I Guess I'm Still Stuck On Stupid

I have made the mistake of peeking at the NY Times headline story before the caffeine has kicked in fully.  Thier gist seems to be that the "less government" crowd is a bunch of hypocrites, but there is a glaring problem with their numbers.  Or at least, I am glaring - here we go:

Even Critics of Safety Net Increasingly Depend on It

By BINYAMIN APPELBAUM and ROBERT GEBELOFF

LINDSTROM, Minn. — 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.

Wait - Medicare is now a "safety net" program? I thought that, like Social Security, it was an earned benefit - we all paid our taxes, and we are all eligible.  Medicaid is means-tested; Medicare is not.

Pressing on, this problem re-emerges quickly:

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.

The reporters addressed my question in the next paragraph, so my aneurysm subsided:

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.

So if most of the benefits are for a non-safety net program, why are we reading about it?  The fog thickens here:

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.

Well I need to track down that CBO analysis, because if it is counting Social Security and Medicare then no kidding - the aging baby boom is undoubtedly hoovering up a larger share of benefits in 2007 than in 1979 [the obvious is true - see UPDATE].  That tells me nothing about, for example, the impact of the 1996 welfare reform, but it makes a great story for the Ministry of Truth.

Well, the day is yoing, and following Dan Rather I say "Keurig!".

IF I MAKE IT BACK... Eventually I hope to develop two points - first, the Democrats have long wanted to deliver middle-class entitlements paid for by "the rich", because that is where the votes are.  Healthcare and college subsidies are two biggies for them.

Secondly, someone (IIRC, Ms. McArdle herself) had a cogent post noting that what looks like a safety net on the way down can look like absurdly high marginal tax rates on the way back up.  If someone falls from $40,000 to $20,000 in income and picks up $15,000 in benefits on the way down they (presumably) lose those benefits as their situation improves.  That creates a high effective rate and greatly reduces the incentive to get back to work.

One solution has been to move the cut-offs and break points up into middle class territory, which of course leads to the sort of headlines the Times delivers today.

UPDATE:  From Sally Pipes of Forbes, last December:

The Congressional Budget Office just released a major new investigation into household income trends over the last three decades. Researchers found that while the total amount of benefits paid out by government social safety-net programs rose between 1979 and 2007, the share going to the poor actually shrank.

In other words, relatively affluent members of American society now consume a bigger share of government benefits. As the CBO put it, “government transfer payments are . . . moving away from households in the lower part of the income scale.”

Why? The CBO continued: “That shift reflects the growth in spending for programs focused on the elderly population (such as Social Security and Medicare), in which benefits are not limited to low-income households.”

And from the CBO report on income inequality:

Effects of Transfers on Different Income Groups. The shifts in the relative importance of different transfer programs since 1979 moved the distribution of transfer benefits away from households in the lower part of the income spectrum to some extent (see Figure 14 on page 24). Rapid growth in Medicare, which is not means tested (in other words, not provided to people based on a test of need determined by their income and assets), tended to shift more transfer income to middle- and upper-income households. At the same time, spending on Aid to Families with Dependent Children and its successor, Temporary Assistance for Needy Families, has declined relative to market income; benefits from those means-tested programs are heavily concentrated at the bottom of the income scale. As a result, households in the lowest-income quintile received 54 percent of federal transfer payments in 1979 and 36 percent in 2007.

Comments

[peter]

Fairy tales may come true -- they can happen to you,
when you're yoing at heart.

I love the way the Book Review section of the Slimes actually mentions who Mark Levin is-- a talk show host and president of Landmark Legal Foundation-- while still utterly refusing to review his books.

[PeteBog]

If you're paying for the pizza, you might as well take a slice. That's the other part of the big government agenda. One is to create a permanent class of non-paying clients while the other is to make sure everyone else takes advantage of entitlements they're paying for.

[Cecil Turner]

If you're paying for the pizza, you might as well take a slice.

