Thursday, July 12, 2012

6 charts that show the Welfare State run amok (From AEI)

Original articleJames Pethokoukis July 11, 2012, 1:40 pm


The original purpose of Medicaid was to provide improved healthcare access for poor people, while not turning the safety net into a trap. Under President Obama’s Affordable Care Act, Medicaid will be greatly expanded beyond what Congress originally intended.

In fact, as these charts show, it has already expanded beyond what Congress surely originally envisioned and, in the process, has created a terrible fiscal problem for the United States. (These charts and graphics come from a briefing today here at AEI, conducted by Gary Alexander, secretary of public welfare for Pennsylvania.)

A few scary factoids:

– In the 1960s, there were 18 workers per Medicaid recipient. Today that number is 2.5.

– The number of Americans on disability has risen 19% faster than jobs created during this recovery.

– There are just 1.2 private sector workers per 1 person on welfare or working for government.

– There are now just 1.65 employed persons in private sector per 1 person on welfare assistance.

Check out the charts and graphics for yourself:

1. Fewer workers and their tax payments have to support more and more Medicaid recipients.

2. The number of takers is now approaching the number of makers.

3. Medicaid and other welfare enrollment has exploded.

4. Medicaid enrollment is growing faster than economy.

5. Medicaid spending? You ain’t seen nothing yet.

6. Disability enrollees have exploded and are rising faster than job creation.

These charts show an out-of-control welfare state that is about to get even bigger, increasing both budget costs and dependency.


earnestandjest said...

Why the obsession with private employment? Public employees are not the same thing as welfare recipients. They produce goods and services services and create value just as much as private employees do.

BillM said...

If a public employee makes $50,000 per year and the tax rate is 25% it will take 3 private sector employees at that wage to pay for him/her. These jobs are parasitic. Public employees do not 'produce' things.

BillM said...

If a public employee makes $50,000 per year and the tax rate is 25% it will take 3 private sector employees at that wage to pay for him/her. These jobs are parasitic. Public employees do not 'produce' things.

earnestandjest said...

If a private employee makes $50,000 per year and the product their company produces costs $100, then it will take 500 customers to pay for him or her. That doesn't mean their job is parasitic, it means that they are providing a service worth paying for. There is no reason this cannot also be the case with public employees.

Doctors, police officers, and public transport staff are all paid for by the state. Do they not produce anything? Are medical care, law and order, and accessible transportation not valuable economic goods?

If you move into another jurisdiction, such as many parts of the United States, where doctors and public transport staff are private employees, are they then not parasitic? It would seem strange if this were the case; the fundamental nature of their work has not changed, nor has their clientelle.

Money paid to the government does not disappear. It is allocated to the provision of economically useful services. The government, like any private company, employs people to provide a service and then charges money (taxes) to pay their salaries.

BillM said...

Wow, here's the difference. 500 customers voluntarily paid for the product because they felt they received value. When a civil servant is paid $50,000 I have to pay my share even though I perceive no value. In the first case if I didn't perceive value, I would have kept my money for something else.

The government steals money from me at the point of a gun. It is no different from a parasite that only weakens its host.

In Canada I have little choice for health care. I lived here before medicare and I assure you it was MUCH better. I could see a specialist the day I wanted to!

The government has been forcing the private sector to work as slaves. The fruits of our labour go to the parasites,

emceesquared said...
This comment has been removed by the author.
earnestandjest said...

Your reply makes me think of a scene from a terrible sitcom I used to watch. A man is worried his wife might be cheating on him, so he lifts some fingerprints off a nightstand in his bedroom. He takes these to the police station, and asks them to analyze them using their database and tell him the results. They unsurprisingly say no, and he becomes upset.

"Why can't I use your database?" he says, "I pay taxes and have never used the police before."

"You ever been mugged?" asks the police officer at the desk.

"No" replies the man.

"You're welcome" says the police officer.

The obvious subtext is that everybody uses the police, whether they have any direct contact with them or not, because everybody benefits from the public safety that the police help to create. It therefore makes sense that everybody should pay taxes to support the police. I don't imagine you'll disagree with me on this point.

What you may not realize is that many other government services provide value for you in exactly the same way. The most effective way to reduce crime, for example, is to educate the population; educated people are far less likely to become criminals, and a university degree costs far less than a prison sentence. This, in addition to the massive economic benefit of an educated population, is why it makes sense for everybody-even those without children-to pay for the public education system, and why it makes sense for taxes to subsidize tuition. Things like public transit, socialized medicine, and social security have a similar function: You benefit them even if you don't use them, because they serve as a form of insurance that you can take advantage of if you fall on hard times.

You may contend that some services do not provide this kind of value, and I would tend to agree with you. Subsidies to the oil industry, for example, don't provide a whole lot of value for average Canadians. But that's why we run our government democratically. If you don't perceive a value from a particular service, then we can vote for politicians who will reform or eliminate it. This may be justified for many government programs, but it is no reason to suggest that every single public servant is a parasite who produces no value.

Anonymous said...

Convervatives are amusing. Here's one beholden to the myth that the private sector can do no wrong, and that public sector workers are only good to be lumped in with the welfare recipients he seems to hate so much.

As others have pointed out, public sector employees help make the country run, whereas the private sector would only care how much profit can be extracted (profit being making as much money for as little actual work as possible).

The irony here is that this Conservative blogger's party of choice is taking tax money and shovelling it to already profitable oil companies. Companies already the recipients of tax cuts. And the government is using Baseless Smears on people and organizations opposing these companies.

It's not welfare recipients and public service employees who are the parasites here.