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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Tue, 11/27/2012 - 14:34 | 3014787 catacl1sm
catacl1sm's picture

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

Tue, 11/27/2012 - 16:36 | 3015218 Cathartes Aura
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.

Tue, 11/27/2012 - 21:18 | 3016105 Cloud9.5
Cloud9.5's picture

The Greeks named it first with kakistocracy.

Tue, 11/27/2012 - 13:35 | 3014602 orangegeek
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.

Tue, 11/27/2012 - 13:37 | 3014606 zilverreiger
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

Tue, 11/27/2012 - 13:36 | 3014607 sangell
sangell's picture

If you add to welfare benefits the costs of law enforcement, the criminal justice system and public schools. all of which the underclass use disproportionately you can see that that fat female welfare animal needs to be exterminated not have her benefits reduced.

Tue, 11/27/2012 - 16:51 | 3015258 Cathartes Aura
Cathartes Aura's picture

the "fat female welfare animal" isn't really using the "law enforcement & criminal justice systems" as much as the sires now, is she. . .

jobs for the boys though - won't someone think of the lawyers?? and the LEOs??? and private for-profit prisons??


Tue, 11/27/2012 - 16:58 | 3015277 tip e. canoe
tip e. canoe's picture

it's all going according to plan

Tue, 11/27/2012 - 17:05 | 3015291 Cathartes Aura
Cathartes Aura's picture



Tue, 11/27/2012 - 13:37 | 3014612 Waterfallsparkles
Waterfallsparkles's picture

Welfare is reverse Slavery.

Tue, 11/27/2012 - 13:40 | 3014621 Mr. Lucky
Mr. Lucky's picture

Mission Accomplished

Tue, 11/27/2012 - 17:35 | 3015417 catacl1sm
catacl1sm's picture

You really need a big banner and aircraft carrier to pull that off these days.

Tue, 11/27/2012 - 13:41 | 3014622 Nostradamus
Nostradamus's picture

If government contractors aren't included in the "government employee" statistic then the ratio of private employees to government employees and welfare recipients would drop below 1 to 1.  There are hundreds of thousands of people in this country who work for a company whose profit is made almost 100% from government contracting.  Their pay is possible as a result of tax dollars being given to the companies that employ them.  So, they too are a strain on the whole system.

Tue, 11/27/2012 - 13:41 | 3014624 Catullus
Catullus's picture

Maybe if I start working for myself by July instead of May, then I'll be paying my "fair share".

Tue, 11/27/2012 - 13:43 | 3014628 Shizzmoney
Shizzmoney's picture

Work is punished from the taxation of labor, not "handouts".

If communities would actually not be divided, and stick together for fucking once, maybe we can go back to farming with local gardens and provide for those families in need, instead of the government (who is drained to the heels by JPM and Monsanto).

It's ridiculious that I'm taxed more than Jaime Dimon, despite that asshole not doing a day of work in his fucking life.

Tue, 11/27/2012 - 13:46 | 3014638 LawsofPhysics
LawsofPhysics's picture

This is why the fiat currencies will collapse.  Humanity's idea of value/compensation is all screwed up, fuck the mother fucking paper-pushers.

Tue, 11/27/2012 - 13:50 | 3014648 Nostradamus
Nostradamus's picture

It takes a village.

Tue, 11/27/2012 - 14:32 | 3014746 Kobe Beef
Kobe Beef's picture

Personally, I'm sick of this "village" meme. Just rote marxist collectivism. It's the 21st century, and I for one do not want to live in a fucking village. What am I? Some Medieval serf? Some Stone Age Tribal?

It's the 21st century, dammit. We're supposed to believe that the last thousand years of innovation, liberty, and progress in Western Civilization leads directly back to the peasant collective? Fuck that. in its neck.

What purveyors of this stupid cultural marxist meme don't realize, is that villages are tribal arrangements. They are inhabited by clans, extended families, and/or members of a closely related gene pool. Thus, if we devolve to village life, the prized "diversity" will likewise be exterminated.

Facts of Life, bitchez. You want to engineer society, you'd better read some basic biology first.

Tue, 11/27/2012 - 14:52 | 3014857 alien-IQ
alien-IQ's picture

I guess you want to sterilize the villages also?

Tue, 11/27/2012 - 15:26 | 3015008 Kobe Beef
Kobe Beef's picture

No, I would like civilization to continue. I do not wish to see the actual progress achieved by Western Civilization  surrendered to some primitive, atavistic collective of yesteryear.

