Saturday, November 02, 2013

Transfer of wealth

Just heard a Social Security defender on Fox News say that for every $1 in benefits, Social Security payments generate $2 in the economy. What about the two workers paying in for every retiree drawing Social Security? Some working for minimum wage at Wal-Mart or McDonald’s.  How would they be spending that money taken from them? This is generational transfer from the young to the old, not drawing on an investment or "trust fund.”

Both the working poor and the upper income rich have their wealth transferred to the middle class, the group that is the beneficiary directly and indirectly of most government policies and taxes, many for the misnamed War on Poverty, (but Social Security is probably the oldest and best example). According to the catalog of federal domestic assistance, there are 2,199 Federal assistance programs and most benefit the middle class either directly, or by employment. HHS has 19 offices and 461 programs; each with its own bureaucracy. Please don't blame Obama for this, or any political party.

Does the federal government really need "To maintain and expand existing markets for dairy which are vital to the welfare of milk producers in the United States." We still have "separate but equal" when it comes to Indians and anyone who is 1/4 Indian, with federal grants galore, including Tribal Colleges and Universities. For 50 years the federal government has been funding "conciliation and mediation services" to local groups to reduce "tensions, conflicts, and civil disorders arising from actions, policies, and practices that are perceived to be based on race, ethnicity, or national origin." Imagine the community organizers who live well on that one! And yet 93% of murdered blacks are killed by other blacks, mostly young with no racial or ethnicity motives.

A tiny percentage of federal grant money goes to the poor; most goes to the middle class in the form of jobs, contracts, conferences, travel, research grants, academic salaries, indirect costs to the institution for utilities, staff, overhead (can be as high as 60% of the grant) and that doesn't even include the buildings that are required and the trades and unions who benefit. One Appalachian grant I read through (about $76,000,000 a year) supposedly was training 20,000 students a year; it’s been going on since 1965—why aren’t they all successful and free of poverty at that rate?  Because the money goes to the teachers, social workers, facilities, grant writers, conferences, etc.

I should know--I've made a very nice middle class living on special government contracts funneled through Ohio State or the state of Ohio. I have been employed on USAID funds, FIPSE money, JTPA,  Department of Aging of Ohio; I have published research funded by the state and federal government, which was then purchased by the institutions for which I worked, which were funded in part by the government; I have done some very nice travelling on your dime—Washington, DC, San Antonio, Kansas City, Seattle, Detroit and Chicago.  I also have a teacher's pension which pays far better than Social Security which non-government workers get. Don’t get me wrong--I worked hard, and you got your tax dollar’s worth, however, few poor people were lifted out of poverty.  Primarily the middle class benefited, including me.  Go to this website and type "library" or even something more exotic, like fashion or travel,  into the search window.



Anonymous said...

Not sure about the 2 workers?

Norma said...

Rounding and not using exact figures, let's say each worker contributes $7,400 a year in FICA and his employer does the same. Those 2 workers are paying the benefit of one retiree who is getting about $28,600 maximum. A teacher who may only work to age 55 and had summers off could be getting as much as $70,000