way that indicates an entitlement and puts me off to no end.

I agree with you here. There's no need to frame it that way, and these programs intended to help the needy shouldn't be thought of, by anyone, as 'entitlements'.

However, when a society is able to help those in need, then it makes sense to do so, because it doesn't just benefit the needy, but also the many businesses that are peripherally affected. Anectdotally, I made lots of money (as did many others) that I probably wouldn't have made, during a certain period, were it not for the Section 8 aid given to thousands of renters in my area during that period.

An egalitarian measure should be blind to race and legitimately be there as a safety net for someone in need - not a way of life or the bearer of some alterior motive such as racial preference.

Again, I agree with you. And I think that, generally, that's how these programs function. It's just that the situation is that a majority of the needy happen to be racial and ethnic minorities. And, wrt to the OP, the realization of this fact by working, tax paying Americans understandably engenders a certain animosity toward aid programs precisely because so much of the aid is going to racial and ethnic minorities.

* The tax system favors those with less income by a wide margin. Per the IRS in 2008: "the top 1 percent of taxpayers had an average tax rate of 23.3 percent; the top 10 percent of taxpayers had an average tax rate of 18.7 percent; and the bottom 50 percent of taxpayers had an average tax rate of 2.6 percent" http://www.irs.gov/pub/irs-soi/08inratesharesnap.pdf - most get their 'payroll taxes' back as an asset at some point, so that argument becomes mute. How does President Obama's 'the rich need to pay their fair share' and his capping deductions for the highest earners scheme really fit into these numbers?

The way I see it, it isn't really a matter of 'fairness'. The goal is to raise the general standard of living for everyone. The assumption being that everyone benefits from this -- not just the recipients of the aid, but all those individuals and businesses that are peripherally (beneficially) affected by it.

 

[Alfi]

That's one adult, and includes toilet paper, paper towels, personal toiletries, cleaners, dog food, over the counter medications, basically everything except prescription meds. Sometimes it includes clothes and shoes, I get my groceries at Super target and Walmart, so I buy household products, clothing, etc... with my food. Aldi's is for my hard core grocery shopping.

It sounds like you do shop wisely. I just can't ever give myself treats, I've always been a penny pincher, my daughter does the splurging, so that's the only time I get expensive items I love.

that's all very good information ... and I don't care. ( mostly )

Including another life form into your purchases, but not including it into the budget is ... inaccurate. You are feeding two.

? How does the food purchases of families pertain to ...

Re: America's aversion to "socialism"?

 

[WhoWee]

that's all very good information ... and I don't care. ( mostly )

Including another life form into your purchases, but not including it into the budget is ... inaccurate. You are feeding two.

? How does the food purchases of families pertain to ...

Re: America's aversion to "socialism"?

The discussion started when someone mentioned they bought $7.99/pound steak with their Government benefit check.

 

[mheslep]

Please elaborate

I don't think my tax dollars should be used to buy steaks with food stamps.

I'm fine with a share of my federal tax dollars going to a minimal social safety net, even though I think such action is first the obligation of the local community, i.e. family and neighbors, i.e. me, then the job of the local and state and government, and only last of federal government as it was not created for that purpose. I observe that the more remote the donor and recipient, so too the age old concepts of altruism and gratitude.

There are now some http://blogs.wsj.com/economics/2011/02/02/some-43-million-americans-use-food-stamps/" people in the US on food stamps, including lottery winners who make similar statements that they see nothing wrong with continuing on food stamps. That's unsustainable, and destructive.

 

[ThomasT]

I don't think my tax dollars should be used to buy steaks with food stamps.

Why not? It's food isn't it?

I'm fine with a share of my federal tax dollars going to a minimal social safety net ...

Just enough to keep them locked in poverty and a bit less hungry, eh? But certainly not enough to, say, start a business ... even if they might have a good idea and a good plan.

... even though I think such action is first the obligation of the local community, i.e. family and neighbors, i.e. me, then the job of the local and state and government, and only last of federal government as it was not created for that purpose.

