When Work Is Punished: The Tragedy Of America's Welfare State

Tyler Durden's picture

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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BLOTTO's picture

Work ruins your life.

slaughterer's picture

"... for increasingly more in America, it is more lucrative to sit, do nothing, and collect various welfare entitlements, than to work."  

This has been going on in social democratic Europe for decades.  Even in countries with alleged work ethics like Germany.

fonestar's picture

I sense a 50% correction in the population of T-Bill bubble babies coming on...

NotApplicable's picture

This article should be titled, "Fuck You, That's Why!"

Beam Me Up Scotty's picture

Exactly.  And in any bracket, if your taxes end up being 60% or higher when you combine income, sales, property taxes and other fees associated with government, who wants to work for 10 days and give 6 or more of those days of work to the government?

Some idiots propose a 90% income tax on the highest earners.  Who is going to work 10 days so that you can keep one days pay?

Time to tell the parasites to get off their dead fat 400# asses and get to work.  Time to tell single mommy that if you can't afford the 4 kids you have, you shouldnt be having a fifth.

If you are on a government program, you shouldn't get to vote.


Real Estate Geek's picture

If you are on a government program, you shouldn't get to vote.

+1, and I'll raise you one:

Here's a quick, easy, and relatively cheap way to get this country better positioned for the future, both financially and genetically. 

 Give a free iPhone / iPad and, say, $5,000 to anyone who: (i) is in the bottom 25% of the IQ distribution; (ii) is fertile; and (iii) is willing to be permanently sterilized. 

Participation would be purely voluntary. 


my wag's picture

I'll raise you 1:

If you get govt contracts or work for companies that get govt contracts: NO VOTE

If you are an elected govt official: NO VOTE

If you process bonds or other monies for govt: NO VOTE

If you are married or family of any of the above: NO VOTE


How you like them apples?

CrockettAlmanac.com's picture

How about everybody gets 100% sovereignty over their own person and property but not over anyone else or their property?

darteaus's picture

And, if the politicians can't balance the budget, they - and their immediate families - should pay an immediate 20% wealth tax.

GeorgeHayduke's picture

"If you are on a government program, you shouldn't get to vote."

This should include include defense contractors and people who work for bailed out banks.

OutLookingIn's picture

Excuse me.

Lovta chat, but gotta go.

I gots to get me one o them Obama phones.   

hedgeless_horseman's picture



Will vote for food, phone, housing, energy, utilities, healthcare, education, and cash.



What type of benefits are you looking for?

Skateboarder's picture

Is there financial assistance for me to pay someone to wipe my arse for me? Surely that has to exist.

hedgeless_horseman's picture



...someone to wipe my arse for me?

Living Assistance

Skateboarder's picture


Living assistance surely includes cooking, cleaning, etc. Are you telling me that signing up for this program means a chef, a janitor, and a professional arsewiper will assist me with my living? This welfare stuff sounds better and better each day.

hedgeless_horseman's picture



I do not know about a chef, a janitor, and a professional arsewiper, but I can absolutely guarantee a Community Organizer will be available to assist you come election time. 


Skateboarder's picture

Ah, I was going to reply to your earlier comment of Environmental Sustainability / Conservation. That's a nice one to get free money for. I recycle my paper and plastic... that's worth $300 a month in welfare, right?

And I did think about the tax one... now I can't function for the rest of the day. Let's see here... take taxes from private sector employees, go into debt at the national level on the order of tens of trillion dollars, and give free money as negative income tax to welfare recepients...

p.s. how do you display images? There's a tiny little smiley gif that really needs to go in this post.

hedgeless_horseman's picture



And I did think about the tax one...

Consider how a house-trained dog will whine and beg to have its collar and leash put on.

SMG's picture

This is all by design.  Sheep being herded and fattened for the slaughter.  It will painful to watch when the end comes.

Supernova Born's picture

Hi, Gold Bitchez?

We, FSA MoFo's are coming for your gold. GRILLZ is a right!

TruthInSunshine's picture

The illusion of political choice.