I have nothing against the villages of the world, only to say that we in the West surpassed them centuries ago. They are welcome to their way of life, but not to forcibly extract my production for their sustenance, here nor elsewhere.

Tue, 11/27/2012 - 14:07 | 3014688 ElvisDog
ElvisDog's picture

Are you kidding? Do you think it's easy being an Oligarch? Strip-mining the middle class is a lot of work.

Tue, 11/27/2012 - 13:45 | 3014630 Burr's 2nd Shot
Burr's 2nd Shot's picture

I am told the first civil war was about slavery too.

Tue, 11/27/2012 - 13:45 | 3014635 riphowardkatz
riphowardkatz's picture

incentivized retardation. 

Tue, 11/27/2012 - 13:49 | 3014646 j-dub
j-dub's picture

"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."


But I thought women were soooooooo independent.  You go girl and all that.  You don't need a man!!!

No, all she needs is the state.  Feminism-another huge lie!!

The bigger the lie.........

Tue, 11/27/2012 - 14:28 | 3014661 Colonial Intent
Colonial Intent's picture

"Feminism-another huge lie!!"

Or maybe you is just a Fuck ugly eunuch J-Dub             (real name - Travis Hawkins Jr)

Tue, 11/27/2012 - 14:33 | 3014782 darteaus
darteaus's picture

Let's not forget Obama's Julia:



Tue, 11/27/2012 - 16:59 | 3015278 Cathartes Aura
Cathartes Aura's picture

I shouldn't, but I will,

Feminism-another huge lie!!

which is it lads - Feminazi's gots all yer jawbs!!!  or Feminazi's gets all yer Welfares!!!!

oh wait, the false stats in the article - picked apart further upthread - sez womenz get yer jobs AND yer Welfare!!

win win bitchez.

Tue, 11/27/2012 - 13:52 | 3014650 Winston Churchill
Winston Churchill's picture

Mother nature will have the last laugh at homo sapiens thwarting

natural selection.Sooner, rather than later.

Back to a 600 million world population will be the result.

Tue, 11/27/2012 - 14:40 | 3014814 resurger
resurger's picture

she bats last ......

Tue, 11/27/2012 - 14:02 | 3014653 Colonial Intent
Colonial Intent's picture

Arbeit Macht Frei?


No more intrade if you live in the USA.


Tue, 11/27/2012 - 16:34 | 3015212 Cthonic
Cthonic's picture

JFC, first poker, now intrade.  Locked down by the FinCen.

Tue, 11/27/2012 - 16:55 | 3015229 Colonial Intent
Colonial Intent's picture






Tue, 11/27/2012 - 13:53 | 3014655 SokPOTUS
SokPOTUS's picture

I'd be shocked if Mr. Alexander is still employed by this time tomorrow.

Tue, 11/27/2012 - 13:58 | 3014668 azengrcat
azengrcat's picture

Lets not forget the student loan debt people have burdened themselves with to get to the right side of the graph.  Shoulda been a Burger Flipper!

Tue, 11/27/2012 - 14:03 | 3014678 jojomama
jojomama's picture

it's been said several times here, but i'll say it again.


reduce the minimum wage enough or keep it flat long for a long enough time (as corporations and their lobbying have done), and yes, "welfare" wages will be higher.


that's simple mathematics.

Tue, 11/27/2012 - 14:31 | 3014776 darteaus
darteaus's picture

Even simpler mathematics:  Give people money for doing nothing, and you will have more people doing nothing next year.

Tue, 11/27/2012 - 14:42 | 3014816 spooz
spooz's picture

Except people don't get paid for doing nothing since the 1996 Personal Responsibility and Work Opportunity Act.

look it up.

Tue, 11/27/2012 - 16:06 | 3014953 darteaus
darteaus's picture

And the tax code also applies equally to everyone too!


Looked it up for you!  Changed in 2012 by the Obama administration:

"In July 2012, the Department of Health and Human Services released a memo notifying states that they are able to apply for a waiver for the work requirements of the TANF program, but only if states were also able to find credible ways to increase employment by 20%.[11] The waiver would allow states to provide assistance without having to enforce the work component of the program"

Tue, 11/27/2012 - 23:32 | 3016395 spooz
spooz's picture

From Factcheck.org:

"[Former Republican staff director of the Subcommittee on Human Resources for the House Ways and Means Committee Rob] Haskins also said that the new waiver policy does not “gut welfare reform.” He cites two reasons: The federal government will continue to hold states accountable for moving people off welfare and into jobs, and the states have a tremendous financial incentive to use the new waiver authority to improve employment outcomes.