State and local governments don't have the money for it. Neighbors?? Ok, family to a certain extent ... but most people's resources are pretty limited. Not a realistic suggestion. Which leaves the federal government. It created the problem to a large extent, and it's the only entity that has the resources to deal with such a large scale problem.

Nevertheless, I'd agree with you if it weren't for the fact that most of the aid money gets redistributed into the general economy ... which is good for the whole country.

Take that couple hundred billion (whatever it is) out of the general economy and see what happens. Hundreds of thousands, maybe millions, more people out of work. Thousands of businesses, large and small, would be adversely affected.

I observe that the more remote the donor and recipient, so too the age old concepts of altruism and gratitude.

What does that matter? Would you rather have a society with millions more people living in abject poverty? I don't want my area inundated with large numbers of such 'desperados'.

There are now some http://blogs.wsj.com/economics/2011/02/02/some-43-million-americans-use-food-stamps/" people in the US on food stamps, including lottery winners who make similar statements that they see nothing wrong with continuing on food stamps. That's unsustainable, and destructive.

The lottery winners on food stamps is what, one or two people? They'll eventually correct that loophole. I agree that it's absurd that they don't test for assets, but it's not like it's a big problem. My guess is that the vast majority of people getting government aid actually need it. And like I said, it helps the economy.

I'd say that government aid wrt food, housing, monetary assistance, education, etc. is, generally, sustainable and constructive -- but not if the government continues to reinforce outsourcing, offshoreing, immigration of indigent and unskilled people, and other policies which increase the number of US residents who need aid.

There aren't enough jobs in the US for residents of the US who are qualified to do them. It's an increasing problem, and I don't see any reason to believe that the trend will reverse. There's no political will to do the obvious, not necessarily easy but straightforward, fixes. So, the trend is likely to continue, imo.

Cut out all social welfare programs and the US will eventually have the sort of massive street-dwelling and shantytown situations that certain other countries have to deal with ... whether or not the US significantly curtails immigration of poor and technologically unskilled people.

Like it or not, the US has to continue with a certain amount of wealth redistribution.

 

[WhoWee]

Why not? It's food isn't it?

Just enough to keep them locked in poverty and a bit less hungry, eh? But certainly not enough to, say, start a business ... even if they might have a good idea and a good plan.
********
Cut out all social welfare programs and the US will eventually have the sort of massive street-dwelling and shantytown situations that certain other countries have to deal with ... whether or not the US significantly curtails immigration of poor and technologically unskilled people.

Like it or not, the US has to continue with a certain amount of wealth redistribution.

Steak priced at $8.00/pound - when alternative products are available at $1.00 per pound doesn't need to be explained. If anything - steak on welfare is a great way to keep people enslaved to the system - isn't it?

As for cutting out all social welfare programs - and that leading to shantytown situations = STRAWMAN!

 

[ThomasT]

Steak priced at $8.00/pound - when alternative products are available at $1.00 per pound doesn't need to be explained.

$1/lb mystery meat has got to be internally damaging. Steak is good for you. Eating 1 lb of steak instead of 8 lbs of the nasty stuff makes perfect sense to me.

They spent a lot of time couponing so they could select some good food instead of lazily settling for a whole lot of garbage food. Why begrudge them that choice?

If anything - steak on welfare is a great way to keep people enslaved to the system - isn't it?

If that's all they bought with the food stamps, then sure. But that isn't case here.

What primarily keeps people on welfare is being is situations in which they're unable to work, or not being able to find a job, or not being able to get a loan to start a small business ... that sort of thing, imo.

As for cutting out all social welfare programs - and that leading to shantytown situations = STRAWMAN!

I disagree. One of the alternatives being discussed is doing away with welfare programs. I offered my guess as to what that might entail. You can counter with a differing opinion of the risks involved in cutting out welfare if you want to. But calling it a strawman is, I think, a misnomer.

 

[WhoWee]

$1/lb mystery meat has got to be internally damaging. Steak is good for you. Eating 1 lb of steak instead of 8 lbs of the nasty stuff makes perfect sense to me.

