As a Bloomberg News commentary notes, large numbers of people who are not poor are getting food stamps, due to perverse incentives that encourage states to deliberately classify people as eligible in order to draw federal money to their state. People are eligible in some states even if they are not poor at all, but merely received an “informational brochure” for welfare, or a tiny amount of state money that the state deliberately gave them that they didn’t even need, in order to qualify them for food stamps:
As the article notes, food stamp rolls have risen by 29 million people in recent years:
[A] troubling reason for the increase is that state governments have found it easy to get their constituents federal money — that is, money mostly raised from current and future taxpayers in other states — by making more people eligible for food stamps. According to a mid-2010 report from the Government Accountability Office, 35 states have no limit on the amount of assets a food-stamp recipient can possess. More and more states — the count was 36 at the time of the report — are providing “categorical eligibility” for food stamps to anyone who receives welfare services. Merely getting an informational brochure from the Temporary Assistance for Needy Families program counts as receiving a service.
Another way that states and localities can get federal money flowing to them is by providing token amounts of assistance with home heating bills. Even a dollar of energy subsidies can make someone eligible for food stamps, or increase the benefit level for someone already on SNAP. Vermont, for example, sends $5 checks to public-housing residents, even though their subsidized rent already covers heating, to qualify them for food stamps. Liberal activists call this strategy for getting federal money “heat and eat.”
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As Michael Tanner noted this weekend in The New York Post, “the current state of our union can be summed up in just two words: We’re broke.” In his State of the Union address,
The president devoted just 189 words to the deficit and our growing national debt, but the fact is that once again this year we will borrow 32 cents out of every dollar we spend. Overall, our national debt now tops $15.2 trillion (with Congress raising the debt ceiling to $16.4 trillion last week). And that doesn’t count the unfunded liabilities of Social Security and Medicare. Throw those in, and our total indebtedness exceeds $120 trillion.
That means that if one counts only the official national debt, every man, woman and child in America owes $48,700. Include the unfunded liabilities of Social Security and Medicare, and every one of us is in debt to the tune of $189,000. . . measured as a percentage of [our economy,] our budget deficit is roughly a quarter larger than France’s. In fact, among European countries, only Greece and Ireland have larger deficits this year than we do.
The debt figures paint an even grimmer picture. If one includes all the unfunded liabilities of pension and health-care systems, Greece’s total debt equals 875% of its GDP. . .The United States, however, now owes 885% of GDP, more than any other industrialized country.
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“After spending $55 million of a $118.5 million grant from” the U.S. “Department of Energy, Ener1, an Indianapolis-based maker of batteries,” has just “declared bankruptcy.”
The White House had enthusiastically touted the company, which gave rise to an embarrassing gaffe by Vice President Biden:
Vice President Biden visited Ener1 one year ago, January 26, 2011. . .On several occasions, Biden called the company “Enron one” during his visit, invoking a seemingly unintentional but ultimately prescient reference to the collapse of the energy giant Enron. The company was also ranked number 67 in the White House Report: 100 Recovery Projects that are Changing America.
To some, the bankrupt firm is a “candidate in the increasingly competitive race to become the Next Solyndra.” But in reality, several other recipients of green-jobs subsidies under the stimulus package have already gone broke. CBS News had earlier reported that there were 11 Solyndras — that is, financially-troubled recipients of green-jobs subsidies, five of which had already filed for bankruptcy. After the CBS News report, Evergreen Energy, another green-jobs recipient, filed for bankruptcy.
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President Obama has spent billions of dollars in taxpayer money on subsidizing foreign firms through his failed “green energy” programs, so it was ironic and hypocritical when he attacked outsourcing in his State of the Union address. As former congressional economist Chris Edwards notes, Obama made many blatantly false claims about outsourcing and corporate taxation in his speech. Here are just a few:
Claim: “Right now, companies get tax breaks for moving jobs and profits overseas.”
False: There are no such breaks. Instead, we punish U.S. and foreign businesses for investing and creating jobs here.
Claim: “If you’re a business that wants to outsource jobs, you shouldn’t get a tax deduction for doing it.”
False: There is no such tax deduction. . .
Claim: “From now on, every multinational company should have to pay a basic minimum tax.”
False: We’ve already got a corporate “alternative minimum tax,” and it’s an idiotic waste of accounting resources that ought to be repealed.
Claim: “It is time to stop rewarding businesses that ship jobs overseas.”
False: We penalize them for locating jobs here. Besides, the overseas operations of U.S. companies generally complement domestic jobs by boosting U.S. exports.
Claim: “Companies that choose to stay in America get hit with one of the highest tax rates in the world.”
True: Our rate is 40 percent, which compares to the global average rate of just 23 percent.
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Harvard University economist Jeffrey Miron argued that the $800 billion stimulus package wasn’t even designed to stimulate the economy, but rather to benefit special-interest groups, since it flunked even old-fashioned Keynesian policy prescriptions about how to revive the economy. Recently-disclosed memos obtained by the New Yorker provide more evidence for this argument: “over the objection of his economic advisors, President Obama replaced $60 billion of ‘highly stimulative spending’ with a slow-spending but ‘inspiring’ $20 billion for high-speed trains and $40 billion in pork for his Senate Democratic allies. And this is starting from a point at which he knew that his advisors thought that not more than $225 billion of the $826 billion total was high-quality, fast-spending, efficient stimulus.”
