Posted by Tim Bryce on May 1, 2011
Federal entitlements in this country take many forms; Social security and Medicare/Medicaid are perhaps the best known, but there is also unemployment, food stamps, and a wide variety of tax subsidies established by Congress to assist special interest groups. Such entitlements are at the heart of the current round of budget talks in Washington, DC. Wanting to know more, I began to research the government’s revenues over the last 100 years and compared it to the country’s Gross Domestic Product (GDP) to see if there was some sort of correlation between the two.
To keep the study simple, I used statistics referring to Welfare only. In the process I discovered our expenditures are up 262.5% since 2001 (just ten years ago), and a staggering 15487.5% since 1961 (50 years ago). Since President Obama has been in office it has risen 154%.
Here are the actual Welfare expenditures by year (in billions of dollars):
2011 – $495.6B (estimated)
2008 – $322.3B
2005 – $252.5B
1995 – $137.9B
1985 – $ 90.4B
1975 – $ 36.9B
1965 – $ 6.6B
1961 – $ 3.2B
1955 – $ 2.0B
1945 – $ .8B
1935 – $ .6B
1925 – 0
The GDP has long been used as a measure of our productivity. Since the end of World War II we have been approximately doubling the GDP (or better) every ten years until about six years ago when it slowed considerably and appears to be stalling and quite possibly beginning to decline. There are several possible reasons for why this is occurring but that is irrelevant for the purpose of this article (frankly, I tend to believe it is mass stupidity).
While the GDP has essentially peaked, our expenditures on entitlement programs are still skyrocketing. This means fewer people are working to support more people who are jumping on the entitlement bandwagon, and this should disturb all of us still working. It also means there is strong evidence the current system is weak and being exploited by able bodied people. Cheating the system is bad enough but I am more disturbed that the government is creating a dependency on such programs thereby rapidly creating a welfare state. Lending a helping hand now and then is one thing, causing an addiction is another.
You often hear politicians talking about a “social contract” with the nation, that taxpayers must take care of anyone who is poor or distressed, regardless if they were the cause of their own problems. I must have missed the memo on this as I do not believe in being my brother’s keeper, particularly if he is a deadbeat. It is certainly not because I lack compassion, I have given more than my share of donations to worthy causes over the years, I just resent being told how to spend my money, but this is a subject for another time.
All of the government entitlement programs may be well intended but they also have the tendency to create an addiction to them. For example, the more welfare one receives, the less likely he will seek work to get off it. There is nothing wrong with a safety net, but you have to get out of it after you have been saved. In other words, such programs tend to crush ambition and create wards of the state. I contend the skyrocketing welfare expenditures have a significant impact on our GDP, and the higher it goes, the more likely the GDP will continue to decline.
It is rather disturbing to know it is next to impossible to fail in this country, that there is always a federal agency ready, willing and able to bail you out. By doing so, they are weakening the country through this entitlements addiction, and I mean this in every sense of the word, a physical dependency. I have yet to meet anyone productive who was addicted to drugs. Once a person is hooked on entitlements, their spirit changes noticeably. Curbing entitlement expenditures will not only save us money but will force people to lead productive lives again.
There are those politicians who believe people are too stupid to manage their own affairs, that they need “Big Brother” to take care of them and tell them what to do. This is all part of the dumbing down of America. The reality is there is nothing wrong with being a little hungry, it can motivate you greatly and force you to assume responsibility for your actions. I tend to subscribe to the old Chinese proverb, “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.”
Let’s teach people how to fish and get them off the payroll.
Keep the Faith!
Note: All trademarks both marked and unmarked belong to their respective companies.
Tim Bryce is a writer and the Managing Director of M. Bryce & Associates (MBA) of Palm Harbor, Florida and has over 30 years of experience in the management consulting field. He can be reached at firstname.lastname@example.org
For Tim’s columns, see:
Like the article? TELL A FRIEND.
Tune into Tim’s THE BRYCE IS RIGHT! podcast Mondays-Fridays, 7:30am (Eastern).
Copyright © 2011 by Tim Bryce. All rights reserved.