Wednesday, April 23, 2014
PLACERVILLE, CALIFORNIA
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The balancing act: How to get around welfare

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From page A4 | February 10, 2014 | 23 Comments

Nearly 50 years ago, President Lyndon Baines Johnson declared the creation of the Great Society in his State of the Union Speech on Jan. 4, 1965. Its purpose was to end poverty, create a program of civil rights and new health care legislation. But six months before, he already got his War on Poverty bill passed. As a side note, it is ironic it was only a month after his Great Society speech that the pacifist, do-gooder Johnson ordered the continuous bombing of North Vietnam. I guess not everyone deserved a great society.

If we fast forward to today, what are the results of the Great Society, the largest welfare program ever created by mankind? Well after giving away an amount that is equivalent to one half of the national debt which now exceeds $17 trillion, the poverty rate as determined by government numbers is actually higher now than in 1967 by about a percentage point. By population those below the poverty level in the mid-1960s numbered about 25 million and today that number is over 46 million. Even with the attempted slashing of welfare during the Clinton Era, poverty remains about the same and it appears so has welfare, only with different names.

During the period of the mid-1990s welfare became a dirty word. Most working people who pay this country’s bills were fed up with welfare and as a result, welfare benefits were cut significantly. And what happened is that it made no difference in the poverty rate. Poverty did not go up with the cutting of welfare, it went down (Some of that was the result of a growing economy. Let’s see, welfare gets cut, the economy grows and poverty is reduced. Is that a clue?). But in the last few years welfare is back; it is just called by a different name. With respect to food stamps (more welfare), we have more Americans receiving welfare (food stamps) than ever with a reported number of more than 49 million people.

Recently the welfare state was hugely expanded. It is called Obamacare. Except it is not called welfare. It is called a government subsidy. Although the current administration is very reluctant to release the numbers, there are estimates that four out of five of the enrollees under Obamacare are either placed on Medicaid (another form of welfare) or received government welfare checks from you and me to help pay for the new enrollees’ medical premiums. While they are called subsidies, these are nothing more than huge welfare payments. As history demonstrates, more government handouts beget more government handouts. Why should anyone work if someone else will give you money? Why study hard in school if you don’t need a good job. Hey, the government will take care of me.

Right now in Congress there is a push by our president and by the Democrats in Congress to add to the welfare payments from government, but they are not calling it welfare, they are calling it extended unemployment insurance benefits.

Unemployment insurance is just that, insurance with specified benefits based on actuarial study. You pay an insurance premium in case you lose your job. Your unemployment insurance deduction is on your pay stub. But there is an unemployment insurance deduction you never see and it is a federal unemployment insurance tax of 0.6 percent only paid by your employer on your salary. You never see it and you probably didn’t even know about it.

The insurance was designed to pay benefits to those who lose their jobs. The benefits from the insurance are for 26 weeks or until you find a new job, whichever occurs first. If a state is going to extend benefit payments they usually increase the tax, which California has done in the past. Because of all the extensions of benefits (welfare), California’s unemployment insurance fund is over $9 billion in the hole. Extension benefits for California have given some unemployed 37 weeks of welfare payments (payments beyond the 26 weeks paid by insurance). At the height of the recession some unemployed ex-workers received an extra 73 weeks of welfare payments. Those extra welfare payments have expired.

So what does the president want to do? That’s right, create a new class of welfare recipients by re-extending unemployment benefits to 99 weeks, which is nothing more than welfare to a specific class. We have accumulated 50 years of data and the conclusions are clear, welfare does not stop poverty, it creates it. And it is responsible for a whole lot more of society’s ills. What reduces poverty is economic growth, something that hasn’t happened for at least five years and the stagnation is continuing, notwithstanding government deficit spending of about $8 trillion over the same period.

Massive welfare and income redistribution does not reduce income inequality, wealth creation does. More on that later.

Larry Weitzman is a resident of Rescue.

Larry Weitzman

LEAVE A COMMENT

Discussion | 23 comments

  • 1036-FrankFebruary 07, 2014 - 11:59 am

    If people would only heed the warnings that this country is quickly running out of tax payers by transferring millions of formerly working, taxpaying people into govt. entitlement programs and the numbers are staggering all within six years as a hide the problem approach to real unemployment. The leftist media is now trying to come up with a new term and a spin to describe the millions of people who were placed into this poverty trap by their deal leader Comrade Barack. I can only wonder what the new word will be for the always brilliant leftists, will it be the new "work challenged" who can now choose to not be burdened with jobs?

