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Who Benefits From Social Programs?

2008 popular vote by county. Brighter red repr...

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 Despite right-wing rhetoric, it isn’t  lazy freeloaders in blue states.

The Center for American Progress site has an overlooked piece from December that demolishes those GOP talking points:

The Facts About Americans Who Receive Public Benefits

As it turns out, the majority of the folks who receive benefits from these programs are elderly, blind or disabled and have paid into the programs when they were working:

Within these social insurance programs, most of the participants have paid into them, through payroll taxes taken out of their own paychecks and through contributions paid on their behalf by their employers. Like private life or property insurance, everyone makes regular contributions with the expectation that when a certain event occurs (in the case of public benefits, that event could be retirement, disability, or temporary job loss), they will be protected and able to collect benefits they have paid for.

Conservatives focus on how the costs of these programs have grown over the past several decades, but so too have the public’s payments into them. Currently payments into social insurance programs represent an estimated 37 percent (or $807 billion) of federal receipts in 2011, compared to 17 percent (or $124 billion) in 1961 and 31 percent (or $455 billion) in 1981, including federal employees’ payments into their retirement accounts (the historical numbers are adjusted for inflation).

So, clearly the deadbeat able-bodied city-dweller on the dole is mostly a strawman.

When you look at the recent piece in Mother Jones, you should see why Republican politicians are so eager to direct fire away from the real culprits — the denizens of Red States:

Most Red States Take More Money From Washington Than They Put In

As a recent New York Times article documents, even as fiscally conservative lawmakers complain about deficit spending, their constituents don’t want to give up the Social Security checks, Medicare benefits, and earned income tax credits that provide a safety net for the struggling middle class.

This gap between political perception and fiscal reality is also reflected in the distribution of tax dollars at the state level: Most politically “red” states are financially in the red when it comes to how much money they receive from Washington compared with what their residents pay in taxes.

Here is the list of the states receiving the most federal tax money versus their tax payments:

1. New Mexico: $2.63
2. West Virginia: $2.57
3. Mississippi: $2.47
4. District of Colombia: $2.41
5. Hawaii: $2.38
6. Alabama: $2.03
7. Alaska: $1.93
8. Montana: $1.92
9. South Carolina: $1.92
10. Maine: $1.78

I bolded and underlined the blue states above.

Of all of the red states, only three paid more than they took in: Arkansas, Nebraska and Texas.

On the blue side, 14 blue states paid more than they received.

Take a look at the interactive map on the Mother Jones page. Keep in mind that they defined “blue state” as any state that went for Obama in 2008 and “red states” are those that went for McCain/Palin.

For example, taxpayers in the “blue states” of Florida, North Carolina, Virginia, Nevada and New Mexico each took more than they paid in federal taxes.

So clearly there is an inequality here — but if there are freeloaders, they aren’t the ones being targeted by the GOP frontrunners and propaganda machines.

It seems that the people who most resentful about government waste and overspending on social programs are those who are receiving the largess.

In other words, the real “blue states” like New York and California foot the bill for the Tea Party crybabies in Missouri, Arizona, Utah and Alaska.

Maybe we should limit federal payments to states to what they actually pay into the system. That might take care of some of the burgeoning deficit that Republicans suddenly became concerned with when they lost the White House in 2008.

-Chris

February 17, 2012 Posted by | Uncategorized | , , , , , , , , | 1 Comment

Worst Socialist Ever!

SOCIALISM FOREVER

The Atlantic’s Derek Thompson reviews Obama‘s record and finds his socialist credentials wanting:

President Obama: History’s Worst Socialist?

Thompson lays out the weak case for socialism likely to be raised by the likes of Newt Gingrich (and any right-wing knuckle-dragger with access to cable news, the internet or a radio):

To be very fair to Gingrich, the president’s agenda is not entirely devoid of socialism. No, really! After all, he defends Social Security, which is a forced savings program. He nationalized the troubled automakers in his first months as president — totally socialist. He signed a law expanding the health care regulations and requiring Americans to buy medical insurance, which I suppose you could classify as socialism-lite; although public decency and child abuse laws already require families to buy clothes and food, and nobody complains much about those.

The evidence against:

But when it comes to tax policy and redistribution, a not-insignificant part of modern democratic socialism, it’s fair to say that President Obama is in the running for worst socialist in history. Rather than raise taxes, he has inherited the lowest tax rates in a generation … and lowered them repeatedly while presiding over a period of exacerbating income inequality and a stupendous wealth comeback on Wall Street.

