Political Poverty : Advocates of bigger government use “the poor” & “elderly” as human shields.

If there were a contest for the most misleading words used in politics, “poverty” should be one of the leading contenders for that title.

Each of us may have his own idea of what poverty means — especially those of us who grew up in poverty. But what poverty means politically and in the media is whatever the people who collect statistics choose to define as poverty.

This is not just a question of semantics. The whole future of the welfare state depends on how poverty is defined. “The poor” are the human shields behind whom advocates of ever bigger spending for ever bigger government advance toward their goal.

If poverty meant what most people think of as poverty — people “ill-clad, ill-housed, and ill-nourished,” in Franklin D. Roosevelt’s phrase — there would not be nearly enough people in poverty today to justify the vastly expanded powers and runaway spending of the federal government.

Robert Rector of the Heritage Foundation has for years examined what “the poor” of today actually have — and the economic facts completely undermine the political rhetoric.

Official data cited by Rector show that 80 percent of “poor” households have air conditioning today, which less than half the population of America had in 1970. Nearly three-quarters of households in poverty own a motor vehicle, and nearly one-third own more than one motor vehicle.

Virtually everyone living in “poverty,” as defined by the government, has color television, and most have cable or satellite TV. More than three-quarters have either a VCR or a DVD player, and nearly nine-tenths have a microwave oven.

As for being “ill-housed,” the average poor American has more living space than the general population — not just the poor population — of London, Paris, and other cities in Europe.

Various attempts have been made over the years to depict Americans in poverty as “ill-fed,” but the “hunger in America” campaigns that have enjoyed such political and media popularity have usually used some pretty creative methods and definitions.

Actual studies of “the poor” have found their intake of the necessary nutrients to be no less than that of others. In fact, obesity is slightly more prevalent among low-income people.

The real triumph of words over reality, however, is in expensive government programs for “the elderly,” including Medicare. The image often invoked is the person who is both ill and elderly, and who has to choose between food and medications.

It is great political theater. But, the most fundamental reality is that the average wealth of the elderly is some multiple of the average wealth owned by people in the other age brackets.

Why should the average taxpayer be subsidizing people who have much more wealth than they do?

If we are concerned about those particular elderly people who are in fact poor — as we are about other people who are genuinely poor, whatever their age might be — then we can simply confine our help to those who are poor by some reasonable means test. It would cost a fraction of what it costs to subsidize everybody who reaches a certain age.

But the political Left hates means tests. If government programs were confined to people who were genuinely poor in some meaningful sense, that would shrink the welfare state to a fraction of its current size. The Left would lose its human shields.

It is certainly true that the elderly are more likely to have more medical problems and larger medical expenses. But old age is not some unforeseeable misfortune. It is not only foreseeable but inevitable for those who do not die young.

It is one thing to keep people from suffering from unforeseeable things beyond their control. But it is something else to simply subsidize their necessities so that they can spend their money on other things and leave a larger estate to be passed on to their heirs.

People who say they want a government program because “I don’t want to be a burden to my children” apparently think it is all right to be a burden to other people’s children.

Among the runaway spending behind our current national-debt problems is the extravagant luxury of buying political rhetoric.

http://geekpolitics.com/what-do-azerbaijan-djibouti-and-suriname-have-in-common/

Our military calls projection defense.

In a world where real need dictated our actions our military would be spread out along our border with Mexico.

No more Nation Building Wars of choice until we get our house in order. The Neo Cons are destroying this country hand in hand with the globalists in Washington. China is laughing at us as we expend our military power on the bit players of the World.

http://www.americanreformation.org/AJCoalition/have_we_traded_away_america.htm

Have we Traded Away America’s Freedom and Independence?
There is a much more disturbing aspect of foreign trade that we are just beginning to understand. That is, the United States is no longer an independent and self-sufficient nation, as we now find ourselves completely reliant on foreign countries for our very survival. This overlooked aspect of our foreign trade strategy has now created a very dangerous situation that could adversely impact the future of our country.

Within our well-protected geographic borders we created the greatest scientific and technological brainpower that exists in the world. We also built the greatest industrial machine that can turn this knowledge and brainpower into valuable products, medicines, buildings, military equipment, highways and so forth. Except for oil, gems and a few food items, the U.S. could not be damaged or humbled by acts emanating from foreign countries. Americans controlled virtually all aspects of their destiny and could peacefully sleep at night knowing that their family and future were safe.