It's not complicated despite the government's and their Main Stream Media Propaganda Outlets' (whether Faux News Corps or msnBSc) best efforts at telling the sheeple otherwise:


If you're an honest, ethical person, who is running a productive business and playing "by the rules," and EVEN IF you are doing well (and that's a big if that depends on many factors, including skill, competency, what you do, make or provide, and yes, luck - timing isn't everything but it can be critical), you are getting a giant dildo shoved up your ass daily and deep, to compensate for the Deeply Captured, 100% corrupted political & judicial (same thing, really) puppets, who are doing everything in their power to see that more and more of your revenue, sweat, toil and labor is being sucked away to fuel the giant mammary gland that is paying for and subsidizing:


1)  The too-big-to-fail banking/Financial/Wall Street/Defense Contractor-Firm/Government Union (where 1 in 11 Americans works for federal, state or local gov't, NOT including "contractors) cocksuckers that not only don't create value or "wealth" that benefits society, but that suck away productivity and wealth with wealth destroying "products," financial or mechanical (think nuclear subs and defective wunderjet-fighters we don't even need, and think of ETFs and CDOs and other financial "products" that not only re-shuffle funds, due to TBTF politics, but suck it up and vaporize it);




2)  The do-nothing welfare class, that gets SNAP-EBT, Social Security, Social Disability Insurance (for injuries that are probably at least 50% fake), Medicare, Medicaid, taxpayer "benevolent" gifting of student loans to Everest University et al., extended UI, aid for this-that-and-the-other-things for filling out county department forms, etc. etc. etc.


Sell your soul and join either 1 or 2 above, or if you're still making money running an honest, productive business despite Deep Capture's best efforts to suck all the life out of you, see how long that lasts and run with it, or shrug and go back to essentials and self-sufficiency as a moral and practical stance against the deeply sick, corrupted, Roman-esque Empire rot we're living through, bitches.


p.s. - Prepare for the ultimate BOHICA-FUBAR if you're a person who works for revenue or owns a business that generates revenue and productive, society-beneficial services/products once the "new moar better" tax structure is implemented, because rest assured it will brutalize the actual producers that remain, while giving even more preferential treatment to the CronyKomradePlutocracyClass AND the welfare class, while reaming the remaining productive class even more thusly.

Beam Me Up Scotty's picture

"taxpayer "benevolent" gifting of student loans to Everest University et al"

Yes, how would Tylers chart look if you overlaid a full ride college education for a welfare baby or 2 or 4 look?  That is a huge expense that isn't even included in that chart.  Say $100k/kid for a 4 year education.  Have 2 kids, thats $200K.  Over 40 years thats $5k/year to add to welfare mommies income.  More kids?  No problem, thats even MOAR money for said welfare queen.  And thats not factoring in any kind of inflation.  The government will shield her from the effects of inflation, they will just pay the higher tuition costs.  Meanwhile, the couple making $150K/year won't get any freebies, and will have to pay for their kids college with after tax dollars that are depreciated every year by inflation.

Time to go Galt?

JLee2027's picture

I swear one day I'll wake up and the world will have reverted back to normal - where a man goes to work, keep the fruits of his labor and not worry about an IRS or some or Government scumbag letter in the mailbox demanding money. I've been waiting 15 years for these -uckers to die or be killed off in a crisis. I'm content to wait, but like many, there is a tremendous anger inside me. I think he's really pissed. And you know who "he" is. Hurricane Sandy was a warning, I do not believe in coincidence. Greg Hunter says we face a financial Noah's Ark of Biblical porportions. That will be interesting. Yes, grandkids, one day I woke up and the entire planet was broke. Except for the lucky few who stashed physical Gold and Silver. They were the new elite rich.  I'm dreaming right?


TruthInSunshine's picture

OT, but another piss&vinegar subject for me - Cuomo requested 42 billion USD and Bloomberg a separate 19 billion for New York State & City Sandy relief.

It only took them a few weeks to tabulate those highly accurate numbers that are reflective of actual damages, cuz' that's how they roll.



