AEIdeas

The public policy blog of the American Enterprise Institute

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Discussion: (38 comments)

  1. Seattle Sam

    Peace is the same thing as surrender if the enemy simply uses your forbearance to devise new weapons systems. We made peace with Bill (the era of big government is over) Clinton only to get Barack (you can keep you health plan) Obama. Not to mention George (compassionate conservative) Bush who enlarged Medicare.

  2. Good piece. I would note that the President has offered cuts to entitlement programs (which the author supports) in exchange for increased revenue by eliminating distorting tax loopholes (the author also seems to support higher revenue). However, this article implies that the “left” has not offered such a deal. Why?

    1. There are NEVER any cuts in Washington! Don’t you know that? There MIGHT be reductions in steadily rising spending over a long period—-reductions of increases are “cuts” in “Washington-speak.” These “cuts” are bandied about (and demagogued) because there are no budgets or any firm basis of discussion. Without budgets, there are no targets, no allocation of scarce resources, no hard decisions and no management. Budgets are an anathema to liberals like Obama. Totally irresponsible!! OK, I’m finished. :)

      1. We have a growing population and economy. The ratios of spending to those numbers are important. Not the total dollar amount. If you don’t understand that when spending rises by 1% in an economy that grows 2%, it is a legitimate cut, you’re completely lost.

      2. Can’t believe what I just read. Just let the politicians figure out what to do(like the obamacare). Has we lost AEI? I am becoming more cynical every day about the massive pundit industry!

        1. Pat, the AEI is a neoconservative outfit, not conservative. Neoconservatives coined the term “big government” and constantly push it, subtly or obviously. They came to us from the left. The original neocons were Trotskyists.

  3. Morgan Warstler

    Jim, when yo are serious about it, we’ll know bc you’ll ask for a policy that benefits the GOP BASE.

    http://www.morganwarstler.com/post/44789487956/guaranteed-income-choose-your-boss-the-market-based

    There is a way to do the Safety Net, that causes property values in DC to plummet, as the power is pushed out to states.

    There is a way to get the Occupy Wall Street Crowd, the Congressional Black Caucus and the Tea Party together on a new approach to welfare that RUINS the next decade for Wall Street.

    The plan: GI / CYB will win the support of the strangest bedfellows – the three bed fellows that CAN topple the establishment.

    AEI ought to kickstarter a plan to build the GI / CYB open source software and release it for states and other government to use.

    Sooner than later you’ll figure out writing the software IS writing the policy, and it is easier to write it first, and then show it to voters and simply let them demand it.

    Stop having studies and just hire some coders.

    Read the damn plan man!

  4. Let’s see. Under the current SS system, contributing 12.4% of $113,700 for 40 years would mean my total personal contribution total equals $559,404.00. Earning a historical average of 7% would net a nest egg of $2,928,676. But the scholars at AEI think a return of a “flat poverty level benefit” would suffice. Current poverty level for a single person is $11,500. Wow! What a deal. Oh, but these scholars, in their infinite wisdom, are going to force my employer to match my contribution of “at least 1.5%” of my pay into a private retirement account. Oh yeah, that will solve it. If I contribute the minimum to the private account I’ll have paid over 15% of my income (my entire working life) and even earning a good salary, I’ll be slightly above poverty level. Do people actually get paid for thinking this stuff up?

    “The pain from the Great Recession, as bad it was, would have been far worse for middle- and low-income Americans if we were still in a sort of 1920s, Coolidgean world that many on the right these days seem to long for.”

    Nonsense. It’s the exact kind of social engineering these social welfare states require that was a great contributor to the Great Recession.

    “The government social safety net for the truly indigent is one of the greatest achievements of our society. ”

    Which is it? Do we need to take care of the truly indigent or make the working and middle classes indigent themselves?

  5. mesa econoguy

    More garbage analysis.

    As others have pointed out, it is precisely the size and scope of the “safety nets” (which are anything but) which are causing our current economic problems.

    “As currently structured, the US safety net is financially unsustainable and retards economic growth too much, promotes dependency over work, and discourages family formation.”

    This is the logical outcome of all socialist programs – people always vote themselves other people’s money, and once you set up these programs, you’re committed.

    The existence of the safety nets themselves cause the problem, just as government intervention keeps increasing.

    We passed the point of no return a few years ago.

