At its core, America has been the home of the brave, land of the free, be all you can be, benevolent, compassionate nation. That is our greatness. That is what has made the United States the envy of the world for the last 200 years.
But we are losing it. We are moving at warp speed down a path that will crumble the foundations of our nation forever. What is happening today, right before our eyes, can dramatically and negatively impact every family in America and it is unlikely that we will be able to fully recover. We have to stop thinking that we can just wait for the 2022 and 2024 elections to get back on track. The future of America is being defined right now and its very ugly.
Socialism is being defined in so many ways by so many people today as we watch Biden/Pelosi/Schumer act out this charade. At its heart socialism is about economics. Economics rule our daily lives beginning at the kitchen table where mom and pop work out the budget.
Let’s go back to the title of this missive, THE ROLE OF GOVERNMENT, SAFETY NET OR ENTITELMENT?
WHAT IS THE ROLE OF GOVERNMENT, unconstrained growth, greater bureaucratic intervention in our daily lives, taking away personal choice, dictating what we must and/or cannot say, measuring success by the number of Americans receiving some form of government welfare? That list is getting longer and more controlling every day. We are becoming government-run robots. Is that Build Back Better?
SAFETY NET is what this country has always been about with its compassionate and benevolent culture. Safety nets are for those who face circumstances beyond their control and are in need of temporary, or in some cases permanent outside assistance. It begins with family assistance, transitions to community assistance and when necessary to state and/or federal help. Safety nets kick in after the fact, after the need for personal help manifests itself. It is not preemptory. It is not a net spread over the country and engaged whether needed or not. Safety net is not a solution in search of a problem.
ENTITLEMENTS always start small and rapidly grow. Medicaid was once a safety-net program but now, for example, covers 37% of Californians. Medicare started as a program for seniors; democrats now want to cover everyone over age 55 while the socialists want Medicare for all.
Social Security is on a path to become insolvent in the early 2030s, with only enough money to cover about 80 percent of its obligation. Medicare would become insolvent by 2026, if no changes are made to payroll taxes or how health providers are paid.
In 2019 entitlements consumed 56% of the federal budget. The Congressional Budget Office tells us spending on the three big entitlements, Social Security, Medicare, and Medicaid, is growing unchecked on autopilot. By 2028, spending on these programs alone will claim over 73 percent of all federal revenues.
While these programs are simply unsustainable in their current form, President Biden’s expanded welfare-state could take us over the cliff to an unsustainable fiscal future.
THE BERNIE SANDERS/BIDEN MODEL FOR AMERICA: The liberals/progressives/socialists look to European countries as enviable models of welfare states. But the facts tell a different story. For example, U.S. labor participation rates in 2019 were 62.6% while 49.7% in Italy, 55% in France, and so it is in all the social democrat countries. Why work when the government will send you a monthly check not to work? Labor participation plays a significant role in a country’s economic growth. Even under the tax-and-spend economic policies of the Obama/Biden administration the U.S. GDP averaged 2.3% growth. During that same period, GDP growth in Italy, Spain, France and Germany averaged a weak 1.6%.
Another insane program that impacts economic growth in socialist Europe is their family leave policies. Italy offers 22 weeks maternity leave at 80% of previous earnings, France 16 weeks at 90%, Spain 16 weeks at 100% and so it goes across the European welfare states.
What the liberals who are impressed with Europe’s welfare state don’t tell you is that long ago they tapped out the wealthy or forced them to take their money and depart so the middle class is paying the bills. The favorites are value added taxes (about 20%) and payroll taxes. The combined employer/employee social security tax rate is 36% in Spain, 40% Italy, 65% France. The result is that several of these countries are now desperately trying to figure out how to reform their tax and welfare systems in order to be competitive in the global marketplace and to grow their GDP.
BIDEN’S MANDATE? There is a separate but important issue associated with Biden’s dash to complete the welfare state. First let’s think back to the 2016 election wherein Trump told us exactly what he was going to do for us (for us as opposed to, to us). You know the list, fix immigration, kill Isis, cut taxes, hammer NATO members to pony up, etc. He got elected on that message and then, something unusual happened, he kept every campaign promise.