I cited a recent purchase of (whole) chickens at $.69 per pound. What "nasty stuff" are you describing?

 

[WhoWee]

One of the alternatives being discussed is doing away with welfare programs.

Are you citing Ron Paul comments?

 

[ThomasT]

I cited a recent purchase of (whole) chickens at $.69 per pound. What "nasty stuff" are you describing?

That's wonderful for you. I'll bet they bought some cheap chicken (as well as other cheaper cuts of beef) also. But they worked the coupon/sales thing to be able to get a couple of steaks. What's the deal with trying to make maine75man feel guilty about doing that? He isn't complaining. They're trying to make the best out of a difficult situation. And if that, for them, entails getting a couple of good steaks once in a while, then I say great, do it.

Now can we drop this and return to discussing the merits of wealth redistribution, and why lots of Americans are opposed to it?

 

[ThomasT]

Are you citing Ron Paul comments?

Not necessarily. It's just a hypothetical, for argument's sake, wrt whether it makes sense for Americans who are against social welfare programs to hold that position -- as an adjunct to exploring, per the OP, the reasons why they hold that position.

(If I recall correctly Paul voted in favor of a Section 8 bill, but is generally opposed to the redistribution of wealth via social welfare programs administered by the federal government.)

 

[WhoWee]

That's wonderful for you. I'll bet they bought some cheap chicken (as well as other cheaper cuts of beef) also.

Actually, I stipulated the chicken came from Aldi's. Last time I checked, they're ranked the largest food retailer in the world - about 9,000 stores - probably have some buying power?
Wiki should be sufficient for this comment.
http://en.wikipedia.org/wiki/Aldi

Aldi's wholesale purchasing power and retail price strategies aside, what is "cheap chicken"?

As for returning to the discussion about wealth redistribution - this conversation is spot on. A purchase of $8.00 per pound steak when $1.00 per pound alternatives are available is a waste of tax payer funds and literally takes food (1 meal of steak instead of 8 meals of chicken) out of the mouth of someone else that could have benefited.

 

[WhoWee]

Not necessarily. It's just a hypothetical, for argument's sake, wrt whether it makes sense for Americans who are against social welfare programs to hold that position -- as an adjunct to exploring, per the OP, the reasons why they hold that position.

(If I recall correctly Paul voted in favor of a Section 8 bill, but is generally opposed to the redistribution of wealth via social welfare programs administered by the federal government.)

Then you can't support this comment?
" One of the alternatives being discussed is doing away with welfare programs."? Another way to describe "just a hypothetical, for argument's sake" - is STRAWMAN!

 

[ThomasT]

As for returning to the discussion about wealth redistribution - this conversation is spot on. A purchase of $8.00 per pound steak when $1.00 per pound alternatives are available is a waste of tax payer funds and literally takes food (1 meal of steak instead of 8 meals of chicken) out of the mouth of someone else that could have benefited.

I don't think that's a valid argument. Recipients are given a certain amount of food stamps to spend on whatever they want to eat. As long as they're not complaining, then what's the problem.

The fact that some would have them selecting cheaper foods than they do has nothing to do with the general consideration of how eradicating or significantly reducing the food stamp program might affect the general economy and the society as a whole.

 

[ThomasT]

Then you can't support this comment?
" One of the alternatives being discussed is doing away with welfare programs."? Another way to describe "just a hypothetical, for argument's sake" - is STRAWMAN!

A straw man is a component of an argument and is an informal fallacy based on misrepresentation of an opponent's position. To "attack a straw man" is to create the illusion of having refuted a proposition by replacing it with a superficially similar yet unequivalent proposition (the "straw man"), and refuting it, without ever having actually refuted the original position.

Thus, straw man argumentation is different from proposing and exploring hypothetical 'what if' scenarios.

 

[WhoWee]

I don't think that's a valid argument. Recipients are given a certain amount of food stamps to spend on whatever they want to eat. As long as they're not complaining, then what's the problem.

The fact that some would have them selecting cheaper foods than they do has nothing to do with the general consideration of how eradicating or significantly reducing the food stamp program might affect the general economy and the society as a whole.

