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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centerline's picture

The short answer is yes.  There is an actual incentive to have more kids in order to increase welfare benefits.  Great system huh?

alien-IQ's picture

Yes, fire all government workers and cut off all welfare recipients. Surely that'll fix everything. Brilliant.

LawsofPhysics's picture

I'd argue that it would in honest, hard-working, communities.  Know your neighbors?  You fucking better.  Don't be small minded and think the wealthier neighborhoods would in some way act more civil.  Ask yourself, where's the food, water, and firepower?

alien-IQ's picture

Yes, the Amish will be just fine.

adr's picture

I know a lot of Amish. My uncle teaches thier kids. We woould be welcome since I know how to use a hammer and a saw.

CaptainObvious's picture

Not in my state they won't.  The Amish will represent free food to the starving denizens of Filthydelphia, who will unerringly migrate west like locusts.

Kobe Beef's picture

Sterilize all welfare recipients. They have no right to continue forcing other people to pay for their mistakes. We have multiple generations of parasites born on welfare, overtaxing public services, hospitals, schools, and ultimately, prisons. This vicious, dysgenic cycle must either end humanely or in ashes.

alien-IQ's picture

Why not take it a step further and just assassinate anyone who is ever late on a payment?

You really deserve a brutal beating.

Kobe Beef's picture

Try it. Try to beat my principles out of me. I will gladly float your corpse back home.

Otherwise, understand that what I have proposed is a humane response to the deleterious social policy of today. Encouraging generational poverty, decaying cities, dysfunctional schools, the redistribtionist state, parasitism, violent crime, and huge prison populations is not the answer.

Cathartes Aura's picture

jeezus, which is it?

sterilise 'em or force 'em to give birth??

Kobe Beef's picture

Was I not clear enough the first time? Sterilize them. Norplant, tubal ligation; whatever is consistent and cost-effective. Compare the cost of this simple, humane procedure with the social costs incurred by the cradle-to-grave Welfare State and the Prison Industrial Complex.

And keep your strawmen to yourself, thank you.

Cathartes Aura's picture

sterilise "them"?  the wombs you mean?  not the more simple *snip* of a vasectomy?

ooooh, no, can't be doing that!!  gawd forbid the sperm donor, who can make multitudes of baybeez every week if he only puts his *cough* mind to it - whereas a pregnancy will occupy a womb *cough* for at least 9 months.

my "strawmen" references a certain voter demographic strongly evident here, and policies desired, and I suspect you realise this.

Kobe Beef's picture

Did I not say "Sterilize all welfare recipients"? If not, let me say it here: Sterilize all welfare recipients. That way you cannot pretend to misunderstand me again. So, if the males are receiving welfare benefits, then sterilize them too. Snip away. My policy desired is simply removing the burden on our overtaxed society in a humane way. More humane than the poverty- & prison-farming system of today..

So reference "whatever voter demographic strongly evident" you think will best obfuscate my statement. Go ahead, because you're fooling no one. If you cannot read nor hear, it's because you are trying too hard to characterize and redirect. So squirt your little ink and disappear already.

eaglerock's picture

Let's say there was no such thing as welfare, and my unwed daughter had a child that I was stuck supporting.  I would tell her she could not have any more children if she wanted me to keep supporting her.  That would be considered 'tough love'.  If the government says this, it is called immoral and inhumane.  Crazy!

Cathartes Aura's picture

if your "unwed daughter" has a baby, and you were supporting her, and she kept having sex with her "boyfriend" and kept getting pregnant - would you expect her to continue giving birth?  and at any point would you ever think to have a conversation with the fathering person?

I'm in no way defending lack of awareness about how pregnancy happens, for any of the participants - but I do find it very telling that only the "mother" is EVER mentioned as "at fault" - and that Constitutional Amendments are drafted to control only the womb, not the sperm donor.

eaglerock's picture

I am not telling her she can or cannot have any more children, and let's say I have no clue who the father is.  What I am saying is that if she does decide to have another baby she gets no more money from me.  Her choice.  Not sure why it is immoral for the government to give people that choice.  I guess if the choice was between no welfare and going on birth control, most people would choose birth control. 

