data economics

Those Who Work

America’s history of political discourse has had its share of twists and turns.  Though our current debate may feel like it’s been going on forever, it hasn’t.  It was born in the middle of the last century. There were distinctly different debates that preceded it that political scientists refer to as party systems.  In America, we’ve had six.  Some have made more of an impact then others. We’ve chosen sides between the president and congress, slavery and abolition, business and workers.  The current struggle is between the need for government intervention and the preservation of civil liberties.  There are subsets of it.  But the core is summed up simply.  Mostly out of habit, the words that our politicians and prospective presidential candidates are using may make it feel like that debate is continuing.  It’s not. There’s something very different happening.

The 2016 presidential primary elections are not progressing the way most of us who pay attention to these things may have anticipated. The drastically different conservative representation in candidates is signaling something.  It’s a change.  During the last 80 years, two massive events have driven how we define our political affiliations. The first was the social safety net created by FDR’s New Deal. The second was the Civil Rights Act of 1964 and the movement that it represented. Both were instances where the federal government intervened to represent Americans who could not represent themselves. Both represented an infringement of some sort on civil liberties by those least in need of representation. And the resulting top level argument of most of the last century has been a battle between expanding government involvement in people’s lives and defending civil liberties.  What we’re seeing now is a signal.  That debate is dying out.

The Good Government

We’ve had the forces of political inertia colliding for generations now without shrinking government involvement in our lives. Why?  The truth isn’t as nefarious as our stale establishment conservative presidential candidates might want you to believe.   The reality is that the modern world has more problems that government is suited to solve then our founding father’s would likely have imagined-things like racial equality for instance. It took 600,000 American deaths to eliminate slavery. And for another 100 years there was still no significant move towards racial equality until the federal government intervened.

Let’s look at health care. Our first president was bled to death by his doctor because that was the medical treatment used for almost everything a full quarter century after the Declaration of Independence was signed.  Yet I’ve seen more than my share of founding father quotes to disparage the Affordable Care Act. Healthcare cost in America, left to private enterprise and driven by profit has been spiraling out of control since the dawn of modern medicine. And now we’re finally getting around to working our way out of it with a clumsy solution to a real problem.

We can point to retirement. We live 40 years longer than we did when we signed the Declaration of Independence. But unfortunately, our bodies can’t work 40 years longer. So we need some way to fund life after work. So the government helps where most can’t and never have.  The case is pretty easy to make. We need some level of government intervention in our lives. And though some of the sound bites from our conservative candidates still sound like the argument is still alive.  It’s not.

But conservatives shouldn’t be discouraged.  There’s righteous energy in the new debate.  And though the only people who have tapped into it are horribly unsuited for high office, which will almost certainly cost you any chance at a Republican president in 2016, you’ll probably get the message.  Which is progress, because your old argument is a loser.

The Bad Government

In March 2011, a team of sociogists and political scientists at Harvard, Vanessa Williamson, Theda Skocpol, and John Coggin released their findings from extensive research conducted on the Tea Party movement. Skocpol and Williamson later published The Tea Party and the Remaking of Republican Conservatism the following year expanding on their findings.   What they concluded about the core beliefs of what is considered to be a far right subset of the larger party is very different from the limited government views of core conservatives.

“Tea Party activists hold positive views about the government entitlement programs from which they personally benefit—including Social Security and Medicare, and also other entitlement programs they have used. ”

These programs have been in place for several generations now providing critical benefits to our society. They’re not hard to advocate for. And they’re equally difficult to oppose as a whole. Which starts to eliminate some portion of the “big government” debate. So it’s shifted to something else. The thread that’s becoming more and more prevalent within our conservative base is subtle but if you take the time to listen to it, it’s powerful.

“Tea Party activists view themselves in relation to other groups in society. Tea Party activists in Massachusetts, as well as nationally, define themselves as workers, in opposition to categories of non-workers they perceive as undeserving of government assistance. Concerns about freeloading underlie Tea Party opposition to government spending.”

Recently, Alec MacGillis wrote about the phenomenon of blue collar growth within the Republican Party in his New York Times article Who Turned My Red State Blue?

“The people in these communities who are voting Republican in larger proportions are those who are a notch or two up the economic ladder — the sheriff’s deputy, the teacher, the highway worker, the motel clerk, the gas station owner and the coal miner. And their growing allegiance to the Republicans is, in part, a reaction against what they perceive, among those below them on the economic ladder, as a growing dependency on the safety net, the most visible manifestation of downward mobility in their declining towns.”

The conservative movement that is growing is no longer a crusade to stop government infringement against personal liberties.  It’s those who work and contribute to society against those we believe do not. 