Exactly. Then we'll means-test to make sure everyone's slice is exactly the same (except for those pigs who are more equal than others).

Resistance is futile. Thoughtcrime is death.

[narciso]

Yesterday's fishwrap had a fine little tale about the serf's collar, our state is being
fitted for.

[Threadkiller]

Mitt is, or is not, worried about these people.

[narciso]

Meanwhile Seymour must be fed,

http://www.miamiherald.com/2012/02/11/2636918/tallahassee-tax-cuts-put-squeeze.html

[stan]

Wm Buckley addressed this a long time ago. It is not the least bit hypocritical to argue about what the law should be while living in accord with what the law currently is.

One would have to be so stupid as to work for the NY Times not to understand this.

[narciso]

They who are at the sufferance of a Mexican Oligarch, are too dim to get it.

[Jack is Back!]

Frederik von Hayek was unavailable for comment.

Wasn't Heritage that released a recent study that shows on average the takers having a larger income than the makers. Plus that 49% of all Americans receive some form of Federal benefit currently.

We are at our Rubicon and Obama Caesar is ready to cross. Then instead of giving to Caesar what is his and God what is God's, we will be giving and receiving but God will be left out. At least that's the plan.

[Captain Hate]

Sarah Palin on FNS stating that the four Repub candidates need to articulate a positive vision of how they'd govern rather than attack each other.

[Threadkiller]

But..., this one goes to eleven.

http://www.forbes.com/sites/peterferrara/2012/02/09/dont-be-fooled-the-obama-unemployment-rate-is-11/

[Danube of Thought]

Change "depend on" to "get benefits from." No one turns them down if they're available, and why should they? Perhaps in the case of Warren Buffet they might say "Even critic of low cap gain rate depends on it."

But I doubt it.

[Danube of Thought]

Minus 13 at Raz today.

[Danube of Thought]

If Joe Girardi is opposed to the Designated Hitter Rule, does that mean he should send his pitcher up to hit?

[Captain Hate]

Bill Kristol and Kimberly Strassel are skewering the Duke and Duke rapid response team for having their copy of Word Perfect infected with a virus to prevent them from framing the Catholic situation in how it applies to us all.

[narciso]

They were having their squash rackets refitted at the time, Captain, you know how
arduous that is.

[Porchlight]

So by the lefty argument, those rich folks like Buffett who think they ought to be paying more in taxes, should be writing extra checks to the IRS every year. Anything short of that is pure hypocrisy, right?

[Frau Argwohn]

Thanks for sharing the Forbes find, TK. I sometimes wonder about "truth and the American Way."

[Captain Hate]

So do the Times mavens think that the Earned Income tax credit should only be available to people who are in favor of higher taxes? Or for employees of companies that lose as much money as the House that Pinch is burning down?

[narciso]

The House of Conquistador, always figures things this way,

[narciso]

Ned Rooney always tries to explain the facts to them, fails utterly;

[chip]

Most Americans don't see where this is going. Here in Canada we have universal health care, which is just another way of saying that you're forbidden to use a private doctor.

After a decade or two, society loses all memory of private care and starts to see the govt as the only source of comfort. The choices in elections come down between more spending on govt health care and a lot more.

Usually it's a lot more because Canadians are waiting several months to see specialists, wait over a year for surgeries and are sometimes lucky to have a GP.

But we don't remember what private health care can do, and besides, the care is free at point of use, so most Canadians think it's just free, even as health care costs are rising just as fast as in the US and health spending now eats up half of our provincial budgets. (Ontario, our biggest province btw, has a per capita deficit and debt larger than California's).

So big govt is now like cancer of the brain stem. It's attached at the cellular level can cannot be removed. It can only grow and that unrestrained growth will eventually kill us. But that's okay, because there are no other choices.

[Old Lurker]

Thanks Chip. Well said.

[Fred Beloit]

So the NYT finally admits what conservatives have been saying for years is true: Government give-aways create dependency in the population.

