The Middle Class Yarn spun to frighten you

It's not exactly fake news, but it's misleading--the story you hear that the middle class is shrinking and so many more people are using government benefits because of the gap between the very wealthy and the "others." There are three things to consider:

1) demographics/age,

2) marriage or the lack of it, and

3) expansion of federal benefits from the poor and deserving to the middle class.

Rejoice, patriots. It's not true. The middle class is only shrinking because so many people have moved up to the next quintile! Have you ever driven to the suburban areas of Columbus (or the city where you live)--I can't believe the homes, schools, shopping centers, churches, gyms, parts, etc. And the new high rise housing in the central city for all those millennials willing to pay the apartment costs.

Also, as the boomers retire, they are now living on their pensions and investments (the very wealth Elizabeth Warren wants to go after), plus they are drawing Social Security. And guess what, a two parent household with both adults working has a much higher income than a one parent household who is most likely a woman. Two adults in a home have more time to distribute to the children to see to it they are educated and well-fed. It's amazing how many "experts" in socialist think tanks switch to "household" to show poverty rates and don't factor in $30,000 in transferred benefits like EITC, SNAP and Section 8.

We've been in 4 of the 5 quintiles in our 58 years together, as have many our age. We have 5 streams of income, as do many our age--some if they have military benefits have 6 or 7. We're certainly not suffering, but as retirees, we have less INCOME than when we were DINKs, but more WEALTH because we have lived frugally and invested or lived on one income. Warren wants to punish us for living on less when we were in our 40s.

Left of center think tanks crunch the numbers and in horror say, the sky if falling. There's a gap that wasn't there in 1979. We need a more "progressive" system--higher taxes. Well, duh. You mean when we lived in an upper middle class neighborhood of the 70s in a home with 1.5 bathrooms, 2 TVs, 1 phone, 1 car, 1 income, and lived month to month with 2 growing children in our home? Do you mean when we had 1 week vacation, which we spent at Mom's farm, and paid our own health insurance? Do you mean when we had a mortgage and a car payment, but no credit card or college debt (never had that because we never borrowed). Do you mean when FICA withdrawals from our 1 check ended at $22,900 and there was no Medicare tax (now is $127,200 FICA + 1.45% for Medicare)? And the personal exemption? Much higher then. Don't have the exact figure for 1979, but if the 1913 rate (year of modern income tax) of $3000 were adjusted for inflation it would be about $72,000--anyone getting that?

So what has the government done for the poor and low income with all the tax money and safety net money we've sent in the last 40 years? Well, the so-called safety net expanded so much that the middle class now qualifies for many entitlement programs meant for the poor. The middle class voter now screams if there's no COLA for Social Security (which originally was for the poor widows and orphans) and Medicare.

Now 55% of the U.S. population are receiving some sort of entitlement--and it's not because we're poor, it's because we're middle class and wealthy. It's because for every election the politicians dangle an increase for the population served by Social Security, or one of our 5 health insurance programs. Government programs NEVER get smaller--they always expand, and since there are so few poor people in America, they expand into the middle class. There are people earning over $100,000 who qualify for government benefits--even Obamacare.

The High Cost of Good Intentions by John Cogan

“Entitlements grow over time because of a force called “the equally worthy claim,” where eligibility for benefits continually expands until programs no longer resemble their initial, honorable intentions.”

Entitlements don’t go just to the poor. The word doesn’t mean the same thing to all. Some think it’s a handout, unearned.  Others see it as a benefit than can’t be taken away because it is their right. It is a benefit under the law to anyone who qualifies.
https://www.policyed.org/perspectives-policy/high-cost-good-intentions/video
I’m trying to get a copy of Cogan’s book from my public library, but I found a YouTube of Cogan explaining this thesis that any entitlement expands and usually during an election year. Shocked!
https://www.youtube.com/watch?v=rqthAe5-4Zg
Cogan reports that the very first entitlement was a pension for men who had fought in the Continental Army during the War for Independence, but by 1830 (when most would have been dead) it had already expanded to many others, such as state militia, because they were also worthy to a claim.  Didn’t they bleed? I’d have to go through my genealogy files, but I found a copy (in an on-line data base) of the claim of a widow in my family tree who was claiming a Revolutionary War pension well into the 1800s. Then after the Civil War there were originally about 200,000 pensioners, and that grew to over a million by the 1890s.  There is still a woman getting a pension from that war who was born in 1930, and her mother had married a Civil War veteran when she was young.
The federal government spends $7,500 for every man woman and child on entitlements.  However, it was not until the New Deal that Americans began receiving assistance for not having provided any service. Now, about 55% of Americans receive some form of entitlement.  Cogan’s point is that these forms of assistance create a disincentive to work. The intentions of these programs were good, but can provide negative outcomes. The break up of the family is far worse today due to welfare than it was in 1965 when the alarm was first sounded.
The most successful reform of entitlements was in 1996 and the welfare reform when the money was pushed to the states to dispense. They will continue to grow, but will need a healthy growth of the economy to balance out. If Trump can get the growth he wants, perhaps he will turn to entitlement reform.