By stark contrast, Biden and Bernie Sanders met in July 2020 as Biden emerged as the presidential candidate. They agreed on a 100-page liberal program but Biden did not campaign on those issues. He was elected on an anti-trump, national unity, raising taxes and Covid agenda. Biden has absolutely no national election mandate to take this country down the dangerous, potentially ruinous welfare state path we are on.
BIDEN’S WELFARE PLAN, safety net or buying votes? Over the first few months of his administration, he has given us bits at a time of his thinking on developing and perpetuating his welfare state. Keep in mind that these programs will get stacked on top of the 80 existing federal programs that provide cash, food, housing, medical care, social services, training, and targeted education aid to poor and low-income Americans.
- Paying families to raise a child. $3,600 allowance for children up to 6 years old and then $3,000 per year through age 17. This is not just for the poor and disadvantaged; payments go out to couples earning $150,000. A monthly check for about 70 million kids!! A very expensive safety net?
- “Free” universal preschool for about 5.5 million children ages 3-4. A Biden version of a safety net?
- Provides for the largest child tax credit ever. Any semblance to a safety net here?
- Subsidized child care to be “extended for years to come.” Under this plan, the average American family with young children may save $14,800 a year on child care. How did America survive for a couple hundred years without this safety net?
- Two years of (here’s that word again) “free” community college for everyone. Safety net welfare? Come on man
- A program for people taking leave because they or a family member are sick, welcoming a new child, or dealing with sexual assault or domestic violence. It would provide up to $4,000 a month, and up to 80 percent of full wages for the lowest earners during that period. Safety net for what? How many generations of Americans have done just fine without this?
These are classic examples of a temporary helping hand that will become an entitlement. And it remains to be seen if there are more giveaways hidden in the $3.5 trillion Build Back Better package still under consideration. By the way, imagine 25 100-count reams of paper stacked up; that’s the size of the printed bill and it works out to $1.4 billion per page. And, by the way do you believe for a minute that anyone in Congress has read it?
There are a number of lies associated with these programs. Our President has told us universal child care for 5.5 million children and community college tuition for everyone are “free”. Of course, that is not true, nothing is free. Also, about the $3.5 trillion bill, he tells us, “It is zero price tag on the debt. We’re going to pay for everything we spend.”
WELFARE HISTORY LESSON AND A BETTER WAY FORWARD: The liberals, many of them in Congress during the 1990s could take a page from the Clinton presidency and provide an entirely different approach to welfare. President Clinton once commented that, “Welfare should be a second chance not a way of life.”
With that attitude and pronouncement President Clinton worked hand-in-glove with the Republican Congress, led by Speaker Newt Gingrich to pass The Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Some of the provisions are as follows: Instead of welfare being funded in a more open-ended manner, now welfare was funded by federal block grants to states, along with a requirement that states had to match some of the federal dollars. The program added work requirements for aid, shrinking the number of adults who could qualify for benefits. It also created caps for how long and how much aid a person could receive, as well as instituting harsher punishments for recipients who did not comply with the requirements.
They asked parents to either work, go to school, or get job training in order to get welfare. This simple reform had incredible results. Welfare enrollment significantly declined for the first time since the War on Poverty started in 1965. Employment shot up, especially among single mothers who didn’t graduate from high school. Child poverty, which hadn’t budged in decades, fell faster than ever before. By connecting welfare to work, Congress gave hundreds of thousands of vulnerable families a better shot at a better life.
Instead of “Welfare-to-Work,” today’s liberals are all welfare, no work. This approach creates long-term dependency rather than creating a productive future.
One of the clearest lessons learned from Covid is that given the choice of going back to work or staying home waiting for the government check, millions stayed home while small businesses could not get up and running for lack of employees. Studies show that long-term unemployment makes it harder for those employees to ever return to work.
By stacking on more welfare programs families will be trapped in poverty, when what they really need is a chance to prosper.
Some good advice from Nikki Haley, former South Carolina Governor: Between unemployment-insurance bonuses and child-allowance welfare checks, Joe Biden and Democrats in Congress want to end the commonsense, work-focused safety net. Their argument is that no-strings-attached checks will reduce child poverty. They won’t. Long term, this policy will push more people out of the economy and onto society’s sidelines.