“The idea that the states will use this to bring people back on the welfare rolls … doesn’t make sense to me,” Haskins said. “The states are all about work. All they talk about is work. They agree with welfare reform and they want to figure out how to get everybody they can into the labor force — because it is to their advantage.”

Funny thing the Rs are all about states rights, unless a D comes up with the idea...


Tue, 11/27/2012 - 14:05 | 3014682 Fix It Again Timmy
Fix It Again Timmy's picture

Since money grows on trees, what's the problem?

Tue, 11/27/2012 - 14:27 | 3014761 uno
uno's picture

electronic trees, real trees take too much energy and time.

Tue, 11/27/2012 - 14:13 | 3014703 dolph9
dolph9's picture

Remember who the biggest suckers are:  the middle and upper middle classes who work their asses off to escape to some enclave or suburb, to put their children in "good" public schools or private schools, to pay off the cars and mortgages and taxes.  They are kept on a treadmill to keep up with the Joneses and put a comfortable distance between themselves and the ghettos, barrios, and trailer parks.

And yet...they are so far away from the oligarchy that it's a joke.  And the oligarchs know it, and they know they can count on these classes for their support...because the alternative is a spiral downward and ultimately to pound-me-in-the-ass federal prison.

Also remember...if you don't know who the sucker is, it's you.

Tue, 11/27/2012 - 14:12 | 3014707 GreatUncle
GreatUncle's picture

When I look at the nice picture of matchstick people one thing strikes me. So close to the 50%, 1 for 1 etc.

Then you look at the ones on welfare assistance or government employees and realise this "not-needed people". Well it is true, not needed and if you reveal the true level of inactive people (= not working) potentially it is 50%.

Now if you receive some form of financial assistance and work is it not to renumerate the employers to create a job that is probably not needed. 

Sure explains why the debt is escalating, people employed doing non-jobs to keep the true number of unemployed far lower than what it would otherwise be. 

Tue, 11/27/2012 - 14:39 | 3014807 spooz
spooz's picture

Would those "non-jobs" include all the McJobs that don't pay a living wage and require subsidies to meet basic needs?

Tue, 11/27/2012 - 17:39 | 3015438 catacl1sm
catacl1sm's picture

McJobs shouldn't be considered careers, they exist as stepping stones or high schooler work for extra money. If people are unhappy with the wage offered then simply don't take the job! Dumbasses.

Tue, 11/27/2012 - 18:52 | 3015686 nasa
nasa's picture

The job that was the path to the next level is now in China, all that is left is the McJob.   Welcome to the New World Order.

Tue, 11/27/2012 - 14:17 | 3014723 SmittyinLA
SmittyinLA's picture

Welfare is a mass immigration subsidy tool, you have to pay it if you want mass immigration, mass immigration into an already occupied territory cannot occur without subsidy, the ocupiers (Americans) have too great a home field advantage.  

Mass immigration is predicated on the assumption that foreigners can move in and grow and displace already established Americans without subsidy, which of course is rediculous, scabs have higher expenses-mostly housing, they have to compete and undercut the wages of children living in their parents homes for free. 

Its impossible to undercut the wages of Americans who have lower "buy in" living expenses hence the need for massive subsidies for immigrants and aliens, and of course you can't give away free shit to foreigners without giving away free shit to Americans.  

One day the welfare will end, and all the Americans that took the money to ignore foreign invasion will be stuck competing with millions of foreign citizens and no more subsidies, that day is soon.

Tue, 11/27/2012 - 14:37 | 3014795 spooz
spooz's picture

So wrong.  So misinformed.  So infused with propaganda.  So lacking in critical thinking skills.

Do you have some citations for this garbage other than blowhard talk radio hosts?


Tue, 11/27/2012 - 15:00 | 3014888 Bicycle Repairman
Bicycle Repairman's picture

It's an interesting viewpoint.  Besides ad hominem attacks, what is your argument?

Tue, 11/27/2012 - 15:06 | 3014918 spooz
spooz's picture

Who needs an argument when you can spit out propaganda like "Welfare is a mass immigration subsidy tool" with no support whatsoever?  Any "welfare" received by immigrants is a drop in the bucket.  And immigration is going in the other direction since we don't have jobs.


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