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The Great Society’s Great Cost

The Congressional Budget Office did not exactly say Obamacare would cost the nation 2.5 million jobs.

But what it did say is vindication of what conservatives have preached since Barry Goldwater stood in the pulpit 50 years ago:

The more liberal the welfare state, the greater the disincentive to work and the more ruinous the impact upon a nation’s work ethic.

The CBO has just given us a statistical measure of that truth.

The Obamacare subsidies, it said, will cause some to quit work, others to cut back on the hours they work, and others to hold off going to work, so as not to lose the benefits.

The cumulative impact of all these decisions will be equal to the loss of 2.5 million jobs by 2024. A devastating blow to an economy where the labor force participation is at a 30-year low.

The CBO has put a number on what everyone knows to be true: If people don’t have to work to provide the needs of their daily lives, some will drop out and become permanent charges on the public purse, deadbeats.

The father of modern liberalism, FDR, never disputed this. As he warned in 1935, welfare is “a narcotic, a subtle destroyer of the human spirit.”

This used to be called common sense. Growing up, we all knew or read that those who inherited great wealth often ended up never holding a “real job” and spent their days in a life of self-indulgence.

However, a related and larger question is raised by the CBO: If Obamacare alone will cost the equivalent of 2.5 million lost jobs to the U.S. economy, what is the impact of our entire welfare state on the vitality and dynamism of the U.S. labor force?

As Robert Rector of Heritage Foundation wrote in January, if we judge Lyndon Johnson’s Great Society only by the dollars spent to improve the lives of the poor and near-poor, an astronomical $20 trillion, it was a success. Rector describes its dimensions:

The federal government runs more than 80-means tested programs that provide cash, food, housing, medical care and targeted social services to poor and low-income Americans.

Government spent $916 billion on these programs in 2012 alone, and roughly 100 million Americans received aid from at least one of them, at an average cost of $9,000 per recipient. (That figure doesn’t include Security or Medicare.)

Federal and state welfare spending, adjusted for inflation, is 16 times greater than it was in 1964.

Yet, if we judge the Great Society by its goal, providing the poor with their basic family needs so they can go out into the marketplace and find jobs and join their fellow Americans, it has been, writes Rector, “a catastrophe.”

Scores of millions of Americans are today less able to achieve self-sufficiency through work than were their grandparents.

And by providing for all the needs that the father used to provide for his family, the Great Society has helped make fathers superfluous. We have created a system where a teenage girl who becomes pregnant can have all her basic needs met by government. This is a primary cause of the rise in illegitimacy in America from 6 percent of all births in 1963 to 41 percent today, and to 53 percent among Hispanics and 73 percent among African-Americans. And that record illegitimacy rate is directly tied to the drug use rate, the dropout rate, the crime rate, and the incarceration rate.

If the goal of the Great Society was to turn America’s tax consumers into taxpayers, it has been a total failure. We have now a vast underclass of scores of millions who are dependent upon government for most or all of their basic needs, a class among whom many, if not most, have lost the ability to survive without government money, food, and shelter.

This is something new in America, something we did not know with the Irish boat people of the 1840s, the Okies in Dust Bowl days or during the Great Depression of the 1930s.

Monday’s New York Times reveals a relevant and startling fact: only 8 percent of the cab and rental car drivers in New York City are native-born Americans. Three times as many yellow cabdrivers in New York were born in Bangladesh than in the USA.

What is happening in America is that the vast cohort of working men and women, immigrants, illegal and legal, who have come in recent decades, 30 to 40 million, have displaced, have dispossessed, the native-born.

But we may be coming to the end of the line. From Detroit to Greece to Puerto Rico, government’s ability to expand the benefits of the welfare class by taxing the working and middle class is reaching its limit. Taxpayers are rebelling, budgets are falling dangerously out of balance, and the welfare state is beginning to buckle under the load.

Perhaps T. S. Eliot was right: “This is how the world ends/ Not with a bang but a whimper.”

Patrick J. Buchanan is the author of “Suicide of a Superpower: Will America Survive to 2025? [1]” Copyright 2014 Creators.com [2].

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#1 Comment By Lord Karth On February 11, 2014 @ 2:53 am

This is before we consider the effects of so-called “public-employee” pensions on the system.