Within the last 10-15 years the United States launched into an aggressive global trade strategy. Foreign trade barriers, which once protected our precious borders from low cost foreign countries, were gradually removed. As a result, a large number of foreign companies started pouring their low-cost products and services into the lucrative U.S. marketplace. Many U.S. companies were caught off guard and went out of business. The companies that were lucky enough to survive have now figured out what they have to do to fend off these low cost invaders. They must quickly move their own supplier base, or even their own operations, to impoverished countries in order to capture the same cost savings.

The end result is the industrial foundation of the United States is collapsing, and the service sector is following right behind the industrial sector. The United States industrial machine, which took hundreds of years to painstakingly construct, is now being quickly dismantled and shipped to low-cost foreign countries. Entire industries have now been substantially wiped out in the United States, and the industrial infrastructure that once drove our country is disappearing. The glorious plants that once spread throughout our countryside have now been razed to the ground or left to deteriorate like a ghost town that once teamed with energy and life.

The best of our technologies and expert knowledge is also starting to move out of the country right along with the exiting industry. Countries such as China, India, Mexico, Brazil and Korea are devouring the intellectual knowledge base that took us years to develop. For example, much of the computer and telecommunications equipment used in the U.S. is now being manufactured offshore. At the same time, our research and development centers that design these new technologies are also being moved into countries such as India.

One of the more insane "Public Service Ads" that I hear on the radio states as fact that "One in six Americans struggle with hunger."

This seemed like a bald faced lie to me, so I tried to determine where it came from.

What happened is that with all the welfare in America, almost no one is hungry unless it is by choice or if it is children that are being abused. During the Clinton administration the left was appalled that they no longer had this lever, so they came up with another definition called "food security". The department of agriculture does a survey of 50,000 households every year. It asks questions such as:

"In the last 12 months, did you or other adults in the household ever cut the size of your meals or skip meals because there wasn’t enough money for food?

Based on the responses, the survey concludes that about one out of six households in the United States experienced some form of "food insecurity" during the last year.

There is no objective measurement to determine if the people are actually obtaining sufficient calories or if they are eating too much. It is entirely based on subjective answers to questions.

So that is where the number comes from. A politically based definition designed to reinforce the idea that people in America are not getting enough to eat.

So when you hear that one in six Americans struggle with hunger, remember what they are really saying is that one in six American households said that they were not able to buy exactly the food they wanted by the end of the month some time during the last year.

All of the factors mentioned have had an effect. However, so has the impact of the welfare state and an aging society. More than half of the federal budget is on automatic pilot. Medicare alone is consuming almost 15% of the non-entitlement portion of the federal budget. i.e., the General Fund is picking up 75% of the costs of Medicare Parts B and D. And the fact that Medicare Part A (HI trust fund) and SS are both running shortfalls and must cash in their IOUs to make up the difference means that more and more of the budget will go to the entitlement programs.

10,000 people a day are retiring and will continue to do so for the next 20 years. By 2030 one in five Americans will be 65 or older, twice what it is now. And by 2030 there will be only two workers for every retiree.

Defense will become the target for massive reduction to keep the welfare state going for a little while longer. The politicians are reluctant to take on the entitlement programs and means tested welfare. There are 54 million on SS, 47 million on Medicare, 60 million on Medicaid, and 44 million on food stamps. There is a huge constituency for these programs.

The U.S. adds one international migrant (net) every 36 seconds. Immigrants account for one in 8 U.S. residents, the highest level in more than 80 years. In 1970 it was one in 21; in 1980 it was one in 16; and in 1990 it was one in 13. In a decade, it will be one in 7, the highest it has been in our history. And by 2050, one in 5 residents of the U.S. will be foreign-born.

Currently, 1.6 million legal and illegal immigrants settle in the country each year; 350,000 immigrants leave each year, resulting in a net immigration of 1.25 million. Since 1970, the U.S. population has increased from 203 million to 310 million, i.e., over 100 million. In the next 40 years, the population will increase by 130 million to 440 million. Three-quarters of the increase in our population since 1970 and the projected increase will be the result of immigration. The U.S., the world’s third most populous nation, has the highest annual rate of population growth of any developed country in the world, i.e., 0.977 percent (2010 estimate), principally due to immigration.

57% of immigrant headed households are on welfare. We are importing poverty and future Dem voters. Demography is destiny. Milton Friedman said, “You cannot simultaneously have free immigration and a welfare state.” We have both.

