Half of U.S. households get government payouts

by NW Spotlight

The Wall Street Journal reported on Saturday that half of the U.S. lives in a household where at least one member receives some type of government benefit (food stamps, Medicaid, unemployment, Social Security, Medicare).

The WSJ article goes on to note “The more people who receive benefits, the harder it’s going to be to make cuts, and it’s never popular to raise taxes. In some respects that argues for letting a combination of tax increases and spending cuts that is set to automatically hit in 2013 take effect. There’s just one problem: the Congressional Budget Office says it would sink the economy into recession.”

  • 4real

    This is a good thing. What good is government if not for taking care of people who are unwilling to take care of themselves.
    If government did not do it, who would? The rich? I hardly think so.
    Saftey nets are good, as they catch people falling down and secure them before they hit rock bottom.

  • Bob Clark

    The tonic is (1) freeze all nominal federal government spending indefinitely until the federal spending/revenue gap is closed sharply. (2) Freeze tax rates at current levels permanently; and (3) roll back regulation to that of the 1990s (when the economy comparatively roared).  Deregulation would give a boost to new jobs like, for example, the 20k direct jobs provided by the Keystone XL pipeline; and would give a boost to global competitiveness. (4) Keep monetary policy very easy as it is now until the unemployment rate drops below 7% on a six month or so rolling average; and afterwards allow interest rates to rise back to the 1 to 2 percent real rate range.

    Economic growth, given these four three steps, would substantially close the federal government spending-revenue gap within a period of 5 to 10 years.

    O.k. what’s for breakfast?

    • 3H

      So what happens when you freeze the spending on, say, Medicare and the cost of health care continues to rise at the rate it is.  Are you willing to accept that seniors will have to ration their care even more than they do?  Choose one medication over another, or one procedure over another, because they simply can’t afford both?

    • David Appell

      The Keystone XL project does *not* provide 20,000 jobs — it’s 20,000 man-years over a 2-year period:
      https://oregoncatalyst.com/15451-lars-larson-obama-face-voters-paying-5-gallon-gas.html#comment-460769765And it would cost the US $4B/yr in higher gas prices:“Existing markets for Canadian heavy crude, principally [the US Midwest], are currently oversupplied, resulting in price discounting for Canadian heavy crude oil,” concludes a 2009 analysis on behalf of TransCanada by Purvin & Gertz, Inc., an oil economics firm based in Houston. “Access to the [US Gulf Coast] via the Keystone XL Pipeline is expected to strengthen Canadian crude oil pricing in [the Midwest market] by removing this oversupply. This is expected to increase the price of heavy crude to the equivalent cost of imported crude.”Christian Science Monitor, 3/9/12https://is.gd/95Ie2e

    • David Appell

      If we adjust regulation back to the 1990s level of prosperity, how about adjusting corporate tax rates back to then too? For the sake of prosperity….

      Corporate taxes were about 30% of corporate profits in the 1990s, compared to about 20% now. It would bring in about $200 B/yr….Corporations can afford it. Corporate profits have been rising for at least a decade — in the 1990s they were about 9% of GDP, and are now 13% (an addition of about $600 B/yr).

  • Ardbeg

    Beginning in 2011, the population 65 and older will grow faster than the
    total population in every single state-Census Bureau. Right now the over 65 crowd only accounts for about 15% of the total population.  In the next 10-20 years the number of seniors will be closer to 50% of the overall population.  Government spend is going to increase dramatically when that happens.

    • valley person

       “In the next 10-20 years the number of seniors will be closer to 50% of the overall population. ”

      Way way off the mark. The Census Bureau estimate is that the over 65 population will be 20% of the total population in 2030. That is nowhere near 50%. Even Japan, which is way older than we are, will top out at around 38% over 65, and it will take 40 more years to get to that point.