  6. James,

    I think you are very reasonable, and I appreciate your intelligent approach to the many policy issues you address, but I do have a point of contention. First, I do agree with the flat, poverty-level SS benefit you propose. I’m not sure how you would sell it to the millions of older folks who think they are “entitled” to a bigger benefit due to taxes paid and benefits promised. Perhaps a slowly diminishing benefit, over 20-25 years? I’m not optimistic about that kind of foresight, though, from DC these days.

    Which brings me to my bigger concern with several of your suggestions. While intelligent, balanced reform seems like a great thing, we still have to put a TON of faith in an inefficient, bloated government to not ruin a good idea with pork and crony capitalism w/special interests, then failure or fraud during implementation. The US government has proven an uncanny ability to manufacture painful unintended consequences with its legislation in recent years. I’m just not sure I have faith, no matter how smart or well-designed the policies, that it will solve our country’s fiscal issues. I’d like to see one good policy as proof that it’s possible before we get too carried away.

    1. ” I’m not sure how you would sell it to the millions of older folks who think they are “entitled” to a bigger benefit due to taxes paid and benefits promised.”

      “Older folks”? I don’t know about you AG, but I’ve received a statement each year from the SSA that outlines expected benefits I would be “entitled” to at varying ages of retirement given my FICA contribution history. Now I’m aware the Supreme Court has decided I really don’t have an individual claim on that benefit, but you better believe people receiving that statement feel they are “entitled” to it.

      How are you going to “sell it” to younger people who are going to be expected to pay higher FICA taxes and/or higher Federal income taxes to pay current and future retiree benefits and make whole those securities that exist in the SS trust fund (while telling them they can expect a poverty level benefit when they retire themselves)?

  7. john-Galt

    Peace? I should declare peace on the idea that I drag my aching back and swollen feet out of bed every morning to work and earn and pay taxes.

    Taxes that are wasted to pay for children I did not father, women who don’t clean my kitchen and now able bodied men who lay about writing blogs and smoking hash.

    Let me know when peace is declared so I can at long last quit and join the zombie army of moochers and layabouts.

    Peace. Ha!

  8. eleanor r

    I don’t understand why conservatives like Brooks and (generally) Pethokoukis decide to play this liberal game of “false dichotomy.”

    I know Pethokoukis is one of Rush’s favorites, but this column is just wildly off target.

    If either of them can name a serious proposal by any Republican or conservative that would constitute a salvo in “this insane war” on the safety net, then say so.

    But the “attack” has always been directed at reasonable welfare reform, passed by Republicans, signed by Clinton, and doing quite well until the current anti-American in the WH got rid of it.

    EITC has been a target;abuse of the food stamp program has been a target; excessive duplication of “job training” programs has been a target. And there are many other reasonable — that is, far from insane — targets in the abusive welfare state.

    But apparently Pethokoukis agrees with the first and second. I assume both he and Brooks agree with the third.

    Most important, neither he nor Brooks mention the real “villain” of the welfare state…the subsidies/welfare that have promoted and encouraged the single biggest driver of poverty — out of wedlock children at an early age (toss in leaving school, and you have the trifecta).

    Lots of individual battles — EITC — make real sense. But unless we do something about those elements of the welfare state that break down the nuclear family, the “insane war on poverty” will continue just adding more victims to the welfare rolls.

  9. PiedFifer

    I will state the absolutist position: Charity is a luxury available only to productive individuals who have surplus income and a desire to help others with their money and only their money. Moral governments do two things: protecting individuals from initiated force and to adjudicating disagreements related to contracts. There is no redistribution of any kind in moral government. It’s disappointing to see read that collectivism is an “American Enterprise.”

  10. James,

    I’m a big fan of your writing and analysis. But I think you’re way off here. Please read (or re-read) the wonderful book “From Mutual Aid to the Welfare State” by David Beito. This idea that the federal government (or even the state and local governments) can administer and provide our social safety net without massive amounts of fraud, waste, abuse, and even worse – the numbing indifference that occurs in a large welfare state – is fallacy. There is a big difference between society and government. Society is based on individuals and families coming together voluntarily – voluntary participation, voluntary exchange. This is where civic institutions flourish. Government is based on force – forced participation, forced exchange. A politician or bureaucrat can have the best of intentions – it doesn’t detract from the coercive nature of government. The fact that we have major issues with the safety net manipulated by the state doesn’t mean there is an all-or-nothing exchange. Instead, there’s a strong economic AND moral argument for the close-knit civic institutions that do so much good for so many people. When you hand over your responsibilities, you hand over your rights. Just because you need a little helping hand doesn’t mean you should be forced to hand over control of your life.

