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Thursday, July 19. 2012
Welfare and Trust Fund Mentalities, plus the Disability Scam: "Doc, I'll pay you $1000 cash to complete my form for me."
The very good Whittle video we posted this morning revealed that government in the US provides an average of $65,000 annually in funds, "benefits," and entitlements to poor families in the US. (Little or none of this is counted as income in calculating US poverty stats, as far as I know, nor, of course, does it take into account off-the-books cash income which seems pretty common these days.)
That's roughly the yield of a $2 million trust fund invested at a safe 1-3%, if my assumptions are correct. It's not a hard sale to convince people to vote for their own $2 million trust fund delivered by magic unicorns.
(The current fad for easy Disability and food stamps - anybody can get these things right now and I receive calls daily asking me whether I do Disability forms - is a whole new arena for free stuff, but a different topic. No, I do not do Disability forms on principle because I believe everybody is capable of dignity and self-respect. Speaking of cash, I have been offered good hard cash to fill them out for people in the last couple of years. On the phone "Doc, I'll pay you $1000 cash to complete my form for me.")
I have had plenty of experience with trust fund people, and am even fortunate enough to be the recipient of a very modest one myself, far less than $2 million in capital due to generational dilution. While some use their trust fund luck for productive purposes, many, it seems to me, lead relatively unproductive if not decadent, purposeless, and unstructured lives. People with meaningfully-sized trust funds, and families on the dole, have more in common with eachother than either has with the middle class.
As we often say here, real life is scary and challenging for almost everybody else. I am not convinced that that is a bad thing. It's the nature of real life and helps bring out the best in us. People spend money for lottery tickets just to enjoy the momentary fantasy of security and ease. Security and ease are infantile fantasies in this world which presents one problem after another.
Here's a piece on the psychology of dependency which echoes some of my own views: Infantilizing Leftist Morality
Read it all. My view is that every American kid is born with a trust fund: their body, mind, soul, opportunities, and the remarkable free culture at hand. Amazing gifts which are rare on this planet. With all of that, nobody needs to lead a life which wastes his talents and capacities, or neglects his spiritual development.
I should add that I have no problem with trust funds per se (and have doubts about the whole idea of inheritance taxes too, which hit small family farms and businesses but never the very wealthy. America should welcome and ecourage family wealth-building, which reduces dependency). Similarly, I have no problem with the safety net for the very poor and/or dysfunctional. I do find it remarkable that American poverty benefits net out higher than the average American worker's income, which, like a good-sized trust fund, can be a perverse incentive for the weak in spirit. That's a shame, but people make their choices and not all Americans, unfortunately, have absorbed the American "Can Do" attitude.
Governments are marketing the "You Can't Do" attitude. It sells.
"Doc, I'll pay you $1000 cash to complete my form for me."
The current fad for easy Disability and food stamps - anybody can get these things right now and I receive calls daily asking me whether I do Disability forms - is a whole new arena for free stuff, but a...
Tracked: Jul 20, 17:08
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The tens of millions of American families who receive no benefits yet earn less than $65,000 should be furious.
You get more or what you reward, so expect millions more to rush onto the dole.
A few more years of socialism and America is toast.
The amounts cited here are simply unbelievable! Are there any more detailed distributions available, i.e. what types of welfare are these (i.e. disabled, mentally ill, or just families who produce children and claim the benefits for their offsprings)?
A local elementary school Principal told me that one of her student's households receives $6,500. a month in government assistance. This is a household with 2 unmarried adults co-habitating, who each have 2 children. To the government paper pushers, these two probably claim to be single parents.
In the courthouse where I work, the plaintiffs and defendants who are clogging up the system and wasting the taxpayer's money quarreling in front of a judge often claim to be "on disability" or "looking for work" yet they all have cellphones, and arrive in their own cars.
I would love to do some investigating and write some stories about what is really going on, because this taxpayer rip off is right out in the open, but it's not being talked about.
I'm not sure the $65,000 per family is correct. I believe the number was developed by taking the total spending in benefits and dividing it by all the families who receive them. It would astound me if this was, in fact, the real number.
But even if that number is reduced to account for the facilitators and systems required to provide benefit provision, the point is still accurate. Assume we drop it to $45,000 and take that $20k per family to 'cover costs'.
