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September 24, 2012 4:59 pm | AEIdeas
James Pethokoukis @JimPethokoukis
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From AEI’s Nicholas Eberstadt:
Very faulty logic and incomplete arguments. Pretty sloppy analysis.
What logic, argument, analysis? It is a listing of assertions (“Myths”) and data (“Facts”).
But, what’s up with Myth Nos. 1 and 5 being the same?
One and five are the same?!?!
Have you considered all the federal weatlh transfer schemes (financed with extorted tax dollars) post 1960?
From the Cato Institute: The American Welfare State – How We Spend Nearly $1 Trillion a Year – Fighting Poverty—and Fail
by Michael Tanner
Federal welfare spending alone totals more than $14,848 for every poor man, woman, and child in this country…
@juandos – WRT 1 and 5 being the same, when the chart was first published (I still have my copy of the email announcing the post), both #1 and #5 were titled “Few nonseniors receive government benefits”. The title has since been corrected.
Mr. Pethokoukis seems to suffer from selective amnesia. When the subject is the composition of income levels, he is quick to try to refute the idea that the playing field isn’t level by pointing out that people move from one group to another:
When the subject is people receiving government benefits, he suddenly forgets completely that this is also true of that group. For example, students receiving Pell grants aren’t in that category forever. Nor are people receiving unemployment benefits.
He likewise fails to recognize, or perhaps only fails to admit, that someone who receives some government benefit may pay far more in taxes than the value of all benefits received. For example, even very wealthy people may qualify for Social Security and Medicare, yet pay more in federal income taxes than the value of the benefits they receive under these programs. So they would still be in the “maker” category, not the “taker.”
Perhaps I should call these the dirty little secrets of “taker” alarmists like Mr. Pethokoukis.
While I agree that the people receiving benefits aren’t a stable group, how is that relevant to myth #3, that a great percentage of the total population are takers now than in the past?
@Frank Rhoad – There are multiple questions on that one, questions that can’t be fully answered until the book making the claim is published next month so that its sources and methodology can be inspected.
One question is how much of the 2011 figure was attributable to people on unemployment insurance, a temporary condition. In other words, is the 49% a local spike or a sustained number?
The mobility issue also affects the political relevance of the figure. If the taker class is permanent, they may vote to increase their benefits and/or taxes on the makers. If they view their status as temporary, they will vote their perceived long-term interests.
There is no question that there’s a long-range upward trend due to the baby boomers retiring and going onto Social Security and Medicare. But to my mind, the more important question is not the percentage of people receiving _some_ government benefit; it’s the percentage of people who are _net_ takers. Retirees drawing down their non-Roth IRAs and 401(k) plans are subject to income taxes, and may still be net contributors rather than net takers, with an interest in restraining taxes and spending.
Great article documenting the growth of the welfare state.
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