An entitlement repealed

A government entitlement repealed. Wow. Small businesses can grow again. Maybe there will be health insurance with deductibles people can afford, and there will be counties with at least one provider.  I didn't know I'd have anything to celebrate, but for dinner we're having beef roast, baked potatoes, fresh salad, strawberries, and chocolate pie.

An inspiration for all people, but especially women

Sequestration, or where are the cuts?

Most of our tax money (70%) goes for social programs, especially Medicare, Medicaid, VA, and Social Security.  Some conservatives don’t like Social Security and Medicare called an “entitlement,” but they truly are—we should be entitled to what we paid in with interest. (I’m not because I have a teacher’s pension and get nothing for what I paid in to SS in non-government jobs, nor a spousal benefit.)  And it isn't the fault of Obama, as some detractors claim (he's got more than enough problems without giving him that one.) That will only increase.

The defense budget is extremely small, although the sequestration was Obama's idea (now trying to blame GOP) and is a rather small amount, it will certainly hurt the thousands of civilian employees right now as other lower paid jobs become unavailable because of raising the minimum wage—which always hurts the economy. It's a wonderful 2-fer for the president to hurt the economy even more which seems to be his major desire as he flits from gay marriage to stomping out freedom of religion to passing out free contraceptives instead of freeing up businesses to create more wealth.

The federal government should have stayed out of education--it wastes a lot of that money, and that responsibility was left to the states. Head Start, one of the biggest federal wastes with a 40 year history of failure, will probably get money better spent on bridges and roads, that he never gets around to that despite his promises. http://blog.heritage.org/2012/09/23/chart-of-the-week-70-of-spending-goes-to-dependence-programs/

The glass ceiling and the welfare ceiling

Mother of two is trapped in the welfare system. With an income of $19,000 she qualifies for nearly $81,000 in benefits according to the Blaze panel tonight, many of which would be lost if she made more money--child care, SNAP, Medicaid, SCHIP, Section 8, earned income tax credit, heat, phone, etc. Another example from Pennsylvania in mid-2012 was of a statistical mother of 2 earning $29,000 gross income is better off than earning $69,000 gross because of entitlements she receives at the lower income. And if people say this is a trap, they are cruel, haters, racists, etc.

She can earn $57,000 and still get SCHIP; she can earn $45,000 and get child care and SCHIP; but why do that when at $29,000 she can also get food stamps, housing and heat as well as medical and child care? Look what she would lose if she got a promotion--or got married?

 http://www.aei.org/files/2012/07/11/-alexander-presentation_10063532278.pdf

No need to cut entitlements for the poor

Thomas Sowell suggests Congress start with entitlements for the rich. If you saw John Stossel's program on Fox last week, he suggested the same thing.

Sowell writes: "My plan would start by cutting off all government transfer payments to billionaires. Many, if not most, people are probably unaware that the government is handing out the taxpayers' money to billionaires. But agricultural subsidies go to a number of billionaires. Very little goes to the ordinary farmer. Big corporations also get big bucks from the government, not only in agricultural subsidies but also in the name of "green" policies, in the name of "alternative energy" policies, and in the name of whatever else will rationalize shoveling the taxpayers' money out the door to whomever the administration designates, for its own political reasons. The usual political counterattacks against spending cuts will not work against this new kind of spending-cut approach. How many heart-rending stories can the media run about billionaires who have lost their handouts from the taxpayers? How many tears will be shed if General Motors gets dumped off the gravy train?"

To Cut Deficits, It's Best To Pick Low-Lying Fruit - Investors.com

A generation raised to expect breakfast

The man in front of me at Panera's today (fabulous bakery items, in case you've never been there) was buying a delicious selection of breakfast goodies--dense in calories and nutrition. In jest I said something like

"You must be really hungry today."

"These are for my employees. I love to see their smiles and they work harder."

"How nice," I replied. "All I ever got was a paycheck for working hard."

When we were out of earshot of others, he explained in hushed tones the real reason.

"I'm a contractor and I've learned that most of my mid-20s employees grew up getting breakfast, lunch and snacks provided to them by their schools. They have no idea how to feed themselves and they expect to be fed by whoever is in charge. When I give them a job to do, they say, 'But we haven't eaten yet.' "

Most are on food stamps and they come to me from an agency. If I want them to work, I have to feed them."

I'm still in shock. What have we done?

At last, an honest Democrat

"Mr. [John] Cassidy is more honest than the politicians whose dishonesty he supports. "The U.S. government is making a costly and open-ended commitment," he writes [on the New Yorker web site]. "Let's not pretend that it isn't a big deal, or that it will be self-financing, or that it will work out exactly as planned. It won't. What is really unfolding, I suspect, is the scenario that many conservatives feared. The Obama Administration . . . is creating a new entitlement program, which, once established, will be virtually impossible to rescind."