[NK]

Chip-- thanks for the reminder of where the USA is heading. AND-- Canada has enegy wealth (on a per capita basis) much greater than the US, AND a SMART Prime Minister. Can we trade 'Bam for Harper-- we'll let a Canadian team win the Stanley Cup in 2012. C'mon, please.

[Clarice]

TM and Pete Bog get instalanched! Yeah!

[Ignatz]

--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.--

Strictly speaking the only one of those which is purely social safety net material, AKA welfare, is the last one about children.
You don't get disability unless you paid into SS. There is SSI for the disabled who never worked but they are a pretty small minority. Unemployment is at least partially paid for directly by the unemployed when they were working. And veterans earned whatever meager benefits they get.
Now whether any of those programs should exist (no) or are even constitutional as a Federal mandate (IMO another, no) is another argument but virtually every one they mentioned is at some level an earned benefit not pure welfare.

[Ignatz]

--Their gist seems to be that the "less government" crowd is a bunch of hypocrites...--

And because the Times is in no way biased or left leaning, tomorrow will feature a front page story on the hypocrisy of lefty billionaires claiming the country will go down in flames unless they're taxed more but refuse to cough up one extra penny unless compelled to by the government or will only do the good and patriotic thing if Mitch McConnell does it first.
Seems to me Warren Buffet could afford to pay the $1 billion in back taxes Berkshire owes out of his own kitty a whole lot easier than Mr. Gulbranson, who has most of his disposable income taxed away already, could afford to forgo the EITC. Who is the bigger hypocrite?

[Threadkiller]

Ol, I think chip has answered your query from the other thread.

--"the care is free at point of use, so most Canadians think it's just free,"--

Could there be a better summary of the problem? I doubt it. Thanks chip.

[Threadkiller]

I see you saw what I saw, OL.

[Porchlight]

One is to create a permanent class of non-paying clients while the other is to make sure everyone else takes advantage of entitlements they're paying for.

It's the "use it or lose it" mentality in bureaucracies. They say: We need to spend this money we've been given on something, even if it's useless new programs, so that we'll be given more next year, and anything less than more is "cutting." And waste is never threatened by this "cutting" - only "essential services."

No smart liberal would run their household this way, or even their company, should they own one. But they want to run the government this way - as well as every educational institution they can get their hands on. Because who cares when it's OPM and it's all for the "public good?"

[SongDog]

Just a minor correction to the article. Medicare itself may not be means tested in the sense that Medicaid is, but the premiums for Medicare Part B most certainly are, ranging up to about four times as high for upper income folks as the base rate, now around $99/month.

[East Bay Jay]

Fareed had George Soros on this morning. One on One. Maybe One on 1/3rd. It's more of a monologue.

Turns out that Obama has no hand in the current economic predicament of the country, GS donates to economic causes he believes in even if it will hurt him financially, and the economy would come roaring back if the Republicans would stop trying to tank the economy for naked political reasons. I wouldn't have figured any of that out without some help so thanks, Fareed.

[narciso]

You almost couldn't see the puppet strings,
there, Jay, it was so effortless,

[Danube of Thought]

I fully agree with Steyn and our Canadian friend Chip. As somebody said yesterday, Obama is at the Rubicon this year, and if he crosses it this country can never go back.

[Eric]

Another dastardly thing about this article, and I've seen Krugman describe Medicare in this misleading way, is this "Few federal programs are more popular than Medicare which...assures a minimum quality of life for older Americans."

This is the biggest tip of the hat to the writer's bias. Medicare most certainly does not assure a quality of life for older Americans, it (part A, the most expensive part) is simply, according to CMS:
"...hospital insurance that helps cover inpatient care in hospitals, skilled nursing facility, hospice, and home health care."

No news organization should EVER be able to describe Medicare otherwise without being forced to issue a correction.