Those That Work

But is it a good movement?  Certainly it has attracted a certain zeal for hatred of groups like immigrants or minorities. Which is what most of us more moderate participants tend to find most disagreeable.  But if those of us who disapprove of the notion of an angry white mob driving the Republican primary can suspend our outrage for long enough to actually gather some perspective on the well intention-ed,  we can start to separate some signal from the noise.   Here’s the signal.

The basic fear of the conservative base and many other Americans that we’re talking about is that we’re afraid that we’re becoming a welfare state. It’s a simple, valid fear.  One that most independents and even progressives should have.  We should all be wary that our social safety net could be investing too many resources in areas that are ineffective and creating dependence in those it supports.  And that the resources we are forced to invest on this are becoming unmanageable.    So let’s ask the question.  Is that happening?

What the data says…

From a taxation perspective, we are not a welfare state.  If  you exclude what a nation’s people actually contribute directly to social security programs for the express purpose of receiving it in return during retirement, you can see a clear view of how much a government collects from it’s people for the express purpose of funding government activities and distributing wealth through welfare programs.   Looking at other G20 countries, the 20 largest economies in the world, only Japan, China and India collect less from their people as a percentage of their overall economy.

Screen Shot 2016-01-18 at 6.40.25 AM

-Data Source worldbank.org data tables.

So, at least at the highest level, we’re not in crisis. But just because we’re collecting less, doesn’t mean that we don’t have a welfare expense issue though.  But it does mean that we’re not over-run by tyrannical over bearing capitalist killing taxation.  The data doesn’t support that common sentiment.  But what does it say about welfare spending?  Clearly 10% of the American GDP is a massive amount of money to be taxing our people.  So it’s a fair question.  Here’s what the data tells us is reality.  In the grand scheme of things, welfare is significant but not dominant.  Nor is it spiraling out of control.

Screen Shot 2016-01-18 at 11.14.50 AM

-Data Source usgovernmentspending.com

Screen Shot 2016-01-18 at 11.26.08 AM

-Data source usgovernmentspending.com

What we see is that behind social security, health care, education and defense, we get around to welfare programs.  And though 8% of the U.S. federal, state and local spending is a lot of money, over $500 billion, it’s not spiraling out of control.  In fact, we see it as a straight line correlating with the health of the economy over the past 15 years.  Spending peaked in 2010 at the height of our measures to recover from the great recession and has dropped dramatically since.  Most of the delta over the last five years has been the variability of the unemployment benefits which peaked in 2010 and have rescinded as the economy has strengthened.  In short, the social safety net was doing exactly what it was supposed to do, for that period of time. That’s tough to put on a bumper sticker.  But it’s true.

So why are people so angry?  Well, part of it is the American culture of self determination.  Which, by the way, is an immensely powerful and positive aspect of who we are and we should protect it. But it doesn’t mean we get to be angry for nothing.  Well, the good news for the outrage and anger engines is that we actually do have something to be pissed at.  There’s something else in play here.  Something that feels more permanent. And it’s this.  There is a sinking feeling of dependency that starts to set in when you look at the massive cultural divide between those on government assistance and those that aren’t.  The data supports it.  And there’s clues in how we break down our welfare spending.

Here’s how we spend our welfare money in America.

Screen Shot 2016-01-18 at 11.45.19 AM

-Data source usgovernmentspending.com

About half is spent on things like unemployment, food programs for children and SSI. Things that most agree are a
fairly easy sell for all but your most ardent libertarian sects of America.  Though I’ve heard some people voice frustration about the easy availability of Special Supplemental Income (SSI), a little over 1% of Americans under 65 receive it.  Most have very real disabilities.  The real issue to focus on is how effective we’re being with the other half of what we spend on welfare.

There’s a lifetime of science and opinion that could go into what I’m going to put into a paragraph here.  Which is fine because the intent of this article is not to solve our welfare problem. The intent is to identify the issue in so much as it is relevant to what is driving our changing political debate.  So here goes. Focus on the areas in red on the pie chart above.  In those areas, we have too many people receiving benefits too long that do not have a sufficient criteria for work or education to qualify them for the means tested benefits.  Let’s be specific here though. The problem is not “people these days”  or “those people” or “that culture“.  The problem is how we administer the programs, most of which are federally funded but administratively delegated to state or local entities.   Those programs simply aren’t good enough at establishing and tracking consistent work requirements to deliver an effective, progressively helpful social safety net.  And the standards they are held to in order to receive funding are too low.

Having that opinion doesn’t mean that I hate the poor or that I am insensitive to the issue of racial segregation we suffer from today that we caused over the first three quarters of our existence as a country.  Having that opinion means that I’m looking at the data.  And I know we can do better.

What’s the point of a social safety net?