Why are they doing it? Because, according to Mr. Cassidy, ObamaCare serves the twin goals of "making the United States a more equitable country" and furthering the Democrats' "political calculus." In other words, the purpose is to further redistribute income by putting health care further under government control, and in the process making the middle class more dependent on government. As the party of government, Democrats will benefit over the long run." Review and Outlook, Nov. 10

I would modify that editorial just a wee bit. Democrats will benefit over the short run; and in the long run, they will destroy the country. Think about what they were celebrating at the Berlin wall site yesterday--and now we're building one.

The Recession Did Not Create Our Entitlement Crisis

There have been some whoppers fed to us at the Obama buffet table of lies, but this one is almost beyond belief. Our entitlements have been in trouble for as long as I've been paying attention, which is about 25 years. Social Security and Medicare are 1/3 of the federal budget. That didn't just happen in 2008! There is no "trust fund"--and we've killed off the workers who could have paid into that fantasy program before they were born. Our population's birthrate is almost below replacement rate--just the way environmentalists want so they can save poor, tired Mother Earth, the goddess stand-in of their pantheist drivel. If every woman of child bearing age could have a baby tomorrow, we'd still have to wait 20+ years for them to contribute to our health and old age care. Talk about poor planning! Or no planning. The job losses from the Waxman Markey climate bill which will raise energy prices by 55-90 percent will kill whatever hope we had of funding not only alternatives (and their fantasy jobs), but any job growth anywhere, and create more unemployment resulting in even more of a shortfall in entitlement programs.

Here are some reform ideas. I'm sure Obama won't listen--after all, he wants this to be another crisis on Bush's watch so he has an excuse to take over even more of the economy--which so far hasn't done a thing but put us more in debt.

A plan to save us

Paul D. Ryan's plan to save us from the looming entitlement crisis is so sound and so sensible, you know before you get to the last paragraphs that Democrats won't support it. Remember how they said in 2006 they had a plan? (Hope? Change?) Ha. The economy has plummeted since they took back Congress and scared everyone with their hot air, hair brained ideas to punish the successful and abandon our allies.

Ryan's plan requires a sense of personal responsibility, the federal government getting off our backs and to stop using our "trust" fund for other programs, the states reassuming some tasks they've let go, a more fair tax plan, and long range planning. These elements are really lacking in the general population, so it will be a tough sell. Millions have grown up wanting someone else to be in charge of their health, their education, their personal relationships and their pensions. Ryan suggests

universal health coverage . . .shifting the ownership of health coverage from the government and employers to individuals, providing a refundable tax credit – $2,500 for individuals and $5,000 for families – to purchase coverage

. . . modernizing Medicaid by giving states maximum flexibility to tailor their Medicaid programs to the specific needs of their populations

providing workers under 55 the option of investing over one-third of their current Social Security taxes into personal retirement accounts

simplifing the tax codes rates and eliminating capital gains tax to stimulate investment(don't we hear that every 4 years?)

Sigh. But oh, we can dream.

Health insurance for children

David Brooks on Sept. 28 had an Op Ed in the NYT about the phony pain Congress suffers when speaking of our debt. "The U.S. government has $43 trillion in unfunded liabilities, or $350,000 for every taxpayer," he writes. Congress has a Mardis Gras-tomorrow will never come mentality.

These habits infect everything they touch, even a straightforward and successful program like the State Children’s Health Insurance Program, or S-chip. According to the Centers for Disease Control, the number of uninsured children has been declining steadily for years. It shouldn’t be that costly or hard to insure the ones that are left.

And yet because S-chip is a product of the current climate, the expansion plan in Congress has all sorts of corruptions and dishonesties built in. First, it perpetuates a smoke screen of obfuscation between who pays and who chooses. States have an incentive to ramp up benefits because they know that most of the cost will be borne by taxpayers somewhere else. Second, it entices children out of private and into public insurance, even though after 2012 it cannot cover the cost.

I have little sympathy for smokers, but I do admit, I don't know any college-educated, well-off smokers. They've sucked it in, endured the headaches and quit. The smokers I do know are blue collar folks--retail, hospitality, auto repair, clerical, factory, construction. So Brooks zeros in on the wealth transfer that will have to take place for this entitlement.

The S-chip bill takes money from these relatively poor, politically immobilized people and shifts it to those making up to $62,000 a year. Nobody is raising a tax on wine consumption or gasoline consumption to pay for this benefit. Instead, Congress is taxing the weakest possible group [lower income smokers] in order to shift benefits to others, some of whom are middle class.

Have you ever noticed that if a government program is successful and begins to eliminate the problem it was set out to solve, Congress will expand it out of fear of losing a piece of the action?