Take those into account, and it’s a wonder that the American system has lasted as long as it has.

Your servant,

Lord Karth

#2 Comment By Fran Macadam On February 11, 2014 @ 3:06 am

Well I guess those immigrants doing the jobs that Americans are too lazy to take are morally superior in terms of being judged by the Protestant Work Ethic, to the archetypal Great American Bum. In that case, they aren’t stealing anything, just getting the fruit that self-indulgent American deadbeats left to rot unpicked on the trees. As P.J. O’Rourke once put it, we should be signing them up as citizens of the kind the country needs, on the spot. And deporting the bums to, say, northern Alaska.

I rather guess Pat, from his own position of succor, is tone deaf to the travails of those desperate who’d work if only they could actually find work. Pat’s critique is a kind of drive-by shooting of innocent unemployed bystanders milling on the sidewalk with signs “will work for pay” glimpsed from inside his own comfortable Mercedes as it zooms past with him only catching a cursory glance of who they are or what their situation is.

I can’t think that hectoring people, like some Archie Bunker thinking he’s railing righteously at meatheads to “Get a Job,” is no different than Marie Antoinette handily solving the problem of starvation by telling the poor to “eat cake.”

There aren’t enough paying jobs now to go around, thanks to Pat’s own class’ societally irresponsible greed in outsourcing and offshoring. In point of fact, the economic disincentives to create employment in this country, given their personal greed and lack of responsibility to their fellow Americans, increase under Obamacare because employers can avoid the mandate by moving even more labor overseas, where there is either a single-payer health system or better yet, none at all.

They’ve come a long way from the business community Ronald Reagan described when he first ran for California governor: “The businessmen of Los Angeles realize it is their responsibility to provide good jobs for their communities, so that people can provide for their families, afford health care, education and retirement.”

As another great American said, “Trow de bums out.” He wasn’t referring to the beleaguered working or middle classes being priced out of the ability to earn the American Dream.

#3 Comment By libertarian jerry On February 11, 2014 @ 3:35 am

The whole idea that the proper role and function of government is to solve social/economic problems by a bureaucratic redistribution of the fruits of people’s labor must be repudiated before it turns America into a complete police state. The whole idea of income reporting,verification and redistribution can only lead to the corrupt destruction of individual liberty,self responsibility,self reliance and our Constitutional Rights. In the end,the results of the “New Deal” and “Great Society” will not be the “uplifting” of the poor but the destruction of the middle and affluent productive Economic Classes. In essence,America will be turned into a nation of productive tax serfs lorded over by a growing Political Class consisting of a parasitic mobacracy who have voted into power demagogues who lust for power. America,unfortunately,will become and to a certain extent has become the bankrupt Roman Empire of modern times.

#4 Comment By Kodiac1221 On February 11, 2014 @ 6:27 am

Try telling this to the Critical Theory folks who run the universities… Their answer will more, not less government welfare. Until conservatives start breaking into the academy, which largely shapes opinion, they will lose.

#5 Comment By Steve Ruble On February 11, 2014 @ 6:56 am

I don’t see why a reduction in labor hours supplied would be a problem right now. If someone leaves their job because they don’t need it any more, that job becomes available to someone who needs a job but doesn’t have one. A lot of Americans need a job right now. Isn’t a 2.5 million FTE-equivalent reduction in labor supply the same as a 2.5 million FTE-equivalent increase in labor demand?

#6 Comment By Nathan On February 11, 2014 @ 7:08 am

Here’s a question for all of all you: Starting with Eisenhower any of you name anything that ANY I mean ANY GOP president has done to roll back either the New Deal or Great Society. Name a GOP president and one just one ND GS program any of them eliminated or substantially curtailed during their time in office. Bush of course added substantially to GS with Plan D which Ryan voted for and Gingrich lobbied for.

But even Reagan, name one ND/GS program he rolled back/eliminated. Yes supposedly he may have cut the rate of growth for one or two or them but cutting rates of growth is not the same as CUTTING them in absolute terms. Cutting a program is going from 100 dollars to 50 dollars not saying that we start with 100 dollars, we planned to increase it to 140 but we managed to only increase it to 120. We’re still increasing it in absolute terms.

