Bring Our Frankenstein Welfare State to Heel!

Bring Our Frankenstein Welfare State to Heel!

Entitlements Must Be Controlled!

10 August 2017

 

The United States entitlement system has four major defects:

 

First, benefits flow to people who really should be able to take care of themselves. This was a key complaint about the Obamacare expansion of Medicaid, whose initial purpose was to supply a financial backstop for the indigent and their dependents. Similarly, Medicare and Social Security were created when seniors were the most impoverished age cohort; now the oldest Americans are also the wealthiest, yet their benefit levels have increased over the years. Social Security is not a welfare entitlement program. Social Security distributions were created by Americans over their working years for their own retirement. That money should legally belong to them and be used for themselves.

 

Second, providing benefits to the wealthy or able-bodied discourages good habits like thrift and hard work. For instance, many voters are under the mistaken impression that their contributions to Medicare and Social Security cover the full scope of benefits they eventually receive, which discourages saving for retirement and puts more pressure on the state.

 

Third, many entitlement programs were designed to handle problems that have since changed or even disappeared. The management of some entitlements was done for political, rather than to deal with social problems in a more rational way. The most extreme example of this is the Food Stamp Program, which was assigned for management purposes in the Department of Agriculture. In the DOA, food stamp distribution was linked to farm subsidies. Whenever farm subsidies remained unchanged or increased, distribution of food stamps, likewise remained stable or increased—a most irrational arrangement. (Farm subsidies are an entitlement program, themselves—distributed to wealthy farmers and farm co-ops. I cannot see a good reason to continue them, at all. During the last 20 years, farm programs have cost America’s non-farm households a total of $1.7 trillion.) Medicare was a program of runaway spending from its earliest days because the original law created and open-ended commitment that massively inflated costs.

 

Fourth, our entitlements invest undue political power in mediating interest groups. The government does not provide benefits directly, and so employs private parties which acquire power to influence the government. For instance, the doctors’ lobby, which initially opposed Medicare back in 1965, is so ingrained in the system that it now writes about 90% of the reimbursement rates for Part B. This is a huge conflict of interest.

 

Entitlement reform is desperately needed, but the general population does not understand the system. Both political parties should be involved in reforming this dysfunctional system. The problem is that conservatives and progressives do not agree on where the needs lie. The progressive technocratic know-it-alls at the top of the government architecture are intent on promoting dependence on the government and by extension on themselves. They do not see the inefficiencies of the system. Conservatives want to see control transferred to the states and local municipalities and…back to the private sector. They want to decrease excessive public funding of all these programs.

 

The Republican Party has been very ineffective in modifying entitlement programs; and the Democrats only want to expand the problems. Common sense at the top of our polity is necessary. Responsible and skillful leadership would be a good idea, too.