This isn’t to say that our current safety net is perfect. The current system — which consists of over 80 redundant programs and runs up a trillion-dollar-tab every year — is too costly, too complex, and so poorly designed that it fails millions of families every year. By all means, America needs to reexamine and reform welfare to empower as many people as possible.
Safety nets can only work when they help people today while preparing them for tomorrow
In April 2018, President Trump signed the Reducing Poverty in America by Promoting Opportunity and Economic Mobility, executive order which ordered government secretaries to review their existing welfare programs and propose new regulations. It is believed that these new regulations would focus on cuts, including stronger work requirements. Of course, Biden immediately flushed that one down the toilet.
DEBT. We cannot think about the on-coming welfare state and more entitlements without also dealing with the elephant in the room….Debt. How much debt is too much? I believe that a reasonable answer would be that when the debt exceeds the gross domestic product it is too large and out of control. National debt on 20 January, 2021 was about $21.6 trillion while the 2020 GDP was about $20.9 trillion. Deficit spending in 2021 has already put the U.S. in red figures for debt v GDP. Deficit spending in FY 2021 is expected to be at least $2.8 trillion.
WHY WE SHOULD BE AFRAID OF WHAT IS COMING AT US: An illustration:
A family sits down at the kitchen table to work on the annual budget:
- They know their current credit card debt is $541,287.
- They know their income will be $68,703 (medium family income in the U.S.).
- They plan to spend $131,620 in the next 12 months.
- They figure ($131,620 minus $68,703) they will have to put another $62,917 on the credit card.
- Conclusion: this family is nuts!
STOP, do not go on reading until you have digested those numbers. Yes, this is an insane scenario; the bad news is, those numbers–income, debt, spending, borrowing–relatively speaking, accurately represent what our federal government leaders are doing right now.
Perhaps by now some, maybe many, of you are thinking, Covault has finally gone off the deep end with all the above prognostications that the country could be just days or weeks from going under.
My rebuttal: This country cannot go on forever with the kind of fiscal nonsense illustrated by the above family budget. We will reach a point of no return at some point and it just might be now with all the junk included in the bills that have not even been read, let alone vetted by expert witnesses in a series of Congressional hearings.
FINAL THOUGHTS:
Resolve is driven by economics. There are about 10 million jobs unfilled in the U.S. right now. The Covid lesson learned is that, for millions of Americans, they will resolve to go get a job, but only if the government checks stop coming. What is it about the word disincentivize that liberals don’t understand?
All this should make one wonder how the so-called Democrat politicians can believe that higher taxes and more social welfare is a viable path to Build Back Better when there is not a single example in the industrial world of a country prospering from such a plan. And then Biden/Pelosi/Schumer berate Republicans for opposing this insanity by announcing that our opposition makes us, “complicit in America’s decline.”
Many of America’s problems stem from this: Politicians share one thing in common, they are profoundly self-interested, cannot see or plan beyond the next election and see themselves as blameless and unaccountable.
Fiscal suicide by a thousand cuts. Yes, some entitlements are necessary; the problem is they tend to grow in both size and in number. It is not beyond reason to assume that Biden’s proposals could ramp up entitlement spending this decade to perhaps 80% or more of federal spending. When that happens, disposable revenue to cover all other government requirements will get slashed to the bone. The first big-ticket item to fall under the axe will be national defense. At that point we become increasingly vulnerable to attack in so many ways from China, Russia, North Korea and/or Iran.
BOTTOM LINE: What Biden is doing TO AMERICA, not FOR AMERICA, was succinctly summed up by the Wall Street Journal Editorial Board, 7 October: “America escaped from its 1970s decline by returning to its historic model of liberating private initiative and enterprise. Biden’s plan would empower the government, pile burdens on the private economy and erode upward mobility by encouraging people not to work, that’s the real recipe for decline.”
It’s time to wake the hell up America, our once great country is being redefined now, in the days and weeks ahead, and it is destructive and ugly.
Marvin L. Covault, Lt Gen US Army, retired, is the author of VISION TO EXECUTION, a book for leaders, a columnist for THE PILOT, a national award-winning local newspaper in Southern Pines, NC and the author of a blog, WeThePeopleSpeaking.com