Eliminating Entitlements as Expenses (and saving the U.S. economy)

Whew!  That's a lot of E's in one title!  Try to say that ten times fast.  OK, I know you didn't do it, that's fine.  But by the time you finish this blog, it might just be your battle cry.

So what is an entitlement?  In the simplest terms, it's a right.  The most basic entitlement we have as a human is the right to live.  Most societies and cultures (theoretically) attempt to protect individuals from physical and fatal harm.  Basic, right?  In the U.S. constitution, we have other basic rights: free speech, freedom of religion, etc.  The founding fathers laid out a plan for our basic rights and entitlements many years ago in an attempt to establish the framework for a new democracy. 

My, how things have changed in almost 240 years! 

Over the years, as the government grew, entitlement took on a whole new meaning.  Today, Dr. Paul Johnson of Auburn University defines an entitlement program as, "The kind of government program that provides individuals with personal financial benefits (or sometimes special government-provided goods or services) to which an indefinite (but usually rather large) number of potential beneficiaries have a legal right (enforceable in court, if necessary) whenever they meet eligibility conditions that are specified by the standing law that authorizes the program."

Photo courtesy of Mr. Conservative

So now the government says certain individuals are entitled to money, goods, or services, based on a certain condition.  Entitlements were even a problem in 1946, when this piece was written.

"But Zoe," you might argue, "You go to your job, do your work, and are entitled to a paycheck for a certain amount."

Correct.  However, the key word is there, I go to work and do my job. 

I work in the private sector, so my job is financed by personal capital and not government funds.  This isn't to say I have a problem with paying state or government workers at all.  The military, police, firemen, teachers, etc., all have the right to a paycheck as much as I do.

The portion of entitlement spending I'm taking issue with is primarily our welfare spending.  Check out this graph (courtesy of the Conservative Samizdat) to see how our (the taxpayer's) money is being spent:

What you see in the graph on the left is the contribution of Income Tax to the United State's annual revenue.  On the left, you see the amount being taken up by entitlement spending.

For those of you who never took accounting, the basic income statement equation is:

Revenue-Expense=Net Income (loss)

For example, if a store makes $300,000 in sales, and spends $250,000 on salaries, rent, insurance, raw merchandise, and other expenses, it makes $50,000 per year.  (Because $300,000-$250,000=$50,000 in case you wanted me to solve that complex story problem for you).

However, if the store made only $250,000 in sales, and spent $300,000 on salaries, rent, insurance, raw merchandise, and other expenses, it lost $50,000 per year.  ($250,000-$300,000=(50,000)).

When a store realizes they are losing money, they can take one of two actions.  They can A) Increase prices or B) Decrease expenses.

The first option is difficult.  What if their target demographic can't pay higher prices?  What if the higher prices don't make up the $50,000 difference?

The second option is the route businesses usually take.  Maybe they cut employee hours.  Maybe they discontinue unprofitable lines of merchandise.  Maybe they consolidate locations. Either way, they decrease expenses to make a profit.

The U.S. doesn't need to increase profit.  Why?  The $2.2 trillion is more than enough to cover the basic needs of the people.  Can the defense budget be cut?  Probably?  Eliminate wasteful programs?  You betcha!  (See my other blog for many of these).  But today, let's just examine entitlement spending.

1. Social Security  ($707 billion)

Am I going to take away some 95 year old woman's monthly check for living?  No way.  My parents, who have worked for 30+ years are due to start collecting social security in a few years.  Do they deserve it?  Absolutely.  They paid into it, so they deserve it.  However, it needs to be phased out, and individuals should be left to invest their retirement as they see fit.  Seriously, I feel more comfortable tossing coins into my jar I take to the Coinstar then I do trusting those coins to bureaucrats.  Social security needs to be phased out immediately and turned over to the private sector.

2. Medicare and Medicaid.  ($876 billion annually) This one is a kicker.  According to the Centers for Medicare and Medicaid services, Medicare and Medicaid comprised over $8 billion of the National Health Expenditure (NHE):

• Medicare spending grew 7.9% to $502.3 billion in 2009, or 20 percent of total NHE.
• Medicaid spending grew 9.0% to $373.9 billion in 2009, or 15 percent of total NHE 

 That's right, folks, $8 billion of YOUR tax dollars going to free health care for others (many of whom are illegal immigrants), while the hard-working non-entitled folks have to pay sometimes upwards of $200 a month for health insurance, high co-pays, and have to reach incredibly high deductibles before insurance starts paying. 