  11. Nuts!

  12. In reality the war on poverty has destroyed the fabric of the lives of the very people they propose to help. They have become wards of the state and sink deeper and deeper into dependency that they know not how to dig themselves out. Like a wild animal that is fed, eventually it loses the desire and ability to feed itself.

  13. Nexialist

    Middle class working people are paying for both ends of the economic ladder: the poor and large corporations.

  14. Purchasing power remains the same as in 2007 at a price of borrowing an additional $600B per year from other nations. That’s a terrific system so long as you believe the bill never comes due.

  15. I don’t personally know of any of my conservative friends who want to eliminate the legitimate safety nets. But there is nothing wrong with ‘welfare to work’.

    One argument against Pethokoukis’ theory is that the money spent for those programs had to come from the rest of us and would have been spent or invested anyway.

    The reason why true reform won’t happen is that the Democrat’s cat is out of the bag – free stuff isn’t for helping people. It is simple vote-buying. Conservatives want to keep more of what we’ve earned, and give others the freedom to join us.

    1. And what happens when Obama/Dems and RINO’s amnesty kicks in? Prospective immigrants in Mexico are being enticed with food stamps and free health care before they even get here. We are well on our way to a two-class nation….poor and rich. And Obamacare will finish off the middles class, by design. The Tea Party looks better every day.

  16. When did AEi become infested w/ this type of Marxist economics. James Pethokoukis belongs over @ Brookings, if even that group of leftist lemmings would accept this dimwitted ‘economist’!

  17. Time for the Republicans to make peace with slavery.

    – some guy, 1859

  18. TargetDestroyed01

    Mr. Pethokoukis, with all due respect, it is not the American Right that is at war with the Welfare State although Conservatives, Libertarians, and anyone with even a moderate amount of common sense and historical knowledge by every right should be at war with it.

    No James, it is mathematics that is at war with the Welfare State. And math will win that war. It is doing so even now. $17 trillion in debt and climbing, etc…

    You hinted at the problem but I just don’t think you have a full grasp of it. You know the numbers. You know that they cannot work. And you should know that historically the Welfare State…aka Socialism has never worked for very long in all of human history for anyone who has ever been foolish enough to try it.

    Socialism, always leads to tyranny, deprivation, starvation, civil war or some combination of those. ALWAYS.

    And it is always because the numbers that prop up the welfare system can never be sustained. Math is the real enemy to the Welfare State, not Right Wingers. Math does not care if Occupy Wall Street fools say, “it isn’t fair, it does not share, it does not care”. Mathematics does not mind if Rev. Sharpton labels it as “racist”. It does not blink when Liberals scream, “Math just wants to murder children and starve old people.”

    The saddest thing in all is that I think we are too late to do much about it now. That time has passed. All that is left now is to sit back, watch mathematics…declining economies, too many taxes, misspent tax dollars, relocating industries, government incompetence on a nearly universal scale, ever increasing dependency and immorality…all combine to collapse into total failure and waste for generations.

    I suspect that in a few decades, our children and grandchildren will be cursing this generation (along with Obama, Reed, Pelosi, Clinton, Durbin, McConnell, McCain, etc…) to the fires of “Eternal Purgatory” for the lost opportunities for them of “what might have been” if we had never gone down the Socialist path. They will justifiably hate us for not seeing the numbers and stopping this madness. History will not be kind to those that unleashed the Welfare State on what was once a great nation.

    Very sad indeed. TD01

    1. Well said. There isn’t a single possible progressive response to the inevitability of math and physics dictating the results of the incredibly bad political choices made during the past 50 years. And long after idiots like obama and sharpton have returned to dust our progeny will be stuck with the consequences.

    2. Message to progressives: Math sucks, don’t it?

  19. “Oh, and making programs affordable. We cannot redistribute more wealth than we create, after all.”

    Some afterthought, huh? Kind of like: ‘Honey, we really ought to buy that new 12-cyl Benz, ya know?’ Reply: ‘I don’t know about that, dear, considering that we’re bankrupt and unemployed.’ Progressives=idiots

  20. Lee Smith

    Our WAR as it was put has nothing to do with the people who truly need assistance. It has to do with able bodied people who could work but refuse to do so, we have millions of illegal aliens doing jobs they could be doing, it also has to do with the massive fraud that goes on. There is nothing to justify going from the reforms have Bill Clinton put in place to where we are today. The war on property has being a sham, we have spent trillions on it with no progress made whatsoever because that’s how the democrats and race hustlers like it.

