Saturday, August 20, 2011

Special Comment- Public Assistance

Public assistance programs are an easy target for politicians when the discussion turns towards spending cuts. The straw-man, "The welfare-queen" has been effectively created by the right and allowed continued existence by the media. Yes, there are those who exploit* programs, but those few are no reason to be rid of those programs. Cutting Public Assistance programs is foolish, but it is especially so during an economic downturn.

Perhaps the most basic element in any economy is spending. If there is spending going on, the economy is doing well; if spending isn't going on, the economy is doing poorly. Public Assistance programs are perhaps one of the best ways a government can encourage spending. It's actually quite simple. Public Assistance gives money to poor people and when poor people get money they have to spend it. Basically, money spent on programs like Unemployment and Welfare are almost 100% stimulus.

The fear of creating a "Government Dole**" and that society would then become dependent on that has long been part of conservative belief. However, that fear has never been validated. "Full" Employment in the United States is somewhere around 95% employment and that has been the number reached during times of economic success for many years. During times of economic distress, between successful periods, the "Dole" has been increased, but once the economy has recovered, people have gone back to work with no government dependency being created.

The right likes to talk about cutting these useful programs. However, if someone brings up tax increases on the wealthy, they damn near lose their minds. What the true effect of keeping the tax rates low for the wealthy is certainly not what they claim it to be; supply-side economics have failed. Unlike the poor who have to spend their money, the wealthy are able to save. If they see more money because of government policy, it isn't going back into the economy immediately.

It also seems to be this myth that taxes are just thrown into a hole in the ground. The government spends every dollar it gets in tax revenue and then some. We all know that asking those who can afford it to help reduce that "and then some" would help stabilize our and the entire world's economy. We need to continue to spend stimulus dollars, especially in the form of Public Assistance, while increasing revenues. Hurting public assistance does not have any place in an economy that is as shaky as ours currently is.

Thanks for reading and please comment.

*See "The Wild and Wonderful Whites of West Virginia" on Netflix instant streaming.
**See Herbert Hoover

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