(Did I mention that when a Medicare or Medicaid patient sees a physician, they pay $3.00?  That's right, search around your couch, under the cushions, in your pockets.  Got that money?  Yeah, if you're not receiving Medicare or Medicaid, you're going to need to cough up an extra $82 if you want that strep throat test.)

If there are any social liberals reading this, right now, they are probably crying, "But what about the poor people?  They deserve a right to health care?"  Really?  Where in the constitution does it say that? 

Healthcare is a service, and like all goods and services, it should be paid for.  If I wanted a new television, I wouldn't go around demanding all of my co-workers give me $5, would I ? 

I agree some healthcare needs to be reformed, but forcing the taxpayers to bear the burden is just plain wrong and unconstitutional.

3. Food Stamps ($78 billion annually)

The other day, I was in the grocery store and a woman came up to buy her groceries with food stamps (oh, excuse me, the SNAP program).  Food stamps cover pretty much all food, except gourmet food, alcohol, tobacco, etc.  Things that can be bought with food stamps include:

Doritos
Sprite
Ice
Ice Cream
Cocoa Puffs...

OK, I digress.  Back to the story.  This woman paid for her groceries, then had a separate order.  She had deoderant, cigarettes, and a 40 ounce of Old English malt liquor.  The cashier rang her up, and she realized she didn't have enough money to pay for all three items.  Guess what she put back?  If you guessed deoderant, you'd be correct. 

However, she still had approximately $11 that could have been spent on the food.  Instead, we the taxpayers had basically given her $11 she ended up spending on malt liquor and cigarettes.

In North Carolina, according to the NC DSS, a family of four can get up to $668 in food stamps.  Think about that the next time you run your debit card at the Food Lion.

4. Public housing  ($6.64 billion)

Paying rent is a bitch.  No one likes to write a check every month for rent.  If I wanted free housing, I'd have to live with my parents (except my parents already turned my old room into the cat's room).  But a free apartment?  I think I will.  The problem with these public housing projects, despite being a burden on taxpayers is that they notoriously house violence and other criminal activity. 

5. Welfare cash, i.e  TANF (17.6 billion).  Yes, welfare recipients get cash.  Cold, hard, cash.  In recent months, some states have passed laws prohibiting recipients from withdrawing this cash at ATM's in strip clubs or liquor stores.  Seriously?  These people are not incompetent (in fact, many are very adept at working the system).  I'm pretty sure they can walk to the gas station across the street from the liquor store. 

In my experience alone, I have met welfare recipients with 12 tattoos (and she was planning her 13th), hair extensions (which can cost upwards of $1200), fake nails ($35 per set), iPhones, designer purses, and much more.

6. Free or reduced daycare or preschool ($9 billion).  Listen, if I was a parent, I'd want my kids out of my hair as much as possible.  Hell, I'd count down the days until I could send them to kindergarten for 7 hours a day.  However, until that point, working parents have to pay for daycare and preschool, which can cost over $500 a month.  

I know there are many miscellaneous social programs that could be eliminated too.  I also know what the left's argument will be- that I am inhumane and insensitive.  Meh.  Maybe.  I've been called worse. 

This couldn't be further from the truth.  In fact, I donate yearly to charitable causes, contributed greatly to a local foodbank, and donated enough furniture and clothing to comprise an entire room in a halfway house.  I did this out of my own volition, not because there was a gun to my head.  Churches, community organizations, and individuals should be allowed to, and encouraged to, help their fellow man. 

Can we cut these people off cold turkey?  No, that would lead to desperation and anger, probably leading to crimes of desperation.  It needs to be phased out, starting immediately.  Right now, families get more benefits per child they have.  If the government puts their foot down and says, "No more," these people will understand that they can not have more children, thus ending a cycle of cradle-to-the grave welfare.   However, if we wish to cut our expenses, the elimination of these programs is an important first step.  The future of our nation's economy depends on it.