Cathartes Aura's picture

I understand the point you're making - that you'll draw the line at assistance should the behaviours remain unchanged.

what I am pointing to is the Repub party continuing to promote the Sanctity of Life type amendments which will FORCE women to give birth, by Constitutional Amendment, by awarding the zygote - not foetus, but zygote - personhood status.

and I realise I am boring with this topic, but it never ceases to amaze me that, even AFTER the whole voting season so recently behind us, so few here have a clue about this.

particularly because of the precedence it sets.

alien-IQ's picture

If Sterilization based on economic class is your idea of "humane"...then you have no principles, just a misguided sense of superiority and some seriously pent up hatred.

This thread has really bought out some ugliness in people, but few have touched the grotesque level of degeneracy and loathing that you have managed to achieve.

Kobe Beef's picture

"Seriously pent-up hatred... grotesque level of degeneracy". That's cute. You win the ad hominum prize for the day. In exchange you can tell me how a system which births children into a lifetime of grinding poverty, brutal violence, civil destruction, and mass incarceration is better than a little preventative medicine.

I did not say sterilization based on economic class. I said sterilization based on economic behavior, that of economic cannibalism. This is not based on some sense of superiority and hatred. It is based on the firm understanding that a society growing a permanent, State-sponsored underclass cannibalizing the productive will not survive. Choices have consequences, and subsidizing bad choices (ie. creating children you cannot feed nor raise & instead foist onto society in exchange for some Free Shit) has led to a significant reduction in quality of life for all parties involved; the parasite loses his humanity, the prey their livelihood.

I am attacking the system which has created this wholesale destruction and the behavior which feeds it. I am advocating preventative medicine, though you may mischaracterize and smear my argument as you please.


Shigure's picture

Kobe Beef, I'm sure you remember this infographic posted on ZH:


100 million dollars = 1 year of work for 3500 average Americans

The banks are the biggest recipients of state benefits.

I think that fractional reserve banking has actually caused the growth of the welfare system.

Kobe Beef's picture

I have never excused the banksters for their predatory behavior either. This thread is about social welfare, so I am addressing that topic, not trying to redirect it toward corporate welfare. When Tyler posts a piece about bankster malfeasance, you can see me give them both barrels too.



Waterfallsparkles's picture

Welfare should not be comfortable.  I never understood why the People on Welfare live as well as they do.

I would like to see the People on Welfare in the old Military Bases.  Everyone would get a room to sleep in.  There would be common Bathrooms and TV, game rooms.  I would also have a chow line.  Three times a day food would be served.  Some would work to pay for their keep, some would watch the children of those who work and some would cook, clean, do laundry.  Everyone would have to contribute.

I would not make it comfortabe.  That way people would want to get off Government assistance.  Not stay on it for life.  I would provide a roof over their head and food but no frills.

Catullus's picture

Yes. We can call them "camps" and we can "concentrate" them to do work.

darteaus's picture

I love that episode.  That and "NAGGERS".

BlueCollaredOne's picture

Don't forget "and its gone"

SokPOTUS's picture

I believe FEMA is currently accepting applications.

ElvisDog's picture

I wouldn't go quite as far as you suggest, but what I would do is get rid of EBT/SNAP cards. Welfare is too damn convenient these days, and SNAP cards can be used to buy fucking Monster energy drinks at 7-11. They should go back to handing out actual staple food - flour, pasta, hamburger, beans, etc. from government-run facilities. This bullshit of being able to sit on your ass until the end of the month and then waddling down to Walmart to buy Doritos on your SNAP card should end.

cartonero's picture

As an actual SNAP recipient I can tell you that I use my benefit to buy the healthiest food I can, which does not include flour, pasta, or hamburger.  Got any other ideas?

Kobe Beef's picture

Yes. If you have children, eat them. Then your neighbors'. Thanks for asking.

cartonero's picture

Or I can migrate to your self righteous world and eat Beef.  You're welcome.


Kobe Beef's picture

Self-righteous? Or simply righteous. I call it principle. Without it, man is merely beast and will heartily feed on one another, as you attest to here.

I was a bit harsh in my response to you, and I apologize-- but the time for coddling dangerous fallacies, marxist parasitism, and economic cannibalism is over. Please, do your best and make do without the fruits of others' flesh and labor.


cartonero's picture

You're the one who's suggesting cannibalism, Reverend.

Kobe Beef's picture

You're practicing it, leech.

Almost Solvent's picture

Fresh fruits, vegtables, gluten-free/dairy-free products.

And find a way off the SNAP by any means necessary.