This says two things. At $45,000 in average benefits per year, "poor" families make much more than most of the people I have working with me here in New York City.
The costs of maintaining a system of benefits is far too high, making the value to cost ratio imbalanced.
Years ago, I had a college professor who told us that it was illogical for welfare mothers to have children, because even though they got more from various services, it was never enough to cover the costs of adding a child.
I argued it's unfair to assume these mothers use a logical relationship between cost and value. All they see is "more money". Therefore, if they realize they get $500 a month for each additional child, that's $500 they don't have now. If they could, they'd be inclined to pop out a child a month as part of their moneymaking scheme.
Studies later proved this to be correct - the rational relationship of efficiency does not typically take place in these households, which is exactly part of the reason why they are so poor in the first place.
I have a personal commentary, because this is exactly the kind of irrational behavior I've see from my sister, who is incapable of keeping a job and when she stumbled on to a windfall of money used it to buy a home 2 1/2 hours from her place of work - eventually causing her to lose her job because she was late each day. Yes, losing her job meant losing her house.....and so it goes.
The poor are, typically, poor for a reason. I'm not implying people don't deserve a safety net, or help at times. But the old saw of "teach a person to fish" rings true.
I hear a sense of entitlement that seems to be part of american fabric, including those who are extraordinarily wealthy, such as those who ship their monies to Cayman or places such as that to avoid paying US taxes. The less wealthy in the US may just be absorbing this sense of entitlement . When the superrich can use various tax maneuvers to pay less in taxes than their secretaries, why should n't others follow that cultural attitude?
The dilemma with this type of entitlement is that those of us who pay good taxes are subsidizing the entitled (wealthy or not), but we have little or no say in how our tax monies are spent. For instance, if I think of paying money (taxes) as a kind of investment, I want to decide how it is spent. If I subsidize someone's childrearing , I believe I should have say in how the children are reared. Ibid for subsidizing someone's offshore tax shelter; I'd like to decide how my higher tax rate will be spent on that person's wealthy life-style.
For sure, I want to decide about how my defense dollars are spent (and the lives that follow the dollars)
My wife works as a tax preparer and tells me of people who are irate because they aren't getting an $8000 EIC and Child Tax Credit windfall from Uncle Sugar.
Back in the days of my drug delirium (early 70's before I joined the human race) , I remember the street slang in New York state for the welfare office was the Wells Fargo office. True dat!
Interestingly, I was just back in western NY and read in the local paper of people migrating to upstate NY because of the incredibly liberal benefits for the indigent. They get a cash stipend, a rent stipend, food stamps and medicaid cards good for dental and eye care. I went to a subsidized apartment tower looking for an old crime partner and found most of the residents fat, unkempt and permanently cut off from productive life. They probably haul a voting machine out to the tower so they don't have to get off their fat asses to exercise their right to vote themselves a cost of living increase each election cycle. What did Rome look like at the end of its shelf life?
And yet the mentally ill remain poor. How do we explain that?
Perhaps if everyone stops their heavy breathing for a moment becoming irate at scenes they have viewed from a distance and believe they understand, we can look at the actual numbers a bit.
If I have a new admission who receives SSDI $753/month, has their QMB paid, gets a shelter (section 8) subsidy and utilities totaling (99.90, 518.00, 213.00) another 831, and has Medicare & Medicaid (what's that worth, $10,000/year?), that's about $29,000 total. Throw in $200 in food stamps, some APTD, and you are still at only half of that $65K. And I would call that a person who is very well set up my MH standards. I would breathe a sigh of relief to see those numbers.
So where is all this other money going? I am guessing that sophisticated staffed placements for badly-disabled people may be a lot of that. Those eat up a lot of change fast when you have two clients in a house who need to have round-the-clock staffing.
We could decide not to do those, I suppose. I don't know what we would do with disabled adults whose parents are no longer manning the ramparts, but we could do something else. What do you think?
And these aren't liquid assets that people can spend as they please, note. Very little of it is cash. Tough to buy a car, go for an overnight fishing trip unless someone brings you, eat out, etc. But yeah, it's expensive.
I think 100%VA Disability with Tri-Care may come out near $65K. We could change that, I suppose.
The assumption that every person you hear about on disability is soaking the system for $65,000, or anywhere near it, is just false.