      Government spending is going to increase to take care of us geezers, but not so dramatically. Nevertheless, it puts so-called conservatives in a box. Their remaining supporters are primarily geezers, and that is where 40% and rising of US government spending goes. Be careful cutting their allowance. They are almost all you have left.

      • Ardbeg

        My bad, read that wrong. There will be more 65 and older than 18 and younger by 2030.  Either way the conservatives are in voting trouble if they think they can do away with the programs those seniors expect to still be in place.

        • valley person

           Interesting. If 20% are over 65 and 20% under 18, that is a lot of people in non-earning age groups. unfortunately for those under 18, they don’t vote, so guess who will continue to get the lions share of federal social spending?

          The Tea Party.

  • David Appell

    Notice how the WSJ article has no mention of, for example, the government benefit of the home mortgage interest deduction, which costs taxpayers roughly $100 B/yr. The wealthiest 1/5th of Americans capture 4/5ths of it, and it is even available for 2nd and 3rd homes. Less than 4% of this benefit goes to the bottom 60% of Americans.

    Two-thirds of Washington’s subsidies go to the wealthiest 40% of Americans — less than 4% goes to the poorest 5th. (Pew Economic Mobility Project)

    Clearly the WSJ article is willingly blind and so heavily biased. 

    [statistics from Edward Luce, Time to Start Thinking, 2012] 

    • JoelinPDX

      Yet virtually all of the federal income tax is paid by the top half of wage earners. 40 percent of personal income taxes are paid by…get this…just the top one percent of wage earners. 

      Households in the top quintile pay over 13 percent of their income in income tax, while those in the bottom quintile pay negative ten percent 

      So, when you look at the facts it makes your arguments about home mortgage deductions look pretty stupid. The lowest four percent of taxpayers don’t get any deductions because they are part of the 50 percent that don’t any taxes…in fact they’re in the 20 percent that gets money back.

      • David Appell

        Joelina: The wealthy pay most of the taxes because they make most of the money. 

        But everyone pays taxes (there are many besides income tax), and the share of total taxes paid by different income groups is similar to the share of total income received by that group. See:“America’s Tax System is Not as Progressive as You Think”Citizens for Tax Justice, April 2011https://www.ctj.org/pdf/taxday2011.pdf

        • Ardbeg

          “Joelina” I just about busted a gut…Nice.  Though I personally wouldn’t have used that in response to his post.  That has to one of his few posts that doesn’t revert to ridiculous name calling and I prefer to let him throw the first punch.  As long as he keeps it clean, I try to as well.

          • David Appell

            He’s called enough names in the past…. In fact, this may be the only time he didn’t.

      • David Appell

        In fact, according to a CBO report last year, after taxes the top quintile had 53% of the income in 2007. (The bottom quintile had 4%.) And this share of income has been going increasingly to the top in recent decades.

        So naturally those with the most money pay the most taxes.  Source:https://cbo.gov/publication/42729

        • 3H

          So.. if we want the bottom quintile to pay more taxes, we should, hmmm…  be paying them more?  Giving them a larger piece of the pie?   Not complaining when they don’t pay income taxes on their crumbs?

          • David Appell

            But what kind of world would THAT be?!??!!?

          • 3H

            I think it would be a very productive and happy world.  😉   I also think very prosperous.  

      • David Appell

        The Tax Foundation says that the top 1% earned 17% of Adjusted Gross Income, but paid 37% of all federal income taxes. 

        However, federal income taxes are only 50% of federal revenue, so without further information it’s impossible to draw conclusions about fairness (from these data alone).

        Then, one has to consider who receives the benefits of government spending, and how that breaks down by income group.

        Then, one must wrestle with the moral questions of capitalism, with the distribution of the large amount of socialism already present in our system, and with the morals questions of what (besides purely economic considerations) makes a fair and just society.

  • Four More Years!

    In Obama America, food stamp is main currency!

    • David Appell

      Unfortunately, while those who lack food are being helped, those who lack grammar are clearly not. 

  • Four More Years!

    In Obama America, public is only employer!

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