Barack Obama: The Dependency Class

Stephen Kershnar

Let’s Make the Election about the 47%
Dunkirk-Fredonia Observer
September 29, 2012

Mitt Romney recently said that 47% of the people pay no income taxes and believe they are victims. Romney continued that such people feel entitled to have the government provide them with free health care, food, housing, and so on. The mainstream media, and especially NPR, has focused on this quote like a laser beam. If understood as a criticism of a system that allows so many people to gobble up other people’s tax dollars while putting nothing in the refrigerator, the criticism would make an excellent centerpiece for the election. Obama wants more gobbling, Romney wants less. Let’s focus the election on this issue.

Government dependency is at a record high. Record numbers of people receive some form of welfare. This includes food stamps, cash welfare, subsidized or public housing, Medicaid, and other means-based government help. According to CNN, nearly one out of three Americans lives in a household that receives one or more of these benefits. Welfare should also be seen to include Social Security and Medicare. These programs coercively redistribute money. They differ from payments required by contract, such as when the government contracts with a business to provide some good (for example, construction). When these entitlements are added to the means-tested programs, nearly half of the nation received a government check (148 million Americans sucking on the government teat).

As dependency skyrockets, fewer people pay into the system. 47% pay no income taxes. It’s likely that large numbers of them pay little to no corporate taxes. Even the poor’s smallish contribution to payroll taxes is further reduced by the Earned Income Tax Credit, another welfare program. On any reasonable measure, the rich pay far more than their share, the lower class and poor far less.

Obama has done everything he can to increase the number of dependents and to transfer resources from producers to dependents. This can be seen in the massive increase in the share of the economy that goes toward federal government (now, roughly, a quarter of the economy) and the massive takeover of the medical system via Obama Care (18% of the economy). Almost all of Obama and the Democrat’s new spending consisted of wealth redistribution. Obama’s done less than nothing to rein in the calamitous entitlement programs (Social Security, Medicare, and Medicaid), despite the fact that the first two are already in the red. His profligate funding of the dependents has largely occurred through deficit spending (roughly 40% of federal spending is borrowed money), which has run up the debt to dangerous levels.

There are several reasons increasing dependency is wrong and bad. First, growing dependency leads to less liberty. As the size of government grows, our liberty shrinks. For every ten minutes we work, roughly two-and-a-half minutes of it goes to the federal government and roughly four to government at all levels. As the government confiscates more money, the American people lose the freedom to spend their own money. By analogy, if the mob used to take 10% of local businesses’ profits and upped its take to 20%, business owners were less free than before. If the mob increasingly interfered with how they ran their businesses and made them follow its rules (increased regulation), the loss would be exacerbated.

Second, growing dependency makes us poorer. By transferring money away from the efficient private sector to the inefficient government sector, we become poorer. Empirical studies have repeatedly shown a strong correlation between economic freedom (lower taxation and less interference with business) and wealth. Worse, Obama and company have provided welfare buffet to dependents via unbelievable amounts of deficit spending that has and will drag down the economy. The debt is now larger than the economy. Even if one looks at public debt, debt owed to people other than the federal government, it is still approaching nightmarish levels (roughly, two-thirds of the economy). The debt saddles the future generation with the ugly choice of defaulting or raising taxes to indecent levels.

Third, allowing people to leech off the hard work of fellow taxpayers harms dependents themselves and leads to more dependency. Nowhere is there more evident than in the case of American blacks. Despite being 13% of the population, they receive more cash welfare than any other racial group (roughly 32% according to Peter Bradley at Vdare). According to the Daily Mail, they have a 73% out-of-wedlock birth rate. This is a problem because for all races, households headed by single mothers use the lion’s share of need-based welfare programs. Their high school drop-out rate is horrifying (according to The Washington Post over a third don’t graduate on time). They are incarcerated at record numbers (one of three black males ages 20-29 under the supervision by the criminal-justice system); although to be fair part of this is due to childish drug prohibition. Much of the same pattern holds true for non-black members of the underclass, especially the illegal-alien underclass that Obama has sought to amnesty.

Nor is it clear that the poor is deserving of massive welfare. Robert Rector at the Heritage Foundation has shown that if one does three simple things (complete high school, have children only when married, and be in a household with a full-time worker), she is much less likely to be poor. In general, we are not asking too much here. Empirical studies show that people receiving higher wages work longer hours than others and, on standard economic assumptions, they contribute much more. If people deserve money based on hard work and contribution to others, the upper class deserves more and the lower class less.

One objection to these arguments is that age-specific entitlement programs (Social Security and Medicare) are different because the government has promised to give these benefits and because people have paid into them expecting to get their share when they get older. One has to be sympathetic to this argument. Nevertheless, contrary the government’s suggestions, it is uncontroversial that as a legal matter these programs are a discretionary welfare program rather than a contractual retirement program [see Flemming v. Nestor, 363 U.S. 603 (1960)]. If the programs are not cut back, the money simply won’t be there to keep them going. Promises to do impossible tasks are not binding. Were there a promise, it would conflict with the promise that the government implicitly makes not to run the country into the ground. It is unclear what weight can be attached to conflicting promises.

The second objection is that increasing socialization was necessary to keep the economic slowdown from getting worse. This objection is laughable. The slowdown is the longest since the Great Depression. Furthermore, it is unreasonable to think Americans will get richer if the government transfers resources from the productive private sector to the unproductive dependent class for consumption. Borrowing money from foreigners can do so temporarily, but it is no long-term solution.

In summary, Obama has lavished money on the dependency class. Let’s make this an election on whether we want this to continue. When you vote for Obama, you’re voting to pay higher taxes to pay for more welfare. Is that what you want?