[jimmyk]

the care is free at point of use, so most Canadians think it's just free

I see this in recruiting people from Canada and the UK. They see that they actually have to pay for health insurance here, but don't necessarily see the connection to the lower tax rates and better quality that you get in the U.S.

I wish tax bills were itemized like your credit card bill. Then it might actually register that the "free" stuff actually isn't.

[Eric]

To add to the above: Government programs should be described in the narrow terms of their definitions. That's the only way reform can happen.

Otherwise we allow proponents of a government provided good life for all to conflate "quality of life" with whatever the program in question provides.

There is no doubt income (in this case via social security INSURANCE) and health care coverage (in this case via Medicare INSURANCE) play very important roles in maintaining some level of quality of life (hierarchy of needs and all that) but they are not, themselves, tantamount to a quality life. The idea that income or health care are assurances of a quality life is poppycock.

[Clarice]

well, Jimmy K, if this continues and is not overturned by SCOTUS, let's set up an airline/hospital op in India that flies people there for excellent affordable private healthcare.

[narciso]

What Jay was referring to;

http://newsbusters.org/blogs/noel-sheppard/2012/02/12/fareed-zakaria-asks-george-soros-will-you-create-super-pac-help-presi

[narciso]

'It all depends on the meaning of the word is'

http://newsbusters.org/blogs/scott-whitlock/2012/02/09/evan-thomas-and-chris-matthews-serial-adulterer-jfk-and-jackie-had-g

[Frodo Baggins]

Medicare is means tested. When you are working the more you make the more you pay. When you get to be 65, if you have "too much income" you get to pay surcharges for Part B and Part D.

[Captain Hate]

What Jay was referring to

Just wondering, did Fareed ask GS if there's any truth that he was a Nazi collaborator and why he doesn't deserve the same legal treatment as John Demjanjuk?

[jimmyk]

if this continues and is not overturned by SCOTUS, let's set up an airline/hospital op in India

Could we make it some place like Aruba or Jamaica with nice beaches and a bit closer to home?

[Kevin]

Just a minor point, but Medicare is only an "earned benefit" if you think that paying in a buck and getting it back plus two more out of my pocket is "earning" something. It's just a slightly less egregious giveaway is all.

"But Medicare’s situation is even more dire because a worker earning average wages still contributes only $1 in Medicare taxes for every $3 in benefits likely to be received in retirement."

You could argue that all insurance works like that, but private insurers know how to read actuarial tables and raise rates (admittedly, also to the detriment of subscribers) and anyway, if you think Medicare is acceptable you may as well give up on arguing against Obamacare, which is at least more fiscally sustainable in pursuit of the same goals.

[Clarice]

Only if Indian doctors and aides are willing to move there and work for their at home wages.

The private hospitals there already cater to middle class Brits who cannot tolerate the filth and incompetence of the NHS.

[jimmyk]

Medicare is a safety net but not in the sense the NY Times means. It has become a huge income redistribution program. Think of someone making $200,000/year (not "rich") having to pay $5,800 per year toward Medicare, and basically getting the same benefit someone making $50,000 year and paying $1,450. Someone making $1M/year pays $29,000 annually.

[jimmyk]

Interesting, Clarice, because I've heard some unflattering things about Indian hospitals, but maybe there are some that are better and specialize in treating NHS refugees.

But any Carribean island could get rich overnight under Obamacare if it lets itself become a haven for doctors and patients fleeing the U.S. I will volunteer as a consultant.

[Eric]

To Kevin re: earned benefit vs insurance.

As I ranted before I think the winning reform argument is to, and I know this sounds crazy, consider government programs against their actual definitions. Medicare is insurance. That's CMS's definition. As you say, they just have trouble with actuarial tables.

[Clarice]

It would , Jimmy. Worth scouting it out.. Granada is close and in fact as you might recall has a medical school for Americans on site.(Of course, I prefer Indian doctors--the ones in the private hospitals were trained at the best universities in the UK and US).