Even when Reagan was in office the biggest threat facing the country were those entitlements which as we see today threaten to overwhelm us and he may have been the last GOP president that could have sold the baby boomers on changes that they might have bought at the time and he did little or nothing.

GOP presidents and for the most part congresses have failed to address the problem and for the most part give us little reason to vote for them.

#7 Comment By mrscracker On February 11, 2014 @ 9:21 am

A welfare safety net is a good thing, as a lifestyle-not so much.

#8 Comment By cka2nd On February 11, 2014 @ 10:54 am

Mr. Buchanan proves again that he cannot hold two thoughts in his mind at the same time. In the past, he has bemoaned the effects of off-shoring manufacturing jobs and mass immigration on the paychecks of American citizens. These, along with the breaking of the labor movement in the private sector, have also had the effect of:

— Forcing more people, women especially, into the workforce.

— Forcing poorer senior citizens or those who’ve had their pensions wiped out to stay in the workforce.

— Forcing some to work multiple jobs.

— Forcing some to work massive amounts of overtime, or schedules that play hell with everything else in their lives, from sleep cycles to family time.

Buchanan, conservatives and libertarians can’t have it both ways, not if they want to avoid a social explosion. They can’t support public policies and business practices that wipe out jobs, expand the workforce, drive wages down, eliminate secure retirements and increase social insecurity for most of us while shoveling more and more wealth and power into the arms of the super-rich on the one hand AND decry public policies that amerliorate the worst of these effects on the other.

The greatest social program in the world, the one that could really reduce the welfare state without throwing millions to the wolves, would be a massive increase in wages for the masses. If you can’t get behind that, than why the hell should we listen to you as you push the same policies that have hurt the 90 or 95% of us since at least the Carter Administration?

#9 Comment By Max Planck On February 11, 2014 @ 11:24 am

It is typical of men like Buchanan to assume the worst of his fellow Americans, while claiming to love his country. The country is great, he reasons. It’s the people who ruin it.

For those of us who don’t often follow CBO projections, please note they are subject to wide revisions as data comes in, and they are no more capable of predicting how people will act as anyone else is.

#10 Comment By Adam On February 11, 2014 @ 11:45 am

Does unfettered capitalism lead to the welfare state? Does technology and globalization redefine work for our country and disincentivize it through a lower distribution of production gains to labor? Is work the highest and best goal of an individual through every stage of his or her life? Is having ones healthcare options tied to a job a negative incentive to keep a job where otherwise one might have the ability to do something more useful for yourself and your community? Is it better to collectively have a pension program to ensure we don’t have our elderly fall into poverty after a full career of work or is it everyone for themselves? Does being a citizen of this country allow you to participate in the receipt of the benefits of our economy or was it built for capital only? How would Barry Goldwater’s positions have answered these questions?

#11 Comment By WorkingClass On February 11, 2014 @ 12:43 pm

Free traders (Democrats and Republicans) export our jobs while importing cheap, exploitable labor. Our livelihoods stolen, we are then stigmatized as “takers” when we sign up for food stamps. This combination of insult and injury will not forever go unanswered.

#12 Comment By Hooly On February 11, 2014 @ 1:24 pm

Pat,

I agree with you there are spongers, but where you see it (no surprise) from a racial and class perspective, I see it from a geographic one. It’s common knowledge that States like California, New York, Texas, etc give more in taxes than they take out. Whilst States such as Alabama, Mississippi, Arkansas, etc. take out more than they give in. In other other words, if the American Union can be compared to the European Union, most Deep South States would be the PIGS of America. Those hordes of Bangladeshi cab drivers pay taxes to support the sick out of work former coal miners of West Virginia. Am I wrong ??

#13 Comment By Reinhold On February 11, 2014 @ 3:47 pm

Little bit of history:
The suburbs which our ‘grandfathers’ paid for were entirely subsidized, in construction and distribution, by the government. The booming economy of the 20th c.––the one that provided working people with ‘independent means’––was thoroughly the result of massive public investment and welfare capitalism by law. So while the government benefits may sometimes cause disincentive to work, they also established the modern consumer economy, which they are now having trouble continuing in the wake of recession in the labor market.

