Saturday, September 22, 2012

It is shocking, but can we really do anything about the "welfare" state, and if so what will replace it?


The fact that roughly half of Americans receive some government payment to which they feel morally entitled is a big part of our budget paralysis. It’s an inconvenient fact, but it’s still a fact.
Dealing with it ought to define the next president’s mission. Somehow, he must question the status quo without insulting the roughly 150 million Americans who receive federal benefits. Who deserves support and why? How much and under what conditions? Unless we ask these questions and find grounds for trimming some benefits, the budget impasse will continue and risk dangerous outcomes: a future financial crisis; crushing tax increases; or draconian cuts in programs (defense, research, highways) that aren’t payments to individuals.
This is arithmetic, as Bill Clinton might say. In 2011, payments to individuals were 65 percent of federal spending, up from 26 percent in 1960. America has created a welfare state, whether Americans admit it or not.
Actually, the share of people who receive federal benefits exceeds Romney’s 47 percent. Based on its Survey of Income and Program Participation (SIPP), the Census Bureau estimates that in mid-2011 — the latest available figures — the number of people with benefits came to 149.8 million, or 49 percent of the population. But this figure is too low, because SIPP doesn’t include several major programs (farm subsidies and college loans and grants). With these, the total probably exceeds 50 percent.  Robert Samuelson.

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