This new Republican meme that Social Security is welfare is dishonest and as politicians like West and Rubio are finding out...Try and reduce retirement benefits to millions of seniors who have payed nearly ten percent of their income all of their life into it and you will lose. Has anyone ever won office running on a pledge to end..or even cut SS? As far as welfare goes...end it for the big corporations and the banks. The boomers are still the largest demographic voting bloc. Many of them see their SS to be as legitimate as any IRA or 401k.

By 2030 most of the boomers will be dead.

Demographics will change in ways that can’t be predicted.

TPTB seem to have decided to replace the large demographic leaving the stage with immigrants. SS may not be sustainable at the current rate but there are other ways to deal with that problem without peeing on the third rail of politics.

Spending peoples retirement money on nation building wars is an immoral act. There would be no shortfall if the government payed back the money to the trust fund that it has borrowed to wage these endless off budget police actions.

If the Banks are “too big to fail” thus receiving trillions of taxpayers money then surely SS is also “too big to fail.”

SS is not welfare, it is a Ponzi scheme. Most of us on it now have received far more than we ever put in. No one is suggesting to reduce the benefits of those currently on it now or close to retirement. SS will have to be reformed or it will no longer exist. It is already running in the red and the shortfalls will get greater as the baby boomers retire.

The contributions that someone puts into the system don't belong to them. See Flemming vs Nestor the SCOTUS decision on the issue. In fact, you could put the maximum into the system for 50 years not collect a dime, except for a small burial allowance, should you die before collecting benefits.

And the government can change the rules of the game any time they want like what they did in 1983 raising the retirement age for full benefits from 65 to 67. I was affected by that change.

Why Social Security is a Ponzi Scheme

Has anyone ever won office running on a pledge to end..or even cut SS?

No, they have run on a pledge to reform it. And this is not just about winning elections. SS is broke and can't afford to keep the promises it has made to future recipients. It represents an unfunded liability of $17 trillion.

By 2030 most of the boomers will be dead. Demographics will change in ways that can’t be predicted.

You are entitled to your own opinion, not your own facts. The United States Census Bureau considers a baby boomer to be someone born during the demographic birth boom between 1946 and 1964, including 1964. Most of the baby boomers will not be dead considering the fact that the average life expectancy is 78. And demographics can be predicted with some accuracy. The Census Bureau, insurance companies, etc. do it all the time.

Bureau of the Census: An Older and More Diverse Nation by Midcentury

The fixes for SS are fairly simple. You can raise the payroll tax or change the retirement age or alter the formulae for computation of benefits and COLA or any combinaion thereof. You could also privatize most of it except for a small defined benefit program that covers survivor and disability payments.

There has been no money stolen from the trust funds. They contain non-market, interest bearing T-bills in the amount of money that reprsent previous "surpluses." The CBO described the trust funds as follows:

"In total, the federal budget has more than 200 trust funds, although most of the money is credited to fewer than a dozen of them. Among the largest trust funds are the two for Social Security (the Old-Age and Survivors Insurance Trust Fund and the Disability Insurance [DI] Trust Fund) and the funds dedicated to Medicare’s Hospital Insurance (HI) program (also known as Part A), civil service retirement, and military retirement."

"When a trust fund receives payroll taxes or other income that is not needed to pay benefits immediately, the Treasury credits the fund and uses the excess cash to reduce the amount of new federal borrowing that is needed to finance the governmentwide deficit. That is, if other tax and spending policies are unchanged, the government borrows less from the public than it would in the absence of those excess funds. The reverse is the case when revenues for a trust fund program fall short of expenses. Thus, the balances of trust funds are not a measure of resources available to pay future obligations for the respective programs; those resources will need to come from federal revenues or additional borrowing in the years those obligations are due."

If the Banks are “too big to fail” thus receiving trillions of taxpayers money then surely SS is also “too big to fail.”

If the people decide that Medicare and SS are the most important priority, then money will have to come from somewhere. We borrow 42 cents of every federal dollar spent now.

Some real budget cuts....

