Sunday, July 15, 2012

Don't fear the fiscal cliff -- fear the welfare cliff

I dream of a day when vintage media covers the important issues, such as how the president's policies are permanently condemning the nation's poor to lives of misery.

I wrote last year about the way in which welfare programs lead to very high implicit marginal tax rates on low-income people. More specifically, they lose handouts when they earn income. As such, it is not very advantageous for them to climb the economic ladder because hard work is comparatively unrewarding... Thanks to the American Enterprise Institute, we now have a much more detailed picture showing the impact of redistribution programs on the incentive to earn more money.

...Needless to say, there’s not much reason to earn more income when living standards don’t improve. May as well stay home and goof off rather than work hard and produce... This is why income redistribution is so destructive, not just to taxpayers, but also to the people who get trapped into dependency.

And which candidate continues to press for more and more dependency?

[Does the name] Julia ring a bell ... ? If you guessed Obama, pat yourself on the back. Why just yesterday he gutted the Work Requirements From Clinton-era Welfare Reform. As the chart indicates above, there is NO incentive to work and get off the government crutch and the Democrats are pushing forward with agendas to add more.

The problem for Obama and the Democrats is that eventually, you will lose many taxpayers as they give up the ghost and join those already on the teat of government. The reason will be that it is no longer worth having to work over 6 months of the year just to make enough to pay your taxes and then have only a few months of pay to spend on everything else.

Some call the inevitable result 'Going Galt'. Professor Glenn Reynolds describes it as 'Middle Class Anarchy':

When the backbone of a country starts thinking that laws and rules are not worth following, it’s just a hop, skip and a jump to anarchy...

TV has given us the illusion that anarchy is people rioting in the streets, smashing car windows and looting every store in sight. But there’s also the polite, quiet, far deadlier anarchy of the core citizenry—the upright citizenry—throwing in the towel and deciding it’s just not worth it anymore. If a big enough proportion of the populace—not even a majority, just a largish chunk—decides that it’s just not worth following the rules anymore, then that society’s days are numbered...

The whole idea of "The Cloward-Piven Strategy" may seem far-fetched for readers unaccustomed to the idea of a fifth column working -- within the government -- to collapse the financial system.

I think we have assembled more than enough proof: record use of food stamps (even Spanish language advertisements hawking the benefits of food stamps, presumably to illegal aliens), record use of welfare benefits, record dependence on government-funded health care, and much, much more.

Combined with annual trillion-dollar deficits, the only possible scenario is one of collapse. The laws of mathematics aren't partisan. The numbers are what they are.

And this president appears bound and determined to "fundamentally transform America" -- his words -- achieved via an economic catastrophe.

You and I have but one chance to stop this madness on November 6th.


Zach said...

Can we see a histogram of salaries below the chart (like trading volume is usually shown below a stock history chart)? It would be interesting to see if people know about this and decline raises or working few hours to hit a target of $29,000 a year.

Anonymous said...

"You and I have but one chance to stop this madness on November 6th."

Unfortunately, no we don't since the other candidate is a closet socialist. Mittens in the same cut as Mike Bloomberg. Mittens wants Obamacare with just a few minor changes and also wants to increase taxes (supporting a national sales tax). Perhaps the only difference is that O'Bama's agenda will be blocked by the republican congress, While Mittens policies will likely get supported by Republican. Recall the Bush W, pushed through several socialist programs such as Prescription Drug coverage under medicare. Bush also failed to reign in the housing bubble and appointed Ben Bernanke as Fed Chairman. Of Course Voting for O'bama doesn't get us out of hole, and will likely start WW 3 if he wins, and his foriegn policy has just about pissed everyone in the world off. Damned if you do Damned if you Don't.

directorblue said...

@Anon - deserting us on the battlefield now is unacceptable.

Romney ain't a conservative by a long shot, but he also ain't a Marxist ideologue.

And the biggest thing a Romney win delivers us is a path to an originalist Supreme Court.

Don't go AWOL -- defeat Obama!

Anonymous said...

Both parties are the problem, democrats are socialists and republicans are not far behind. The American people are partially to blame for our mess, we vote these a-holes into office and hope for change, which never comes.

The politicians and bankers who got us into this mess need to be held accountable for their crimes, put in prison or worse.

Anonymous said...


I have no doubt that Romney will win in November. I am just very concerned that the policies blocked during the Obama years will get passed as Republican support Romney's liberal agenda:

1. National Sales tax (They introduce it under fair tax to get rid of the Income tax, but the income tax will never go away. Once a new tax becomes law it never goes away

2. Gun Control -Romney supported strict Gun control as the Mass. Governor

3. Bigger bailouts for Wall street and Bankers, and no prosecution for Financial Fraud. Romney is in Bed with the Financial crooks.

4. Further restrictions of the working class in the disguise of National security: travel restrictions, Capital Controls, Strict federal regulation of non-discretionary goods and services.

Every year the federal gov't gains more power, while the working class loses freedom and wealth. Presidents are no longer chosen by the America people, They are selected by special interest groups which Finance the campaigns of the politicians that they want. It doesn't matter to them if its a Democrat or a Republican. The outcome is the same, Notice that the same special interest groups give money to both candidates.

The erosion of rights and Wealth can't be stopped, but it can be slowed by creating grid lock in Washington. Only by choosing apposing parties; one in the White house and the other Congress can one hope to slow the damage.

FWIW: There is zero difference between Romney and Obama. To believe otherwise is just plain foolish.