It seems that much of our discussions of economics and politics is framed by emotions and not logic. Why, for example, are so many willing to blame our current economic downturn on the most vulnerable of our society? Why are we blaming the poor and the elderly for our economic problems? Do we believe that if we can show how those who are just below our status deserve what they suffer that we will somehow escape a similar fate? Why are we jealous of those who have less than we do and not those who have more? Do we believe that we are somehow different that the poor and more like those we see as successful and wealthy? Do we believe we would be able to achieve wealth if it weren’t for those below us pulling us down?
Social Security, Medicare, Unemployment Compensation, Medicaid and our system of helping the poor are currently being called “entitlements.” The implication is that these benefits are unearned by the recipients, that these people are somehow lazy and unmotivated to care for themselves and leeching life from the rest of us. Such a characterization may be true for some. It is, however, no more true than to say all business people are crooked and all bankers are guilty of usury. Thirty-five percent of our nation’s poor are children under 18. Nearly 30 percent of all households headed by single women live in poverty, double the rate of households headed by single men and
six times the rate of married couples. Ten percent of Americans over 65 live below the poverty level. Over nine percent of all Americans are looking for work. This number does not include people who have given up looking or those who have taken a part-time or minimum wage job.
Are poor children responsible for their economic condition? Didn’t those collecting Social Security pay into this system? Haven’t those receiving unemployment benefits had a job at some point? Are single mothers somehow more lazy than single fathers and that’s why they are twice as likely to live in poverty? Do “welfare queens” somehow manage to create more children by themselves? What would the rate of elderly poor be without our current Social Security system? What would be the cost to communities and society as a whole if poor children, single mothers, and the elderly were left without these programs being labeled as “entitlements?”
It is also inaccurate to view the money spent on these social safety net programs as simply a cost. These dollars spent on the poor and elderly, whether you think they deserve them or not, are not lost. Virtually all the money paid out through these programs is spend for food, clothing, housing, utilities. The money all goes back into the economy. Social Security checks are spent. Hospitals and doctors get paid. They in turn pay their staffs and spend their profits on homes, cars, food, vacations. Food stamps pay the grocery store (I don’t know any grocer that refuses them.) Maybe some welfare checks are spent foolishly on alcohol, cigarettes and flat screen televisions, but even those sales keep someone in business.
So why to we see money spent on the poor as a drain on our economy? Don’t tell Sam Walton’s kids. Consider how much wealth has been generated by the Walmarts of the world by selling to those at the lowest economic classes. Selling cheap goods to the poor has made them the world’s largest retailer and made the Walton family some of the richest people in the world.
It is not taxation of the rich that has caused our current economic crisis. It is the lack of growth in income for the middle class that has caused markets to dry up. When the middle class could no longer make their mortgage payments or possibly not even get a mortgage, construction jobs disappeared. Home renovation suppliers saw their sales fall. Sales of furniture, floor coverings, and household goods dropped off. The economic ramifications of stagnant wages and increasing costs for staple goods has rippled through our economy.
At the same time, the wealthy are seeing their net worth increase. They are not, however, spending their tax savings and increasing wealth on things that would create new jobs. They can only spend so much money on luxury yachts and $100,000 watches. These few are not likely to invest their money in a stagnant economy. They buy gold, valuable and rare art, and stash their funds in off-shore bank accounts. They will not create new jobs unless there is demand for whatever those jobs produce. Demand must come from the many and until the many see their economic well-being stabilizing, they will not be spending more.
We are being encouraged to blame the poor and to give credit to the rich for the renewal of our economy. That is backward. It is the workers who produce real new wealth. It is the lower and middle classes that keep wealth circulating. We will make a big mistake if we adopt policies which ignore that reality.
Copyright © 2011 Janet Jacobson and Sustaining the Northern Plains