#14 Comment By Ben, Okla. City On February 11, 2014 @ 5:22 pm

If you are going to live in cities and have a modern economy, there has to be a welfare state. It’s a package deal. If you want to go back to agrarian culture, knock yourself out.

#15 Comment By philadelphialawyer On February 11, 2014 @ 8:21 pm

If work is so important, then why are capital gains given preferential tax treatment? Shouldn’t rentiers, who are living off their investments, be encouraged to work instead? Maybe the stepped up basis rule needs to be reconsidered too.

Indeed, how about a nice, big fat inheritance tax? Why should folks who have the accident of wealthy parents or other forbearers not be working too?

Somehow, “dependency” is not a bad thing for folks with trust funds and inherited wealth. Only for poor folks. Any crumb that falls off the table undermines their dignity and so on, and is harmful to them in the long run. But an endless feast for the descendants of rich folks, obtained without so much as lifting a diamond ring clad finger, has no such deleterious effects.

#16 Comment By TomB On February 12, 2014 @ 8:13 am

C’mon folks, we’re so used to seeing everything polemicized immediately we all now do it ourselves about every issue raised just unconsciously.

Here’s my point:

For those on the “Right” of this issue, do you really believe that *any* modern country can go back to being substantially a pre-welfare-state, much less the U.S.? Nuts, the U.S. is probably behind every other country, and as Nathan says above (and George Will says), Americans grumble about big government but by they sure like that part of it that sends them their checks. Not one Big Government/New or Great Society program killed. Not one. People just *want* a big welfare state now, period.

And for those on the “Left,” do you really believe there isn’t a significant problem of—as mrscracker so wonderfully said—welfare having become a lifestyle for many?

Let’s face it, people want a healthy safety net, and at the same time there hasn’t been enough thought given as to the deleterious effects of having same and of “free-ridership.”

Nor will we ever improve that situation if, with every proposed new welfare program (Obamacare to some degree) or with every change the Right just takes up the banner of being against pretending nobody approves of same and the Left take up the banner of pretending it has no downsides and isn’t going to be abused by some.

It’s a big, serious problem; surely we can do better than to just polemicize and politicize it to the point where it never gets addressed, right?

#17 Comment By cka2nd On February 13, 2014 @ 1:06 pm

TomB says: “And for those on the ‘Left,’ do you really believe there isn’t a significant problem of—as mrscracker so wonderfully said—welfare having become a lifestyle for many?”

If you substituted “some” for “many,” I’d probably agree with you. I’ve often said on this site that there is a Lumpen Proletariat of petty criminals, “spongers” and those who rarely work, but the latter category, in particular, has gotten bigger as the ruling class has off-shored, automated and out-sourced jobs, and sped up the work for almost everyone left. The reason I don’t say “many” is because studies have shown that many on various forms of public assistance also work, and so end up spending time on a carousel of alternating work and welfare because either the jobs or their skills are lacking. Bring back the manufacturing jobs and pay people decently for all work – retail, agriculture and domestic work, included – and shrink unemployment to a reasonable level of say, 2%, and then we can tackle the Lumpen problem. Right now, though, it’s a sideshow compared to the labor market as a whole and the far vaster problem of corporate welfare and welfare for the rich.

TomB says: “Let’s face it, people want a healthy safety net, and at the same time there hasn’t been enough thought given as to the deleterious effects of having same and of ‘free-ridership.'”

Free-ridershikp is a legitimate issue, but it’s tough to take it seriously when GOP politicians go on and on about the vast sums lost to Medicaid and Medicare fraud when they ignore the fact that those vast sums are almost always a tiny PROPORTION of all the money spent on M and M. For that matter, I’d love to see conservatives pick up the baton from the TAC Center for Public Transportation and do some serious analysis and muckraking of the arguments and reports put out by their erstwhile allies on the right backing, for instance, further cuts in capital gains and estate taxes.

#18 Comment By Morgenthau On February 15, 2014 @ 5:26 pm

Liberal policies have the most ironic names:

“New Deal” was a reincarnation of the Wilson administration’s War Industries Board.

“Great Society” sapped the virtue out of American civil society.

“Affordable Care Act” raised the average healthcare premium by ~40%.

Not to just pick on the US left; let’s not forget the “PATRIOT” Act and “Trickle down” economics!