IMO- they are clearly receiving too much in food subsidy if they can justify such a purchase. The excess amounts could be used to help other people. Isn't the goal of any food subsidy program to feed as many people as possible?

 

[WhoWee]

Thus, straw man argumentation is different from proposing and exploring hypothetical 'what if' scenarios.

Please cite the specific post you were responding to prior to stating "One of the alternatives being discussed is doing away with welfare programs".

 

[ThomasT]

IMO- they are clearly receiving too much in food subsidy if they can justify such a purchase.

I don't know what they get. But I think that focusing on a food stamp recipient's purchase of a couple of more expensive cuts of meat is being a bit unnecessarily nitpicky.

The excess amounts could be used to help other people.

The relatively small amount that this might involve would be insignificant, imo. Anyway, how would such oversight be administered? Simply electronically prohibit food stamp recipients from buying quality (and therefore more expensive) foods?

Now, do think that the food stamp program should be discontinued or reduced? If so, then why, and how do you think this might affect the general economy and the people and businesses that might be affected by such actions?

Isn't the goal of any food subsidy program to feed as many people as possible?

As many genuinely needy people as possible. It does that. Doesn't it?

 

[ThomasT]

Please cite the specific post you were responding to prior to stating "One of the alternatives being discussed is doing away with welfare programs".

Eg., most recently, my post #173, which was a reply to mheslep. I've been speculating on what discontinuing or reducing social welfare programs might entail. The (tentative) argument against such actions being that they would significantly negatively affect the US general economy and therefore the US society.

 

[WhoWee]

I don't know what they get. But I think that focusing on a food stamp recipient's purchase of a couple of more expensive cuts of meat is being a bit unnecessarily nitpicky.

The relatively small amount that this might involve would be insignificant, imo. Anyway, how would such oversight be administered? Simply electronically prohibit food stamp recipients from buying quality (and therefore more expensive) foods?

Now, do think that the food stamp program should be discontinued or reduced? If so, then why, and how do you think this might affect the general economy and the people and businesses that might be affected by such actions?

As many genuinely needy people as possible. It does that. Doesn't it?

"Nitpicky"(?) - if you cut $10 from each of 1 million beneficiaries - how many more people could you help feed?

 

[WhoWee]

Eg., most recently, my post #173, which was a reply to mheslep. I've been speculating on what discontinuing or reducing social welfare programs might entail. The (tentative) argument against such actions being that they would significantly negatively affect the US general economy and therefore the US society.

He didn't suggest that welfare be eliminated - quite the opposite.

"Originally Posted by mheslep
I'm fine with a share of my federal tax dollars going to a minimal social safety net ..."

 

[ThomasT]

"Nitpicky"(?) - if you cut $10 from each of 1 million beneficiaries - how many more people could you help feed?

Apparently, the food stamp program is already helping to feed all the people who need that help. So cutting the benefit amount wouldn't feed more people, it would just give the people who need the help less help.

But, hypothetically, why not cut the benefits in half? Or make the maximum food stamp amount, say, $50/month. They should be able to buy enough rice and beans on that to survive.

 

[ThomasT]

He didn't suggest that welfare be eliminated - quite the opposite.

I didn't say he did. Do you want to explore the possible entailments of some hypothetical wealth redistribution, or lack thereof, scenarios, or not?

Anyway, thanks for the feedback. I've got to go for a while.

 

[mheslep]

Eg., most recently, my post #173, which was a reply to mheslep. ...

I've made no comment about "doing away" with the social safety net, in fact I made a point about keeping it, and how (reduced, more localized). Nor has anyone else in this thread unless I'm mistaken.

 

[Alfi]

they are clearly receiving too much in food subsidy if they can justify such a purchase. The excess amounts could be used to help other people.

hmmmm.
substitute, food subsidy for tax breaks and substitute such a purchase, for personal jets in that sentence.

it would read...
...they are clearly receiving too much in tax breaks if they can justify personal jets. The excess amounts could be used to help other people.

All the talk is about taking from the poor and not taking from the rich.
Even Robin Hood knew better than that.