Facts:

  • Federal tax receipts, as a share of the economy, are at their lowest since the early 1950s
  • Marginal income tax rates are at their lowest since the 1930s, save for a brief period in the last 1980s

Thompson’s post is illustrated with great graphs from Business Insider.

The Business Insider link has a number of great graphs that to any sensible person would show incontrovertible evidence that tax policies have increasingly favored the very wealthy while leading to calamity for the rest of us.

I have repeatedly made the case that Obama is as far from being socialist as Christopher Hitchens was from being the Pope.

But facts have never been important to the idea-bankrupt Republican horde.

-Chris

December 19, 2011 Posted by | Uncategorized | , , , , , , , | Leave a comment

Flat Tax Now! (For Social Security)

 

English: Scanned image of author's US Social S...

The Institute for Policy Studies has a great idea of how to handle the projected Social Security deficit — a flat tax on ALL wages:

In 2012, American workers will pay Social Security taxes on their first $110,100 of wages. For most Americans, that’s all of their wages. Only a lucky 10 percent of Americans make more.

Let that lucky 10 percent pay Social Security taxes on all of their wages, just like the rest of us do. Make Social Security a flat tax on all wages instead of a regressive tax on low and medium wages.

The author claims that a flat tax would raise $100 billion annually, and would not only close the deficit gap, but allow for a small increase in benefits to help keep up with the soaring cost of living.

-Chris

November 30, 2011 Posted by | Uncategorized | , , , , , , , | Leave a comment

Deficit Reduction and Social Security

Seal of the United States Social Security Admi...

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In reviewing the proposal by the president’s bipartisan deficit reduction committee, there is one portion that I cannot disagree with more.

To be sure, this is a serious proposal, with pain all around, but the delay in benefits for Social Security recipients until the age of 68 is wrong, wrong, wrong.

I have always been a huge advocate of the much-derided lock box for Social Security.  The current system is solvent until 2037, but will rack up huge losses going out to 75 years from now.

Treating Social Security as just another part of the overall budget is one of the accounting tricks that have gotten us into this mess to begin with.

This is the first year since the 1980s that the Social Security will start paying out more than it has taken in.

This is due to the large number of Americans expected to retire. The 75 year shortfall is calculated at $5.3 trillion. Insurmountable, right?

Wrong.

Senate report says tweaks can sustain Social Security

Social Security faces a $5.3 trillion shortfall over the next 75 years, but a new congressional report says the massive gap could be erased with only modest changes to payroll taxes and benefits.

There are a few options to fix Social Security:

1. Increase the age where retirees qualify (as proposed by the committee)
2. Curb cost of living adjustments
3. Raise payroll taxes on EVERYONE

Social Security isn’t an “entitlement”. Everyone pays into it. It is an insurance policy that provides a modest safety net for retirees.

I agree with this letter writer to the Baltimore Sun on this point:

Cutting Social Security benefits is as bad as raising taxes

Social Security is said to be an “entitlement,” but the difference between an “obligation” and an “entitlement” is just a matter of point of view. Those of us who have been paying into the Social Security system for years are entitled to our promised benefits. The U.S. government is obligated to keep its promises.

Social Security and it’s problems should be addressed separately from the concerns of the burgeoning Federal deficit.

For too long, legislators have counted on being able to dip into the Social Security revenues to work their accounting magic and prop up a wasteful budget.

It’s long past time to end that practice.

-Chris

November 11, 2010 Posted by | Debt, Deficit, Democrats, Economics, Republicans, Tax Debate | , , , , , , , | Leave a comment

Deficit Rhetoric vs. Action

Rand Paul at Louisville forum by Gage Skidmore

Image via Wikipedia

Two articles came to my notice today concerning the deficit.

The big news was that Obama’s bipartisan commission on the deficit released their report on cutting the budget deficit:
Panel Weighs Deep Cuts in Tax Breaks and Spending

The lead:

A draft proposal released Wednesday by the chairmen of President Obama’s bipartisan commission on reducing the federal debt calls for deep cuts in domestic and military spending starting in 2012, and an overhaul of the tax code to raise revenue. Those changes and others would erase nearly $4 trillion from projected deficits through 2020, the proposal says.

The recommendations are dead, dead, dead.

Why?

The plan would reduce Social Security benefits to most future retirees — low-income people would get a higher benefit — and it would subject higher levels of income to payroll taxes to ensure Social Security’s solvency for at least the next 75 years.

Italics are mine.

These are the tough choices that country faces, and this is a serious proposal to fix what’s broken. Politically, however, it’ll never fly.

The plan calls for a simplification –and tax cuts across the board– by cutting many popular tax loopholes. The overhaul of the tax code would net a projected $80 billion in 2015.