This is not the only way that Obama ignored economics in favor of politics when drawing up the stimulus. Originally, economists wanted the stimulus to include the kinds of transportation spending that could boost the economy. But the stimulus package was purged of most investments in roads and bridges, and filled instead with welfare and social spending, out of political correctness, after feminist leaders complained that fixing roads and bridges would put unemployed blue-collar men to work, rather than women. Christina Hoff Sommers points out that “of the 5.7 million jobs Americans lost between December 2007 and May 2009, nearly 80 percent had been held by men,” because men “predominate in manufacturing and construction, the hardest-hit sectors.” But when some administration officials floated the concept of “an ambitious . . . stimulus program to modernize roads, bridges,” and infrastructure as a way of “reinvigorating the hardest-hit sectors of the economy,” “Women’s groups were appalled,” denouncing “The Macho Stimulus Plan.” The Obama administration quickly knuckled under to this pressure, resulting in a “stimulus” package that spent money instead on social services like welfare that are administered mostly by female employees. As an AP story noted “Stimulus Aid Favors Welfare, Not Work, Programs.” (The stimulus package largely repealed welfare reform).
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One of the few virtues of the federal government has been its inefficiency. With functions spread out across different agencies and duplicated powers and responsibilities, it has often proved unable to harm the economy as much as it could owing to power games and competition among agencies. Now the president wants to change all that. He wants a ruthlessly efficient government to intrude in all aspects of our lives without internal checks and balances. An efficient government might have been a good thing 30 years ago, when the government was spending much less per person. Now that it’s spending over $30,000 per household, the prospect is terrifying.
Take, for example, the proposal to transfer the National Oceanic and Atmospheric Administration from the Department of Commerce to the Interior Department. It’s clear that President Obama wants to create a European-style Department of the Environment. The merger gives the environmental lobby a one-stop shop for everything outside the EPA. It also creates a powerful behemoth that will be all-too-ready to trample property rights in the name of the environment. The Interior secretary and the EPA administrator will form a powerful alliance in the president’s cabinet, and the chances of protecting the environment through responsible stewardship and free market methods will be significantly diminished as this new bureaucracy expands its power.
Meanwhile, the proposed merger of the subsidies arm of the Commerce Department with such entities as the U.S. Trade Representative, the Small Business Administration, the Export-Import Bank, and other market-complicating agencies creates what one commentator called “a corporate welfare Voltron.” The whole purpose of this department will be to interfere with the free enterprise system to the benefit of the political flavors of the month. Rent-seekers across the country will delight that the process of diverting taxpayer money into their pockets will become simpler and easier. That may be efficient, but is is not responsible government.
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The State of Maryland spends millions of Medicaid dollars on dead people, “about half of it from the federal government,” notes The Washington Examiner. Maryland officials ignored information in a federal Social Security database, and even information in their own computers, in approving this spending. Of the millions in improper payments, “$426,403 in postmortem Medicaid benefits had been paid to just 10 deceased individuals, nine of whom were enrolled in managed care organizations. In one case, Medicaid payments to a nursing home began eleven months after the individual had died.”
As we noted yesterday, dead people also get food stamps, and fraud in food stamp programs costs taxpayers billions of dollars. “While many recipients had invalid Social Security numbers and were double-dipping between federal and state programs, many of the recipients also happened to be dead. This has become a pervasive problem in the realm of government benefits. (The Social Security Administration also sends millions of dollars to recipients who are dead.)” As Jim Bovard noted in The Wall Street Journal, state attempts to prevent fraud in the food stamp program are being thwarted by the Obama administration: “The Obama administration is responding by cracking down on state governments’ antifraud measures.”
Obama’s stimulus package largely repealed welfare reform, encouraging states to make welfare payments to undeserving people. Much stimulus money has been wasted. It has gone to dead people and prisoners, wasteful welfare spending, abandoned bridges to nowhere, and unnecessary government buildings. The stimulus package subsidized foreign green jobs and wiped out jobs in our export sector. Small wonder that Harvard economist Robert Barro called it “the worst bill that has been put forward since the 1930s.”
Freshman Senator Joe Manchin (D-W.V.) said “there’s no excuse” for Senate Democrats’ failure to pass a budget in nearly three years (959 days). On MSNBC, Manchin, who used to be the governor of West Virginia, explained that he “would have been impeached” for refusing to put together a budget for his state. Senate Democrats don’t want to pass a budget containing all the spending they’ve authorized through individual spending bills, since doing so would further expose their complicity in the Obama administration’s record deficit spending. During the Obama administration, the federal government has run up the largest budget deficits in history; the Obama administration ran up more red ink in just one month (February 2010) than the Bush administration ran up in an entire year (all of 2007).
In the 2008 campaign, Obama promised a “net spending cut,” but as soon as he was elected, he proposed massive spending increases. In 2011 budget proposals, Obama pretended to cut spending while actually increasing spending by tens of billions more than previously planned (his proposals would have further increased both discretionary and entitlement spending by many billions of dollars). Even journalists who voted for him called these proposals dishonest and potentially “disastrous” had they been adopted. Obama made a similarly deceptive sales pitch for his $800 billion stimulus package, citing Congressional Budget Office claims that it would save jobs in the short run, while ignoring the CBO’s own finding that the stimulus will actually shrink the economy over the long run, by exploding the national debt and crowding out private investment. The stimulus ended up destroying jobs even in the short run by wiping out jobs in the export sector, and subsidizing foreign green jobs at the expense of American jobs.
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