ElvisDog's picture

Well, congrats because you're someone who is being responsible. But when I go down to the gas station and see "EBT accepted" in the window, that gas station is not offering "the healthiest food" available. It's offering sugar, salt, and hydrogenated vegetable oil. My point is that gas stations should not be able to accept EBT cards and people shouldn't be able to buy whatever they want with them.

CaptainObvious's picture

Yeah, I do.  Use your SNAP to buy heirloom seeds...it's perfectly legal to do this.  You can do a container garden if you don't have actual land to do a real garden.  Then, when your harvest is complete, let the plants bolt, collect the seeds, and use them to plant your next garden.  This way you reduce your burden on society by learning to feed yourself. 

Cathartes Aura's picture

possible ideas might include joining a CSA (community supported agriculture) if available in your area, or starting a community garden plot with others, or a bulk buying group of folks - bonus there is getting a larger food storage going just in case. . .

having the awareness that SNAP cards are pixels funneled from JPM through you to benefit supermarkets, etc. - that should help with the storyline some!

best wishes.

Waterfallsparkles's picture

I would also limit the food you could buy with a snap card.  It would be for dried beans, rice, potatoes, pasta, canned vegtables, carrots, onions, celery, flour, sugar, milk, hamburger, chicken.  Just the basics.

They have the time to cook from scratch like I did in the old days.  They could make their own bread.  You could make a lot of soup with dried beans, celery, onions, etc.  You could make a lot of dishes from rice and chicken or beans.

Why should they be able to buy Lobster and Prime Rib?

Bicycle Repairman's picture

I understand your anger.  Keep in mind the USA fought a civil war over these issues in the 1960s.  The rebels inadvertently received training from the military starting in 1948.  Then in the 1960s they used illicit connections in the military to get armed.  They had many sympathizers within the establishment.  After warfare and great destruction in many major cities, a truce was negotiated whereby the rebels were bought off.  The rebels were also allowed to occupy several major cities.  And today the settlement manifests itself as welfare, government jobs and endless favorable propaganda.

Cloud9.5's picture

Now that was insightful.  I had never thought of the outcome of the civil rights movement in that light.  I am not sure I agree with you but it is a whole different way of looking at the movement and its outcome.  I will have to back up and consider that perspective for a while.


Cthonic's picture

Comfort is relative; and any thing that sustains a human being is 'a way of life'. Perhaps not one you or I would wish to partake in, but one nonetheless.  The whole point of the welfare exercise is to maintain the illusion of stability under the status quo while rendering the recipients psychologically/economically dependent; making the recipients 'uncomfortable' defeats this centralization of power in the hands of the parasitic 'dispensers'.

Cathartes Aura's picture

your proposed scenario would severely impact Section 8 landlords, and their profits via same.

think it through now. . .

oleander garch's picture

As long as Jamie Dimon can be paid by the Federal Reserve to take printed money which he can then lend out via credit cards at an average of 15%, then the welfare state will exist.  Remember, Jamie gets paid to borrow more money from the Fed than the entire amount Pennsylvania spends on welfare for its poor, sick, elderly and children.  What is the line where the taxpayer is better off for ending Fed welfare to the TBTF?  I think it is somewhere around one dollar. 

slickrock's picture

Ineptocracy: A system of government where the least capable to lead are elected by the least capable of producing, and where the members of society least likely to sustain themselves or suceed, are rewarded with goods and services paid for by the confiscated wealth of a diminshing number of producers.

catacl1sm's picture

"Is there something wrong with gravity in the future?"

Cathartes Aura's picture

while in theory I like your descriptions, you've managed to leave out how profitable this same system is for funneling fiats upwards, particularly for those MIC parasites, and CEOs strip mining the corps(e) before leaving everything a steaming pile, moving delicately on to the next.

not so "inept" when viewed from another perspective.

Cloud9.5's picture

The Greeks named it first with kakistocracy.

orangegeek's picture

As the burden to the private sector increases, SP500 companies weaken as their profits dive.  SP500 companies profits are stable/increasing, but the "firing people" strategy only works for so long.  It's more of a tactic.




And once the markets tank, the pensions collapse - and all the entitlementers in the government lose their retirement funds - and not just some, but most, if not all.

zilverreiger's picture

with 29 you need the money, with 70 not obviously

if you like work so much then go work, dont bother others with it