Oil subsidies

4 billion a year

David W. Kreutzer, an energy economist at Heritage Foundation, said the government should stop subsidizing all forms of energy. “We would like to get rid of all subsidies,” Dr. Kreutzer said. “We know that petroleum and coal survive just fine in places where there are no subsidies. I don’t know if that’s true for wind and solar now, but someday it will be, when the price comes down.”

http://blogs.forbes.com/benzingainsights/2011/02/01/should-the-government-really-end-oil-subsidies/

agricultural subsidies 95 billion

In the past five years alone, the U.S. government has handed out more than $95 billion in agricultural subsidies.
http://www.washingtonpost.com/wpsrv/nation/interactives/farmaid/

War on Drugs

40 billion a year.

http://www.washingtonpost.com/wp-srv/nation/interactives/farmaid/

military waste

28 billion

Over the last three years, the Pentagon disposed of $33 billion in excess equipment, of which $4 billion was reported to be in new, unused, or excellent condition.

Homeland Security.

56 billion a year.

If the FBI and CIA don’t work then combine them.
Or eliminate them.

The Department of Homeland Security (DHS) unveiled its $56.3 billion fiscal year 2011 budget request today.

http://www.dhs.gov/ynews/releases/pr_1265049379725.shtm

DEA...1.5 billion a year

BATF...1.3 billion a year.

Here is a list of Federal Agencies.

http://www.usa.gov/Agencies/Federal/All_Agencies/index.shtml

Programs that cut aid to the poor and elderly and children are all political third rails. First end corporate welfare and offshore corporate tax shelters that allow corporations like General Electric to pay no U.S. taxes at all.

1) Exxon Mobil made $19 billion in profits in 2009. Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings.

2) Bank of America received a $1.9 billion tax refund from the IRS last year, although it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion.

3) Over the past five years, while General Electric made $26 billion in profits in the United States, it received a $4.1 billion refund from the IRS.

4) Chevron received a $19 million refund from the IRS last year after it made $10 billion in profits in 2009.

5) Boeing, which received a $30 billion contract from the Pentagon to build 179 airborne tankers, got a $124 million refund from the IRS last year.

6) Valero Energy, the 25th largest company in America with $68 billion in sales last year received a $157 million tax refund check from the IRS and, over the past three years, it received a $134 million tax break from the oil and gas manufacturing tax deduction.

7) Goldman Sachs in 2008 only paid 1.1 percent of its income in taxes even though it earned a profit of $2.3 billion and received an almost $800 billion from the Federal Reserve and U.S. Treasury Department.

8) Citigroup last year made more than $4 billion in profits but paid no federal income taxes. It received a $2.5 trillion bailout from the Federal Reserve and U.S. Treasury.

9) ConocoPhillips, the fifth largest oil company in the United States, made $16 billion in profits from 2007 through 2009, but received $451 million in tax breaks through the oil and gas manufacturing deduction.

10) Over the past five years, Carnival Cruise Lines made more than $11 billion in profits, but its federal income tax rate during those years was just 1.1 percent.

The United States has lost an average of 50,000 manufacturing jobs per month since China joined the World Trade Organization in 2001.

http://theeconomiccollapseblog.com/archives/how-can-america-create-wealth-if-our-industrial-base-is-destroyed-50000-manufacturing-jobs-have-been-lost-every-month-since-2001

If we continue to run budget deficits of over $1 trillion those cuts you listed won't amount to much in a close to $4 trillion budget. In fact, if interest rates return to their historic rates from the artifically low ones today, we could be spending up to $1 trillion annually on debt servicing costs alone.

If we don't reform Medicare, by 2020, Medicare deficits will claim one in every five federal tax dollars that are not already dedicated to Medicare and Social Security. This means that in just 9 years the federal government will have to stop doing one in every five things it does today if taxes are to remain at their current level and projected Medicare benefits are paid on behalf of the disabled and the elderly. By 2030, the deficits in Medicare will claim one in every three general revenue dollars; by 2050, they will claim one in every two.

You can rail against the big coporations, but they don't pay taxes. They just pass on the costs to the consumer. And many of the largest pension and mutual funds invest in them. This means reduced profits, which affect capital gains and dividends. Instead of trying out how to tax them more, lets reduce taxes and encourage companies and corporations to invest and locate in America. Do you think there is a reason why companies are fleeing places like NY and CA and relocating to places like VA and Texas?

As far as eliminating government waste is concerned, a recurring mantra I have heard during my 36 years as an employee of the USG, it never works. You really need to eliminate programs and agencies, many of which have constituents in Congress and the states. When the USG controls up to 40% of the economy, it is very difficult to get off the gravy train.