  21. Tina Rocha

    I’m first in line to help those truly in need. I’m not here to support those who like to sleep until noon. So, what your saying here is to keep our check books open and our mouths shut? Not gonna happen. If I can do it as a single Latina, anyone can do it. 90% of success is simply showing up. What we really need is entitlement reform NOW since the billions spent on education hasn’t worked in any manner whatsoever!

    1. Well said!

  22. minarchist

    You are out of your mind. It is time to declare war on leftism, on progressivism, on socialism and the nanny state; to launch a full-out assault to see, if by some chance, by hook or crook, it is still possible to rescue American liberty from the progressive tyranny which is swallowing it whole.

    I will be the first to admit, that it is probably too late (we are already sliding into the abyss). But those of us who still have an appreciation for the values upon which this country was founded, for political freedom and economic liberty, for the Constitution, still owe it one last assault against the ignorant, arrogant machinery of statism, that if left unchecked, will surely extinguish the flame of liberty for generations to come.

    Molon labe.

  23. octavian61

    Well about a month ago I was behind a very pretty young lady, about 20 yrs of age or so. She was sporting hip new clothes and a brand new Coach handbag. Her companions were the same, dressed very hip and modern. She had about $100.00 in groceries and guess how she paid for it? EBT or modern day food stamps. I say let’s weed out the fraud and give it to those who REALLY need it! Not to the hip and modern, who can work for a living and provide for themselves!

  24. coffeetime

    An Einstein-like thought experiment. No more cash at all in the United States – all electronic, and every transaction along with every item in each transaction documented. OK, freeloaders, prove to those picking up your tab that you are truly needy. I’m all for helping the truly needy, and I’m sure that most folks – including conservatives – are as well. What I’m not OK with is giving my hard-earned money to someone who squanders it on tattoos, piercings, booze, tobacco and/or drugs, fast food, junk food, cell phones with unlimited texting plans, and a host of other questionable things. Additionally, you’ve gotta work, and I don’t care how menial a job it is. You’ve gotta pick your butt up from the couch in front of the TV set (or chair in front of your computer) and do something to BETTER YOURSELF.

    I know that at age 60, I’m somewhat of a dinosaur today, but I grew up in a very poor household. We never ate out, we hardly ever went on a summer vacation, and all of us kids worked after school, on the weekends and during the summer. We ate cheap food – noodles and hamburger, powdered milk, puffed wheat, PB & J on the cheapest white bread our folks could buy. Nine of us in a small 2-bed, 1-bath concrete-block house (us boys slept in an unheated one-car garage). One blue-collar paycheck supporting all of us. Lots of hand-me-downs. And we all survived, and most of us thrived. I got my college degree going nights, since I worked full-time during the day.

    No, you don’t have to sacrifice like the family in “Cinderella Man” before you are worthy of a handout. But, to quote another movie – “Saving Private Ryan” – you need to “earn this.”

  25. SukieTawdry

    Make up your mind about what you want to discuss, James. “Safety net” and “welfare state” are not the same things.

    I think most people will support a safety net. But I, for one, will not “make peace” with the welfare state nor with the idea that it’s a proper function of government to redistribute wealth from the young to the old, the rich to the poor, the working to the idle. Nor will I make peace with the fact that roughly half the nation’s people rely on some form, and often many forms, of government assistance while at the same time put nothing into the coffers to help pay the freight.

    I’m very willing to discuss the myriad ways to improve and fund the safety net. However, I have no desire to further facilitate the welfare state. The peace you want requires surrender to an ideological position I oppose. No thanks.

  26. Judging by most of the comments here I think you’re not telling your audience what they want to hear James. They want an all out war on the administrative state. The fact that the shock absorbers it provided played a major role in mitigating the impact of the economic crash of 2007-2010 is irrelevant. You and others have been indoctrinating them for years with a bunch of iffy stats and ratios so what do you expect?

  27. jackson wiley

    Your basic point is that conservatism should be accepted as tax collection for the welfare state.

  28. Who has been waging war on the welfare state? If that is the case they sure have not been winning it.

    Sound like your in the woods of your own mind as to what the “conservative” ideology has been. The things you say you promote have always been the “conservative” stance. No one wants to get rid of Social Security or those programs that have proven to be useful and sustainable.

  29. It’s not news to anyone who has had to seek help from the safety net that it’s a disincentive to work. It’s based on the antiquated original stipend offered widows and orphans of Union soldiers after the Civil War. Add a mindset that says as long as you’re capable of work, which in government speak means essentially “breathing,” the safety net is so full of holes it’s a wonder it works as well as it does.

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