 

[WhoWee]

hmmmm.
substitute, food subsidy for tax breaks and substitute such a purchase, for personal jets in that sentence.

it would read...
...they are clearly receiving too much in tax breaks if they can justify personal jets. The excess amounts could be used to help other people.

All the talk is about taking from the poor and not taking from the rich.
Even Robin Hood knew better than that.

cute

I don't waste my money (do you?) - why should the Government?

Btw - you do realize that a great many corporate aircraft are actually owned by leasing companies - like GE Capital - and used (paid for) - by the "wealthy"?

 

[AlephZero]

Even Robin Hood knew better than that.

Yeah, but he was a socialist

Looking from the outside, it often seems like the freedom that is most desired in the US is the freedom to treat everybody except oneself like dirt.

 

[WhoWee]

Yeah, but he was a socialist

Looking from the outside, it often seems like the freedom that is most desired in the US is the freedom to treat everybody except oneself like dirt.

Actually, Robin Hood was a thief.

 

[DoggerDan]

Actually, Robin Hood was a thief.

If you recall, so was the Sheriff of Nottingham. He was simply a legal thief, much like some (most?) politicians today who fund programs simply to get reelected rather than for any actual value to the community as a whole.

I don't waste my money (do you?) - why should the Government?

They shouldn't, but they do.

The most interesting idea I hear for limiting government to what's really necessary is to make all taxes voluntary. Another idea simply involves privatizing all governmental functions. I don't see how the latter would be very good for the country, though.

 

[CAC1001]

We also don't live in a society where it is considered OK to let someone die simply because they made a bad financial decision. Nor do we live in a society where fraud or theft carries the death penalty.

So even if we could put a crystal ball at the entrance of every emergency room so that we could tell you if a patient would pay and if not why, even then truly sick people still wouldn't be stopped at the door. Well that's not completely true people who looked like they might be truly sick wouldn't be stopped their actual health would be unimportant.

If we could put a crystal ball at the door of the hospital to determine said things (whether a person lacked health insurance because they chose to abuse the system when they could afford it or because they legitimately can't afford it), then for the most part, everyone who could afford health insurance would purchase it, because the system would be able to prevent anyone from abusing the system. Where people who had chosen, for whatever reason, not to purchase health insurance, I would suggest that the system should still treat them, BUT, then either mandate they purchase it afterwards or hit them with a fine that costs the equivalent (so as to stop any system abuse).

Do people really want to live in a world where their healthcare providers are capable of being that callous let alone allowed or encouraged to be?

Depends I think. I mean that can happen in a universal healthcare system as well, the system will ration and care will be given to those who need it most, subjecting others to waiting times (depends on the system though). Also, we already live in a world where if you don't pay your taxes, the IRS will throw you out of your home and onto the street, where if you can't pay your mortgage, they'll come and repossess your home (again making you homeless), where if you can't pay for your car, they'll repossess that too.

 

[CAC1001]

Healthcare should be 'free,' completely paid by taxes, IMO. The Dutch gave up an essentially 'free' system by privatizing it, now the costs are exploding.

Just wondering if you have a source for this? Not saying it isn't true at all, I'd just be curious to read about it some, because I think there would be some more to it if costs are exploding with privatization.

It's a place where capitalism, or a free-market strategy, just doesn't work.

I think the best option is a system that combines the best elements of the market and government.

 

[CAC1001]

They are wealth redistribution. How else to frame it?

The way I see it is that "wealth redistribution" as conservatives and the Right think of it is the government taking the income of one person or group to give to another group for the sake of creating a more equal outcome in society. Having sound social safety nets isn't about doing that. It's just about having a system of social safety nets in place so as to provide a cushion for the general public in the event of a recession, depression, or the average person who just ends up hitting some bad luck in terms of their job or whatnot. It is not about some bureaucrat who doesn't like one group of people making more than another group and wants to thus "redistribute" income and wealth, and also thinks that the solution to many of society's problems is via a bunch of government programs.

