Rise of the Welfare State

This morning’s USA Today featured an alarming article which reveals a record number of Americans are receiving anti-poverty assistance.

WASHINGTON — Government anti-poverty programs that have grown to meet the needs of recession victims now serve a record one in six Americans and are continuing to expand.

More than 50 million Americans are on Medicaid, the federal-state program aimed principally at the poor, a survey of state data by USA TODAY shows. That’s up at least 17% since the recession began in December 2007.


More than 40 million people get food stamps, an increase of nearly 50% during the economic downturn, according to government data through May. The program has grown steadily for three years.

Caseloads have risen as more people become eligible. The economic stimulus law signed by President Obama last year also boosted benefits.

—But wait, there’s more—

Close to 10 million receive unemployment insurance, nearly four times the number from 2007. Benefits have been extended by Congress eight times beyond the basic 26-week program, enabling the long-term unemployed to get up to 99 weeks of benefits. Caseloads peaked at nearly 12 million in January — “the highest numbers on record,” says Christine Riordan of the National Employment Law Project, which advocates for low-wage workers.

More than 4.4 million people are on welfare, an 18% increase during the recession. The program has grown slower than others, causing Brookings Institution expert Ron Haskins to question its effectiveness in the recession.

As caseloads for all the programs have soared, so have costs. The federal price tag for Medicaid has jumped 36% in two years, to $273 billion. Jobless benefits have soared from $43 billion to $160 billion. The food stamps program has risen 80%, to $70 billion. Welfare is up 24%, to $22 billion. Taken together, they cost more than Medicare.

Oh yeah, and as Michael Tanner of the Cato Institute points out, these programs are “much harder to unwind in the long term.”  Translation:  Obama didn’t let a “serious crisis go to waste.”

Normally during a recession, more people rely on the social safety net.  But this is no ordinary recession, and President Obama is no ordinary President.  Congress extended unemployment benefits to last nearly two years, out of “compassion” for the unemployed, of course.  Unfortunately, this spending bender that Obama and his minions have embarked upon is helping to kill the economy.  Businesses, particularly small businesses, were decimated by the recession.  Rather than extend all the Bush tax cuts, which would be a positive sign for business, Democrats have made the argument that extending the tax cuts, particularly the ones for the richest Americans, would greatly increase the budget deficit.  I find it funny the Dems are so concerned about the deficit:  They should have thought about that before they passed a “stimulus” bill that cost more than the War in Iraq!  If the spending actually created jobs, I wouldn’t be so angry.  But most of the spending was on wasteful, pet projects like $9.3 million for a “coordinated colony of robotic bees“!

All that money could have been spent to create actual jobs.

How, you ask?

What about broad-based tax cuts?

This would have put more money into the hands of consumers, allowing them to spend as they please.  Spending=revenue for businesses=money to spend on hiring people.  And the tax cuts have to be rate cuts, not the pathetic tax credits that were in the stimulus bill.  Those don’t really stimulate the economy.  Case in point:  The new home buyer tax credit which front-loaded demand, resulting in a growth in sales while the credit was in effect, but once expired, housing sales took a sharp dive.

Obama and his ilk have taken advantage of this crisis to “fundamentally transform America.”

Once the economy recovers, in spite of Obamanomics, the newly-created welfare state will remain.  More people will be on Medicaid thanks to the health care bill.  More people will be unemployed because of tax increases.  And more people will be on the government dole, all because Obama didn’t let a “serious crisis go to waste.”  Behold, the rise of the welfare state!


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