The main drivers of our debt and fiscal problems are the entitlement programs and means tested welfare. They are consuming more and more of the budget. They are unsustainable. The question is whether we have the political will to change/eliminate them or will it take a collapse of the economy to force the needed changes.

Do you think there is a reason why companies are fleeing places like NY and CA and relocating to places like VA and Texas?

Yes they flee to other countries for lower labor costs. If taxes were the reason they offshore then we would be seeing benefits from the largest tax cut in history from these benefiting companies in the way of jobs here. That has not happened so the supposed "job creation" corporations claim will come about as a result of huge tax cuts on them are false claims.

A repeal of the Bush tax cuts will do the same for our economy as 4 trillion dollars in cuts to our social safety net. One of the big surprises of 2010 is that the protectionist dog didn’t bark. But that will come under pressure.

What are the CEOs thinking?

The good news—and the bad news—for America is that the nation’s own super-elite is rapidly adjusting to this more global perspective. The U.S.-based CEO of one of the world’s largest hedge funds told me that his firm’s investment committee often discusses the question of who wins and who loses in today’s economy. In a recent internal debate, he said, one of his senior colleagues had argued that the hollowing-out of the American middle class didn’t really matter. “His point was that if the transformation of the world economy lifts four people in China and India out of poverty and into the middle class, and meanwhile means one American drops out of the middle class, that’s not such a bad trade,” the CEO recalled.

I heard a similar sentiment from the Taiwanese-born, 30-something CFO of a U.S. Internet company. A gentle, unpretentious man who went from public school to Harvard, he’s nonetheless not terribly sympathetic to the complaints of the American middle class. “We demand a higher paycheck than the rest of the world,” he told me. “So if you’re going to demand 10 times the paycheck, you need to deliver 10 times the value. It sounds harsh, but maybe people in the middle class need to decide to take a pay cut.”

At last summer’s Aspen Ideas Festival, Michael Splinter, CEO of the Silicon Valley green-tech firm Applied Materials, said that if he were starting from scratch, only 20 percent of his workforce would be domestic. “This year, almost 90 percent of our sales will be outside the U.S.,” he explained. “The pull to be close to the customers—most of them in Asia—is enormous.” Speaking at the same conference, Thomas Wilson, CEO of Allstate, also lamented this global reality: “I can get [workers] anywhere in the world. It is a problem for America, but it is not necessarily a problem for American business … American businesses will adapt.”

These guys made theirs and now they want to turn their backs on the country which gave them the ability to get where they are. The middle class didn't start this class war.

Google "wage stagnation".

Since when are VA and Texas other countries?

I have no idea what tax cut you are talking about? The Bush tax cuts, which were mainly for individuals? Companies move overseas not only for lower labor costs, but also there is less regulation, union influence, and the growing uncertainty here when it comes to Congress passing additional restraints and conditions on business. How much damage is EPA doing to our energy industry? What effect will Obamacare have on business? Dodd-Frank?

Our "social safety net" has been an anchor on our economy expanding the role of government and creating a culture of dependency. This is not the stuff of capitalism and entrepreneurship. Despite all their rhetoric, Obama and the Dems have been bought and paid for by corporate interests. They are the biggest contributors to the Dems. The corporations are not stupid. They know that the more control the government takes over our economy, the more important it will be to get in bed with whoever is in power. GE is a good example. They know the Golden Rule, i.e., "He who has the gold, rules."

These guys made theirs and now they want to turn their backs on the country which gave them the ability to get where they are. The middle class didn't start this class war.

These are businessmen who have a fiduciary duty to their companies and shareholders. They are in business to make money not to push some idea of social justice. Ralph Nader contacted about 100 of America's largest corporations and asked them to have the Pledge of Allegiance at the openning of the shareholder meetings. Only one agreed to do so.

Instead of wringing our hands about the patriotism of corporations, we ought to be figuring out ways to incentivize investment in this country. There are plenty of foreign companies in the US, e.g., automobile industry. There are over 600 corporations headquartered in Ireland in a small building. Or located in the Cayman Islands? Why?

I have been to China and seen how international coporations are operating there. They are sending entire factories with the latest equipment. China has an educated work force, no union problems, no stifling environmental regulations, low taxes, and other incentives to locate there. We may not be able to compete with the labor costs, but we sure as hell can change our regulatory environment, taxes, etc. We can be competitive and welcoming to business.

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