However, when a society is able to help those in need, then it makes sense to do so, because it doesn't just benefit the needy, but also the many businesses that are peripherally affected. Anectdotally, I made lots of money (as did many others) that I probably wouldn't have made, during a certain period, were it not for the Section 8 aid given to thousands of renters in my area during that period.

In an instance such as that, you have income being redirected from one group to another group, so in order to "help" all of the businesses affected, you have to hurt some other part of society (as government doesn't create wealth remember). That said, I agree with society helping the needy when it is able to in terms of social safety nets. The important

Just enough to keep them locked in poverty and a bit less hungry, eh?

A minimal social safety net won't keep someone locked in poverty. It is as it sounds, it provides for the basics a person needs to survive until they can find another job.

But certainly not enough to, say, start a business ... even if they might have a good idea and a good plan.

You mean like Solyndra? IMO, the government should not at all be in the business of giving loans out to businesses. A government bureaucrat is not going to risk taxpayer money with the same degree of care as an investor investing their own money in the private sector will. Also, this process can be corrupted in that the government will think it can predict which industries are the future and thus which ones it should focus on supporting. Leave allocation of capital to the market.

Nevertheless, I'd agree with you if it weren't for the fact that most of the aid money gets redistributed into the general economy ... which is good for the whole country.

Take that couple hundred billion (whatever it is) out of the general economy and see what happens. Hundreds of thousands, maybe millions, more people out of work. Thousands of businesses, large and small, would be adversely affected.

This is after the government already took that couple hundred billion out of the general economy, then re-injected it back in. Thus, by that argument, the government would have to have hurt thousands of businesses and thousands or millions of workers from the start.

What does that matter? Would you rather have a society with millions more people living in abject poverty? I don't want my area inundated with large numbers of such 'desperados'.

What makes you think it is government spending that eliminates poverty? If anything, many such programs only increase it. That's part of the problem.

The lottery winners on food stamps is what, one or two people? They'll eventually correct that loophole. I agree that it's absurd that they don't test for assets, but it's not like it's a big problem. My guess is that the vast majority of people getting government aid actually need it. And like I said, it helps the economy.

There cannot be any net benefit to the economy from people getting government aid of any kind because every dollar that the government injects into the economy was either taken out of the economy at an earlier date or will have to be taken out at a futue date if the government is using debt.

I am not against government aid myself in various forms, but the way the welfare state developed for many years was in a manner that did not at all fix poverty. When Ronald Reagan came into office, for example, you had multiple genertions of people who had been living on welfare.

IMO, what government aid should do is help people get back to fishing. There's a saying I am sure you have heard, "Give a man a fish, you feed him for a day, teach a man to fish, you feed him for his life." Government aid should either be about helping teach people to fish or aiding people who have hit a storm that temporarily turned their boat over on them and thus are unable to fish for awhile. So society will give them fish until they get their boat turned over. If the policy is to just to hand out lots of free fish though, then there will be a lot of people who choose to quit fishing.

I'd say that government aid wrt food, housing, monetary assistance, education, etc. is, generally, sustainable and constructive -- but not if the government continues to reinforce outsourcing, offshoreing, immigration of indigent and unskilled people, and other policies which increase the number of US residents who need aid.

There aren't enough jobs in the US for residents of the US who are qualified to do them. It's an increasing problem, and I don't see any reason to believe that the trend will reverse. There's no political will to do the obvious, not necessarily easy but straightforward, fixes. So, the trend is likely to continue, imo.

What is the obvious?

Cut out all social welfare programs and the US will eventually have the sort of massive street-dwelling and shantytown situations that certain other countries have to deal with ... whether or not the US significantly curtails immigration of poor and technologically unskilled people.

That's what they said when welfare reform was passed in the 1990s. Some prominent people of the welfare system even resigned in protest, saying it would be a disaster. But yet the 1990s are thought of as being great times, and the unemployment rate continued coming down.

I would not say cut all social welfare programs, especially right now as the economy stinks, but don't maintain any large social welfare state, or else one ends up with a large group of society living off of the rest of society, and usually remaining permantently poverty-stricken. Have a good social safety net system in place.