Submitted by Tyler Durden
Exactly two years ago, some of the more
politically biased progressive media outlets (who are quite adept at
creating and taking down their own strawmen arguments, if not quite as
adept at using an abacus, let alone a calculator) took offense at our
article "In
Entitlement America, The Head Of A Household Of Four Making Minimum
Wage Has More Disposable Income Than A Family Making $60,000 A Year."
In it we merely explained what has become the painful reality in
America: for increasingly more it is now more lucrative - in the form of
actual disposable income - to sit, do nothing, and collect various
welfare entitlements, than to work. This is graphically, and very
painfully confirmed, in the below chart from Gary Alexander, Secretary
of Public Welfare, Commonwealth of Pennsylvania (a state best known for
its broke capital Harrisburg). As quantitied, and explained by
Alexander, "the single mom is better off earnings gross income
of $29,000 with $57,327 in net income & benefits than to earn gross
income of $69,000 with net income and benefits of $57,045."
We realize that this is a painful topic in a country in which the
issue of welfare benefits, and cutting (or not) the spending side of the
fiscal cliff, have become the two most sensitive social topics. Alas,
none of that changes the matrix of incentives for most Americans who
find themselves in a comparable situation: either being on the left side
of minimum US wage, and relying on benefits, or move to the right side
at far greater personal investment of work, and energy, and... have the
same disposable income at the end of the day.
Naturally, the topic of wealth redistribution is paramount one now
that America is entering the terminal phase of its out of control
spending, and whose response to hike taxes in a globalized, easily
fungible world, will merely force more of the uber-wealthy to find
offshore tax jurisdictions, avoid US taxation altogether, and thus
result to even lower budget revenues for the US. It explains why the
cluelessly incompetent but supposedly impartial Congressional Budget
Office just released a key paper titled "Share of Returns Filed by Low- and Moderate-Income Workers, by Marginal Tax Rate, Under 2012 Law" which carries a chart of disposable income by net income comparable to the one above.
But perhaps the scariest chart in the entire presentation is the
following summarizing the unsustainable welfare burden on current
taxpayers:
- For every 1.65 employed persons in the private sector, 1 person receives welfare assistance
- For every 1.25 employed persons in the private sector, 1 person receives welfare assistance or works for the government.
The punchline:
110 million privately employed workers; 88 million welfare recipients and government workers and rising rapidly.
And since nothing has changed in the past two years, and in fact the
situation has gotten progressively (pardon the pun) worse, here is our
conclusion on this topic from two years ago:
We have been writing for over a year, how the very top of America's social order steals from the middle class each and every day. Now we finally know that the very bottom of the entitlement food chain also makes out like a bandit compared to that idiot American who actually works and pays their taxes. One can only also hope that in addition to seeing their disposable income be eaten away by a kleptocratic entitlement state, that the disappearing middle class is also selling off its weaponry. Because if it isn't, and if it finally decides it has had enough, the outcome will not be surprising at all: it will be the same old that has occurred in virtually every revolution in the history of the world to date.
But for now, just stick head in sand, and pretend all is good.
Self-deception is now the only thing left for the entire insolvent
entitlement-addicted world.
* * *
Full must read presentation: "Welfare's Failure and the Solution"
Some other thoughts on this topic: DOES IT PAY, AT THE MARGIN, TO WORK AND SAVE?
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