Michaelwiseguy's picture

I go John Galt as often as possible. I've fucked over a dozen of my employers over the past 30 years by up and quitting on them with no notice. I usually pick the busiest time of season to stick it to them.

Umh's picture

Giving Galt a bad name; that's what you're doing!

John Skookum's picture

"I go John Galt"

"my employers"

Not clear on the concept I see.

boogiedown's picture

sounds like you have a qualifying mental disability, so yes

marathonman's picture

Welfare is the political stabilizer that greatly accelerates the theft of wealth via the central bank.  When properly understood it is a great invention for holders of government bonds.  It also lets you know when to trade out of your government bonds for hard assets when it all inevitably goes FUBAR.  When sovereign debt/GDP ratio goes north of 90% time to load up on hard assets cause you know the gig is up and the SHTF.

in the dark's picture

Is there a box that simply says " All of the Above" ?



bigdumbnugly's picture

i love to work at nohting all dayyyyy

we be takin care of bizness every day

...and workin ovetime


IBelieveInMagic's picture

Now you understand the power of the reserve currency! 

Supernova Born's picture

Fiat paper is the astroglide of socialist confiscation.

NotApplicable's picture

I was unaware that people without jobs could get over $15k for daycare.

But hey, in government, that's a win-win. Destoying the home and the workforce at the same time!

Skateboarder's picture

"Hi, we're from the government and we're here to babysit your kid."

optimator's picture

And when he goes to school we'll feed him two meals, bus himto a nice school too.  At this rate it'll be cheaper to keep the kid 24 hours a day..

Kobe Beef's picture

Once he gets out of school (functionally illiterate, unskilled and unemployable, with low IQ and low impulse control, steeped in a toxic culture glorifying violence) and commits a crime, we'll feed him 3 meals and indeed keep him 24 hours a day at a cost of $45,000 per year.

Of course the Prison Industrial Complex is happy about this arrangement, as are the Public Employees' Unions, and every lawyer and judge he will meet along the way. This dysfunctional cycle is truly institutionalized in the USSA today. The Plantation System gone federal.

Pool Shark's picture



It's worse than you know:

In California, we pay upwards of $800.00 per kid per month, and the money goes directly to the daycare provider (with no payroll taxes whatsoever since it's contract labor).

Here's the rub: since there is a shortage of daycare providers in California; we pay the money to RELATIVES of the children. That's right; grandma/grandpa/aunt/uncle (usually welfare mother's new boyfriend) gets $800/month per kid to sit around with the kids while mom (allegedly) looks for work, gets her GED or flips burgers.

Here's the ugly part: there is no oversight in the daycare program. Grand jury estimates put the amount of fraud in the program north of 60% (either the kids aren't being watched, or the welfare mother isn't actually working/looking for work.

We are so screwed...


darteaus's picture

That comment is RAYCYST!

Kobe Beef's picture

and also true. And thus a doubleplusungood thoughtcrime in our PC marxist collective.

hapless's picture

We are so screwed...

Pussy = Profit Center

centerline's picture

Previously for things going in, now for things coming out.

Abiotic Oil's picture

"If I just have another kid I'll qualify for a new free minivan and a new free house. And my oldest is almost old enough for her own Obamaphone.  Now all I need is another baby-daddy."

Aloha's picture

Who's the kill-joy that seems to have a problem deciphering sarcasm today (thumbs down)? OR are there this many

progressive/marxists that frequent ZH?

U4 eee aaa's picture

and i'll bet you don't even need to be a US citizen to collect ;)

TruthInSunshine's picture

No hablo ingles hasta la vista.

Donde esta la biblioteca?

darteaus's picture

That is so productive they may get in trouble with AFSCME!

brady's picture

$15k? My wife looks for responsible parents when she enrolls children in her daycare. Apparently we've been leaving thousands of dollars on the table by not targetting bottom feeders. Looks like I get to tell her SHE was wrong tonight!

Grinder74's picture

Let your wife know I'm available for "services" since you'll be sleeping on the couch tonight.