Monday, February 13, 2012

ECONOMY - Our "Safety Net"

"Even Critics of Safety Net Increasingly Depend on It" by BINYAMIN APPELBAUM and ROBERT GEBELOFF, New York Times 2/11/2012

Excerpts

Ki Gulbranson owns a logo apparel shop, deals in jewelry on the side and referees youth soccer games. He makes about $39,000 a year and wants you to know that he does not need any help from the federal government.

He says that too many Americans lean on taxpayers rather than living within their means. He supports politicians who promise to cut government spending. In 2010, he printed T-shirts for the Tea Party campaign of a neighbor, Chip Cravaack, who ousted this region’s long-serving Democratic congressman.

Yet this year, as in each of the past three years, Mr. Gulbranson, 57, is counting on a payment of several thousand dollars from the federal government, a subsidy for working families called the earned-income tax credit. He has signed up his three school-age children to eat free breakfast and lunch at federal expense. And Medicare paid for his mother, 88, to have hip surgery twice.

There is little poverty here in Chisago County, northeast of Minneapolis, where cheap housing for commuters is gradually replacing farmland. But Mr. Gulbranson and many other residents who describe themselves as self-sufficient members of the American middle class and as opponents of government largess are drawing more deeply on that government with each passing year.

Dozens of benefits programs provided an average of $6,583 for each man, woman and child in the county in 2009, a 69 percent increase from 2000 after adjusting for inflation. In Chisago, and across the nation, the government now provides almost $1 in benefits for every $4 in other income.

Older people get most of the benefits, primarily through Social Security and Medicare, but aid for the rest of the population has increased about as quickly through programs for the disabled, the unemployed, veterans and children.

The government safety net was created to keep Americans from abject poverty, but the poorest households no longer receive a majority of government benefits. A secondary mission has gradually become primary: maintaining the middle class from childhood through retirement. The share of benefits flowing to the least affluent households, the bottom fifth, has declined from 54 percent in 1979 to 36 percent in 2007, according to a Congressional Budget Office analysis published last year.

And as more middle-class families like the Gulbransons land in the safety net in Chisago and similar communities, anger at the government has increased alongside. Many people say they are angry because the government is wasting money and giving money to people who do not deserve it. But more than that, they say they want to reduce the role of government in their own lives. They are frustrated that they need help, feel guilty for taking it and resent the government for providing it. They say they want less help for themselves; less help in caring for relatives; less assistance when they reach old age.
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The problem by now is familiar to most. Politicians have expanded the safety net without a commensurate increase in revenues, a primary reason for the government’s annual deficits and mushrooming debt. In 2000, federal and state governments spent about 37 cents on the safety net from every dollar they collected in revenue, according to a New York Times analysis. A decade later, after one Medicare expansion, two recessions and three rounds of tax cuts, spending on the safety net consumed nearly 66 cents of every dollar of revenue.

The recent recession increased dependence on government, and stronger economic growth would reduce demand for programs like unemployment benefits. But the long-term trend is clear. Over the next 25 years, as the population ages and medical costs climb, the budget office projects that benefits programs will grow faster than any other part of government, driving the federal debt to dangerous heights.

Americans are divided about the way forward. Seventy percent of respondents to a recent New York Times poll said the government should raise taxes. Fifty-six percent supported cuts in Medicare and Social Security. Forty-four percent favored both.

What's the fancy word...conundrum?

In my view, the conservative side = sink-or-swim. Leave people on their own and if they sink it's their fault. BUT is it really? Was the ordinary citizen now out of work (had a job in 2010/2011) their fault? Are they still out of work because they are lazy, really?

Is the elderly person who is dependent on Social Security totally at fault because they didn't set aside enough for retirement, or could it be they didn't make enough income to set aside for retirement? Especially if they sent their children to college with it's ever increasing costs.

When it comes to health care, are any of us in the middle or lower income brackets at fault for the ever increasing cost, that we cannot afford?

This is a no-brainer, of course we do not have control of what the health care industry charges, AND they can charge whatever they want in our "free" economy. Why, because they know we cannot refuse to pay without risking our lives. Health Care is a seller's market and buyers have little say. So, if your are rich or healthy you don't worry about the cost of health care; BUT if your are sick, old, or not rich, meaningful health care MAY be out of reach, unless the government steps in.

Hence the conundrum.

In my view, government (at All levels) has an ethical and moral obligation to see that every citizen has the basics needed to live. This MAY not automatically mean a "handout," but that MAY be necessary in specific circumstances. At minimum, it means seeing that policies or institutions are in place to provide what is needed, AND you pay whatever is needed.

Our present situation is government programs that help citizens BUT we are unwilling to pay for them. We want the free-lunch.

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