The Road to Dependency is the Road to Serfdom

Below find an excellent Orange County Register editorial on one direct effect of Obama’s stimulus bill, the re-creation of welfare dependency. The bill essentially repeals Clinton’s successful welfare reform signed into law in 1996. Even liberal Slate magazine’s Mickey Kaus termed this, “a liberal conspiracy to expand the welfare rolls.”

Better yet, the comment at the end of the article. It’s right on point. You get votes by addicting voters! Political parties are in the business of getting votes.

The futility of the whole sham was more eloquently expressed in a quotation that Gary P sent earlier today:

You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is about the end of any nation.. You cannot multiply wealth by dividing it.”
Dr. Adrian Rogers, 1931-2005

Atlas will indeed shrug, the question is how long it will take to pick up the pieces. 

tjm

Editorial: Road to dependency

Without secrecy, panic and haste, the stimulus bill could never have passed.

It is becoming increasingly clear that the massive “stimulus” bill rushed through Congress and signed by the president yesterday, was neither intended nor designed to be an economic stimulus bill in the classic Keynesian sense.

Under Keynesian theory (which is shaky, but leave that aside for the moment), the important thing for the government to do in a downturn is to inject as much money into as many parts of the economy as possible, as quickly as possible.

The quickest way is through tax cuts or (as some suggested) suspending the Social Security and Medicare taxes (both systems are financially unsustainable in their present form anyway) for at least a year, giving people more money in their pockets right away.

Another way to do stimulus, as Robert Rector, welfare and entitlement analyst for the conservative Heritage Foundation, reminded us, would have been to give everybody who received an Earned Income Tax Credit payment last year another payment of similar size immediately. “You could have injected $50 billion into the economy in 14 days, and done it through putting money into the hands of low-income people,” Mr. Rector told us.

The bill did expand the EITC and create several other “tax credits” for people who didn’t have enough income to pay taxes. But it won’t put that money into the economy until April 2010. Some quick stimulus!

One particularly egregious aspect of the bill is that it essentially overturned one of the signal policy achievements of the 1990s, the welfare reform bill signed by former President Clinton in 1996. That reform not only reduced the Aid to Families with Dependent Children caseload by two-thirds, it reduced the poverty rate, especially for minority children, and put millions of formerly dependent people to work and on the road to independence.

The mechanism was simple. Prior to 1996, the federal government essentially subsidized state governments for each new person added to the welfare rolls (and punished them by removing funding when people went off welfare, a perverse incentive).

The 1996 reform gave each state a block grant, calculated on the basis of population and other factors, giving states an incentive to target money at those who truly needed it and the flexibility to spend the money effectively. It worked.

The new “stimulus” bill, however, provides $4 billion to be spent by paying 80 percent of the cost of each new recipient. So for every $1 a state spends on a new welfare “client,” a state gets $4 in “free” money from the feds. The incentive, then, is to add as many people as possible to the welfare rolls. Mickey Kaus, the heterodox liberal blogger for the online magazine Slate called it a “liberal conspiracy to expand the welfare rolls.”

Was this change triggered by the need for extra assistance during a recession? Hardly. The reform law included a contingency fund for quick distribution to states with high unemployment. That fund could have been increased, to be distributed under the old formula. Besides, the bill included an expansion of unemployment benefits.

It is difficult to interpret the decision to change the funding formula and eliminate the Clinton-era welfare reform measure as anything other than a deliberate attempt to increase the number of people dependent on government welfare payments.

The bill also contains a half dozen new entitlements or expansions of existing programs. The cost is variously estimated (people are still scanning the 1,400-page bill that no member of Congress could possibly have read for more surprises) at between $220 billion and $250 billion a year in ongoing additional welfare spending.

If these radical increases in the welfare state had been proposed through ordinary congressional procedures – subcommittee hearings, witnesses from all sides, committee hearings, proposed amendments, a modicum of publicity – it is unlikely they would have stood a chance of passing. But the bill was assembled in secret and passed in haste encouraged by presidential inducement of panic, without even a pretense of due deliberation. So much for transparency.

windfall wrote: Let me make this real simple for you.      If you are a political party, you are in business to win elections. To do that, you need voters. If you are the party of say the long distance runners, you want to create more long distance runners, either by importing them or by influencing voters already here to become long distance runners. If you are the party of the rich, you want to create more rich voters. You do this by removing impediments to work, saving, investment and production. You lower tax rates and reduce the burden of government. If you are the party of the poor, you want to create more poor voters. You do this by increasing impediments to work, saving, investment and production. You raise tax rates and increase the burden of government. If this still doesn’t create enough poor voters to solidify your powerbase, you import more poor people and put them on a path to citizenship or just register them to vote anyway. And if this still doesn’t create enough poor voters, you finally just pay people outright to stay dependent on government, which ensures that they never get ahead. The path to financial independence has an early fork in the road. One way leads to dependence, one to independence. In order to qualify for government handouts, you need to present and document yourself as a victim. In order to get ahead, you need to accept the axiom that “if it’s going to be, it’s up to me”. These two positions, states of mind really, are diametrically opposed. It is virtually impossible to hold both concepts of oneself simultaneously. This is why you can choose to get by or you can choose to get ahead but you can’t choose both. Of course, you can always go back and revisit that choice. And that is why the welfare reform of the 1990s worked in terms of weaning people off the welfare rolls and onto a different, more responsible, more productive and, ultimately, more independent path. In repealing welfare reform as well as encouraging illegal immigration, motor voter laws and the right to vote without providing even basic identification, and by constantly pushing for higher taxes, more government intrusion and intervention into business as well are more borrowing and spending, Democrats are simply doing everything in their power to make it easier to get by and harder to get ahead. They’re hoping that when millions of voters and potential voters reach or revisit that fork in the road, they will choose dependency. What’s so difficult to understand about that? After all, they are the party of the poor. They need to create as many poor people (and as few rich) as possible. 2/18/2009 7:46:57 AM Recommend(52) Report Abuse

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