[Eric]

Jimmy K re: income redistribution / transfer

Medicare Part A (not the voluntary parts) is income redistribution, just not in the why you describe. it is perfectly fair for a rich beneficiary to receive the same benefit as a poor one: That's the way insurance works. You don't complain that it costs a rich person the same amount (assuming all ther factors are equal) to insure their car as a poor person, right?

No, Medicare is an income transfer from the young (who are not eligible for benefits and may never be) to the old. At first glance you could claim that car insurance is by different: You may never use it yourself but you pay for other people's wrecks. The key difference is that, with car insurance and all others, you, by virtue of paying your monthly premium, are insured in the present day.

[Rick Ballard]

"No, Medicare is an income transfer from the young (who are not eligible for benefits and may never be) to the old."

All we have to do to accept that proposal is to ignore the time value of money and the fact that the "old" have 40 years of contributions in the pot.

Some of us can actually count, a few can actually calculate NPV. Give me my contributions (including their time value based upon 30 year Treasuries) back and you may keep all the "savings" which accrue from my agreeing to not use any Medicare benefits.

[jimmyk]

it is perfectly fair for a rich beneficiary to receive the same benefit as a poor one: That's the way insurance works. You don't complain that it costs a rich person the same amount (assuming all ther factors are equal) to insure their car as a poor person, right?

No, my point was that the rich pay much more into the system over their working lives. You may view that as "perfectly fair," but it is income redistribution nonetheless.

[Clarice]

Jimmy, last post on the subject--but just one of the many Indian medical travel outfits.http://www.indian-medical-tourism.com/

[Gary Smith]

Your second sentence reads "Thier gist seems to be that the 'less government' crowd is a bunch of hypocrites, but their is a glaring problem with their numbers."

You wrote that sentence because you're stupid, and because you're a bad writer. What you meant to write was "Their gist seems to be that the 'less government' crowd is a bunch of hypocrites, but there is a glaring problem with their numbers."

You're welcome, asshole.

[Ignatz]

TM could presumably use spellcheck and a little proofreading to fix his problem, Gary.
I hope you can find a solution the prospects.

[Ignatz]

Frickin typepad;

"I hope you can find a solution to yours but am not too sanguine about the prospects"

is what that last line read when I hit post.

[Eric]

JimmyK- I see. Sorry for misreading you.

[Cecil Turner]

OOoooh, a spellcheck Nazi. Thanks for coming out.

[Jim Rhoads a/k/a vnjagvet]

When they can't dent substance, they attack form. A sure sign of position weakness.

[jo]

You really help you case by misspelling "their" in your second sentence. Is our children learning?

[Cecil Turner]

Followed by a slower, less accurate one who doesn't bother to read the comments.

There's a single parenthetical comma in there too. Anyone want to get some of that?

[Jim Rhoads a/k/a vnjagvet]

Searching for typos is such a rewarding taks.

[pagar]

"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."

Hurrah for all of those who help to oust long serving Democrat congressmen. Or those who help oust short-serving Democrat.

[jo]

"You really help you case by misspelling "their" in your second sentence. "

Nice job stepping on your own dick there, jackoff.

[daddy]

"I don't give a damn for a man that can only spell a word one way." —Mark Twain

[MarkJ]

"Even Critics of Safety Net Increasingly Depend on It"

Let's also try this: "Even Critics of Nazi Government Increasingly Depend on It"

[bgates]

Too foreign, MarkJ.

"Frederick Douglass writes, publishes a newspaper, and offers frequent speaking engagements. He has offered support to Republican extremists who want to end some of this country's oldest institutions."

"Yet for several decades, Douglass and his entire family were not too proud to live in housing and eat meals provided by their Democratic masters as part of the system established to safeguard the economic health of our nation and to guarantee them a truly minimum quality of life."

[Ignatz]

Another winner from bgates.

[Clarice]

No kidding, Iggie.