On the other hand, the Tea Party poster boy, Rand Paul, can’t specify exactly what he would do to slash the deficit:

In Tense Interview With Spitzer, Rand Paul Can’t Name Specific Cut To Balance Budget

Spitzer asked Paul to name specific programs he would cut from health care, Social Security, or defense. But Paul demurred, explaining that he would offer a balanced budget in the next Congress — over 1, 2, 3, 4 and 5 year increments, but was still unsure of what to cut to get there. At one point, Paul even suggested that rather than pressing him for specifics, Spitzer should invite liberals and ask “how do you continue to have these programs?”

In other words, complete and utter bullshit.

Serious debate about the deficit is important, but for the Tea Party crowd, allegedly fueled by their deep concern about the deficit, have absolutely no plan to make things better.

It reminds me of the Monty Python skit, “How To Do It”:

Simplistic solutions to complex problems with no understanding and no hard work — that’s the stock and trade of the Tea Party and the Republicans who are trying to channel their activism to continue their campaign to reward the wealthy.

Bolstered by their midterm wins, there’s little hope that the Tea Party Republicans will negotiate in good faith to address the deficit.

Many of them have expressed publicly and privately that they do not want Obama to have a legislative win that he can run on in 2012, so they are quite content to do absolutely nothing and block everything.

We’ll see how it plays out, but it doesn’t look promising.

-Chris

November 10, 2010 Posted by | Debt, Deficit, Democrats, Economics, Elections, Politics, Republicans, Tax Debate | , , , , , , , | Leave a comment

Wealth Distribution Perspective

Rich People Live Here

Image by amanda farah via Flickr

A site appropriately named Too Much posted an eye-opening article over the weekend called “How Billionaires Could Race To Our Rescue”.

To give an idea of what has happened to all the money in this country since the Reagan era:

The ten richest Americans on the new Forbes list carry, all by themselves, a combined net worth of $270 billion, more than the inflation-adjusted net worth of the entire initial Forbes list back in 1982.

The article also contains this staggering nugget:

A 15 percent “wealth tax” on all personal assets over $1 billion would this year raise $145.5 billion, more than enough to cover the entire $140 billion budget shortfall America’s 50 states are facing in the current fiscal year.

This is a beautiful idea…that is ridiculous in its naiveté. These billionaires obtained their exorbitant wealth through things other than generosity and civic-mindedness.

To be fair, there are those who are wealthy who have the idea of giving back to the country.

In response to “Ferris Bueller” punchline Ben Stein’s televised whine about the horrible injustice of ending the tax cuts for the very rich, Linda McGibney had a great piece on the same CBS Sunday Morning show a week later.

In part, her response is:

Mr. Stein, there are Americans who qualify for this tax increase under the proposed plan who don’t feel “punished” by it. We feel it is our duty in hard times to help the rest of America…

And:

I have always understood that the “haves” were greedy. This is the first time I’ve heard one of them express it out loud so openly.

But the idea of waiting for the wealthy to bail America out because of their innate sense of patriotism is folly.

Part of the problem the Democrats face is their own inability to articulate the issue in historical context.

The tiny minority of rich people in this country are wealthier than they have ever been. Everyone else is a lot poorer. The gap widens by the minute. This happened because of tax and economic policies that allowed the rich to send jobs overseas, and allowed the wealthy (who wrote the policies in the first place) to pay less and less in taxes.

Starting with Ronald Reagan, the tax burden was lowered until disaster struck. Reagan skipped out of town, leaving George Bush Sr. to clean up the mess (and to responsibly break his “no new taxes” pledge).

Clinton had some luck restoring balance, and surpluses resulted. The wealthy were still rolling in dough, and the middle class was stronger during the Clinton years.

Then Bush took over. His policies were an economic disaster by any measure.

But the super rich will not countenance a return to the modest taxes of the Clinton years.

From their limousines and multimillion dollar homes, they view the programs that help working Americans as “government waste”.

They want to take away education, Social Security, health care and other services from the rest of us.

So they can keep more of their money.

For decades the wealthy right has decried the spectre of “class warfare” at the mere mention that they should, perhaps, pay their fair share.

Maybe it’s time to show them what class warfare really looks like.

After all, we outnumber them.

Update: This guy running for Robert Byrd’s West Virginia Senate seat is the poster child of the unpatriotic wealthy.

http://www.msnbc.msn.com/id/32545640

Visit msnbc.com for breaking news, world news, and news about the economy

-Chris

September 28, 2010 Posted by | Debt, Deficit, Democrats, Health Care, Health Care Reform, History, Politics, Republicans, Tax Debate, Wall Street | , , , , , , , , , , | Leave a comment