Welfare, I’m not hurting from it and neither are you.
A good friend and I got into an email debate. He sent me the latest message regarding how wonderful it is that Florida is going to be drug testing welfare recipients. I responded that I’ll consider the policy when we start testing all the CEO’s who get welfare for their sector of the economy, the lawyers, judges and all country club members.
I also noted welfare is not the problem He noted it’s not “the” problem, but it is “a” problem and he knows this from talking to people. I know of welfare too. I have served on two nonprofit boards, one for substance abuse and the other The Providence Center. My family adopted a family when I was in junior high. We had foster children. I was a day counselor for 2 weeks in the summer of ’73 for 7 to 12 year olds from 3 of the most horrible housing developments in the city of Providence. We had the “Institute” literally right around the corner from where I lived. My daughter is doing a year with NeighborWorks America.
Welfare is not the problem. But, my friend is a very smart person and an engineer, so I needed some numbers. Using this site I checked out what the ratio of spending on Family and Children and Housing is to our GDP. I used GDP and not the overall budget because hey, we all worked to earn that money and it might as well be used for something that is heart warming. The following numbers are total national spending (Fed, State, Local).
The year 1962 is the first year that there is spending listed for both Family and Children and Housing. Prior to that only Housing is listed as having spending. For 1962, the combined total ratio was 0.0027. That is 0.27% of our GDP was spend on families, children and housing. I started with 1970 and went forward using the endings of the presidential terms starting with 1980.
1970: 0.0035
1980: 0.0092
1988: 0.0093
1992: 0.0134
2000: 0.0092
2008: 0.0097
2010: 0.0141
First of all, these are miniscule percentages of our GDP. Second, it sure looks to me like the best way to solve the “welfare problem” is to solve the economic problem.
Of course, this means nothing if we don’t have other government spending patterns to compare too. I mean, how do we know if welfare is “out of control” if we can’t compare it to other spending? The same data set has two other categories: General Government and Other Spending. You can click on each to see the sub categories. But, just so you know General Government consists of Executive and Legislative organ, Financial and General services. Other does not include: Pensions, Education, Health, Defense, Protection, Transportation or interest. Other is just that: Other. Here is how the numbers look.
This is how the numbers flow as log function.
Call me stupid, but it looks to me like what we spend on welfare is not much more than what the government is spending on just doing the government thingy, unless of course people can’t get a job. Interestingly enough, the share of GDP spent on welfare in 1992 and 2010 is the same. In fact, at the peak of unemployment of the 2001 recession which was 2003, we spent just 0.0098 on welfare.
Here is another comparison. In 2009 we spent $167 billion on Family/Children and Housing. That year, we also spent $161 billion in the Other category of “Economic Affairs”. I don’t know what that is, but if it has anything to do with what we are experiencing I don’t think we got our money’s worth. This item went from -7.0 in 1997 to 7.8 in 2002 to 17.5 in 2005 to 1.3 in 2007 back to 17.7 in 2008. It landed at -79.7 in 2010. Hummmmmmmmm. I think Glen Beck would like this category. You know, who’s been playing with the money in the cookie jar? In fact, why did we not know that a cookie jar exists?
It doesn’t make me feel good to think that we spend about as much on the top office operations of this country as we spend on helping people. Think about it. What percentage of the “welfare problem” do
you believe is a problem? You know those drug addled lazy moochers who are preventing all us moral and hardworking folks from living the good life of our congress persons. Be careful now. This is a trick question. See, it won’t take much of a “problem” subtracted from what we spend to find ourselves spending less to take care of families and their children than we spend on the top office operations in this nation. That’s just plain being cheap. Down right, out and out cheap SOB’s even if we leave in all of the “problem”.
I just added your second chart to a file I’m assembling called “It all started in 1980,” though the grain of the chart is too coarse to be sure it qualifies. Nonetheless, payments to the poorest families doubled by Reagan’s election. (A leading indicator? Don’t know.)
Afterwards, despite the efforts to cut that sector it actually increased. There’s an obvious dip after Clinton passed PRWORA, but the levels are still high and rose after 1996 to top the highest pre-PRWORA level. (Hardly surprising, given that the people who receive these payments are living in a neutron depression.)
The stability of the tie to GDP levels tells me that someting structural underlies the reasons Americans end up in this sector.
It’s not the outcome that matters. It’s the principle that these people have put nothing into the system and thus don’t deserve anything from back the system.
And thus you propose to do what which people in such a predicament?
These people do their part. They spend every dollar they get in the local economy thus giving everyone on the income ladder above them the benefit of those dollars until it finally reaches the very top of the income ladder. Unlike putting money in at the top.
I find it so funny when people complain that they spend it on TV’s. It creates the need for a Walmart greeter. Somewhere as that welfare dollar finds it’s way back to the rich man, it even creates an autoworker, and of course it creates a need for a CEO.
The two peaks are recession related. They are not so much welfare policy related nor do I believe Clinton’s “reform” is so much policy related as his period is not much different from Reagan’s.
There are many spending patterns that change during a recession. Here in RI land, I looked at TDI (temp disability ins. paid by the worker) and Workers comp. We had a “crisis” in the early 90’s. WC was rising. OH NO! What to do? We fixed? Only when I went back and looked at the data because I notice more people coming in on TDI, there was no crisis. Every time back to the 60’s (all I had for data) we had a recession, WC went up. Every time. Then it went back down.
This time, with the fix WC went further down. Good? Not really, TDI cost went up in the exact same to the decimal point amount. So, they implimented review processes on TCI for the first time in its history.
Those darn blinders will get us every time.
“These people have put nothing into the system…” Really? Workers pay for UIB and TDI benefits through payroll taxes. They pay sales and gas taxes just like everyone else. They typically get fewer and lower quality public services than more affluent people and live in more dangerous neighborhoods. Why do people grudge unemployed workers and their families the UIB/TDI they paid for? Because when you’re doing ok, you tend to forget how easy it is to lose your job and place in the world from one day to the next.
I worked in SSA for more than 30 years. My job was to help people pick up the pieces of their lives when they fall out of the middle class into poverty. “These people…” are anyone who lives one paycheck away from disaster. That’s maybe half the workforce at any time. When I started following this blog, I was amazed at how little people writing here knew about the realities of daily life in the US. Dan is among the few who understand how our economy really works. Excellent article, Dan. Thanks. NancyO
“…these people Have put nothing into The system and thus don’t deserve anything from back the system.”
Is this a ” compassionate conservative” speaking?
hortron
you ignorant bastard.
those people fought in your goddam wars. most of them were productive workers before their jobs got shipped to china.
at least one welfare recipient (albeit in England) did more for you in his life than oh, maybe a hundred million times your contribution. his name was Michael Faraday. NOt that an ignoramus like you would ever have heard of him.
hortron
those people fought in your goddam wars. most of them were productive workers before their jobs got shipped to china.
at least one welfare recipient (albeit in England) did more for you in his life than oh, maybe a hundred million times your contribution. his name was Michael Faraday. Not that you would ever have heard of him.T
yeah well… this is more of a problem than the facts we’ve all just read…