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  • Fran DuchampFebruary 07, 2014 - 12:21 pm

    Think of all the well meaning "volunteers" giving of their time to do jobs that used to feed families...I am a volunteer--have been for awhile. I have been in a position where if I helped--someone was going to be let go. When you volunteer--ask questions. Will someone lose their job...because it is more profitable to have a volunteer do the same thing for "free."

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  • cookie65February 10, 2014 - 5:40 am

    Is wealth spread by creating more of it, or by confiscating more of it? NOTHING, ABSOLUTELY NOTHING, ZERO, ZIP, NADA, leftist believe, do, accomplish, institute, create, dictate, or think is based in reality or fact. Pure unbridled emotion. Fear not though, they have an explanation for every last one of their abysmal failures, it is because they didn't throw enough of other people's money at it. The war on poverty has accomplished its intended outcome. Create poverty, dependence and power for leftists. The leftists motto: I have mine so I am going to take yours and give it to people who vote for me.

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  • Just Sayin'February 10, 2014 - 9:42 am

    Larry, do felons qualify for welfare?

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  • Miss MFebruary 10, 2014 - 11:21 am

    I wish the Mountain Democrat had a like and not like button here. People work and pay taxes. It would be nice as in some other countries, Canada for one, people have a better health care system by spending more of their tax dollars for the good of the people instead of war.

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  • cookie65February 10, 2014 - 12:27 pm

    Are the problems with obamacare due to a lack of spending? If they are then see my 5:40 am comment where I included the left's explanation for all of their abysmal failures.

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  • Dink LaneFebruary 10, 2014 - 1:45 pm

    Yes, you're right Cookie.... We don't want the poor to have health care..... We don't want the poor anywhere but on the streets..... under bridges.... starving.... That's the society...we want....

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  • careFebruary 11, 2014 - 6:31 am

    Mr Lane, why would anyone anywhere ever want that? Your statement is horrible and abusive

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  • cookie65February 11, 2014 - 7:58 am

    care, pay little attention to dinky, his standard operating procedure is to take anything anyone says and subject it to some crazy interpretation that has no relationship to reality. He is trained in strawman leftists speak. He is why you can't negotiate or compromise with the tyrannical left. In dinky's world view EVERYTHING belongs to the government.

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  • Dink LaneFebruary 10, 2014 - 1:42 pm

    Larry -- Would you consider SJR Farming,....... Bowles Farming,............. Dublin Farms,............ Red River Farms, ...........Buttonwillow Land & Cattle,.............. or Sandridge Partners (single-family farms).......each one..... got MILLIONS of taxpayer's $$$$............ Plus............ Millions of Taxpayer's kick back for water ($25 for 325,851 gallons of water) & (paid Extra $$$$ if they don't get all contracted water) -- each family farm............. I wonder if EID would pay everyone a BONUS when they can't deliver 100% of the water you WANTED ??? Nah.... You're not of the elite...

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  • Oh BrotherFebruary 10, 2014 - 4:25 pm

    How Does Outsourcing Affect the U.S. Economy?

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  • Oh BrotherFebruary 10, 2014 - 4:31 pm

    GM expects to pay CEO Mary Barra $14.4 million in '14

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  • Oh BrotherFebruary 10, 2014 - 4:35 pm

    The Offshore Outsourcing of American Jobs: A Greater Threat Than Terrorism

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  • EvelynFebruary 10, 2014 - 5:32 pm

    OB: Congratulations on mastering hot links!

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  • Oh BrotherFebruary 10, 2014 - 5:35 pm

    Thanks Evelyn, however, I have no idea how I did this. Probably the webmasters at the MD helped me out by converting it...I would like to know how you do the HERE and it takes you to the link...your skills are quite impressive!

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  • Phil VeerkampFebruary 10, 2014 - 5:44 pm

    . . . or call me . . . I'm listed . . .

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  • EvelynFebruary 10, 2014 - 5:54 pm

    No, the MD webmasters did not intervene. YOU did it! I absolutely guarantee that when a link is botched it STAYS botched. I've done it plenty of times, which is how I know.

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  • Secret SauceFebruary 10, 2014 - 8:52 pm

    Bro, Cool Hyper Link

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  • Secret SauceFebruary 10, 2014 - 8:55 pm

    Bro, you can name it what you want. Delete what is between > and < enter new name

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  • Oh BrotherFebruary 11, 2014 - 7:16 am

    Thank you Secret Sauce :)

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  • Phil VeerkampFebruary 10, 2014 - 5:41 pm

    OB, if you would email me I would share the secret of the HTML. I will nominate you for sorcerer HTML apprentice.

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  • Oh BrotherFebruary 10, 2014 - 6:40 pm

    Phil, you are a stinker, haha...getting ready to go on vacation and will see how things are when we get back! Go Giants! Off to spring training...

    Reply | Report abusive comment
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