What should a social safety net do for a given society.  Well, it should do two things at a minimum.  For starters, it needs to get people out of poverty.  This is actually where we do well.  It’s not coincidence that prior to the existence of government assistance in America, our poverty level was about one in four.  Now it’s a little lesser than one in six.  And if there’s one thing that I’ve learned from the years I’ve spent in undeveloped countries, high levels of poverty are bad for everyone.  Not just for the poor.  It’s bad for national security, bad for the economy and bad all around.  It should be avoided at all costs.    The second thing that a social safety net needs to do is lift people out of poverty by mandating development.  That is what we don’t do well at all.  It’s a problem.  One worth some level of dissatisfaction or even outrage. Unfortunately, the political debate we’re having isn’t really scratching the pragmatic itch for America though.

Why not?

Because it’s not focused on solving anything.   It’s focused on stoking the outrage of a base of people frustrated by the party line that they’re being fed.  Here it is: America has become a welfare state spiraling out of control at the expense of all the hard working Americans.  The data and facts don’t support that.  Which is the great thing about good data and facts.  They’re right whether you believe them or not.   That doesn’t mean that we don’t have a problem though.  And it’s a big one that is using a quarter trillion dollars a year less effectively than it could.  So how do we start to hold our government accountable for the required change?  That change by the way, is not reducing taxes.  So stop it.  We’ve got more problems to solve than ever before and we haven’t been this little taxed for generations.  Don’t believe it?  Look at our historical tax files at the IRS.com.  So how do we start the dialogue?

It starts with an exercise in focus.  Focus starts with ignoring what isn’t important.  So what isn’t important? Here’s a list to start with.

  • The fact that there’s no way to guarantee that some people are not  going to get over on the system.
  • The fact that many of the people on government assistance look different than many not on it.(there’s a reason for that…and it’s called the first 180 years of our 240 years as a country)
  • The fact that some people on government assistance may buy something nice.
  • The fact that you know a guy who’s not really hurt getting disability.
  • The fact that we have 12M undocumented immigrants in our country not contributing to the revenue required to fund the system.  (it’s a problem but if you actually cared about the welfare portion of that issue, you’d just make them legal tomorrow so you could tax them and the problem would be smaller)
  • The fact that you have never been on government assistance because you work hard and have personal accountability.

This list isn’t exhaustive.  But it’s the flavor of rhetoric that is getting in the way of actually fixing the problem.  And though these things aren’t fair and can be frustrating, if you fill your thought space and debate with them, you don’t leave anything left for fixing the problem.  And that’s really the point.  Unless the point is just to have something to be perpetually dissatisfied about.  The rest of us are on to that by the way.  The 42% of the electorate that identifies as independent- we see it coming a mile away.  So do what we do.  Learn to tune it out and we may actually change something. Or don’t.  And stay angry.

 

 

 

 

4 replies »

  1. Welcome analysis. Keep repeating the message from different vantage points. Besides, we know where the money to fix the nation is, if we’re willing to stand together in going after it.

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  2. The article is really slanted to the left and makes some unfair and wrong assumptions. First the idea that we live forty years longer than they did in Washington’s time. This fact is always thrown out but is not really true. Infant mortality brought the life span down as well as many diseases that took the lives of children and others that no longer pose a problem. It is not that each of us lives longer, but more of us live longer. Saying that Tea party members don’t like immigrants and minorities is blatantly false and shows this is a left wing cut piece. This whole article is slanted to disparage the right and written to make it look unbiased. Also they are not opposed to illegals here now except for the fact that if they are made legal and the flow of illegal immigrants isn’t stopped, the ones here now will find themselves in the same position as the rest of us. New illegals will be hired to take their places. Caesar Chavez complained of the illegal alien problem. Very few on the right would begrudge the ones here now getting legal status once the influx of illegals has stopped. It is also true that the left register these illegals to vote which is why they oppose voter ID. The hate you say exists on the right is a false assumption based on Saul Alinsky tactics that if you say it people will believe it.

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  3. Thoughtful article. Unfortunately, fomenting anger results in faster and more deliberate action at the polls (as compared to working toward long term solutions). We’ve become a nation of people who default to a position of “what is being done for me?” instead of one that asks ourselves that wonderful question that JFK once asked of us as a people. I believe this is a direct function of the fact that our way of life has never really been threatened since the Cold War ended. And so we take that way of life for granted. Those of us who’ve spent time in 3rd world countries realize that with few exceptions, we Americans only ever have to worry about 1st world problems. And we don’t see the need to galvanize around serious issues (i.e. poverty) until we experience it, at which point we’ve lost our voice. In sum, I agree that we need to embrace some level of selflessness in order to become great again as a nation. It’s not a zero-sum game. Sacrifice reaps strength and virtue. At the end of the day, isn’t that the reason we’re all here? To grow as humans?

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  4. I thoroughly enjoyed this article and found it well-argued and sensible. A year after you posted it, though, I think perhaps the most important two sentences are these: “Which is the great thing about good data and facts. They’re right whether you believe them or not.” For those two sentences alone this article is worth reading.

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