Tag Archives: social safety net

Let’s Talk About Infrastructure

What is government for?

That is the question at the root of all political philosophy, and by extension, all punditry. After all, the way we evaluate how well a government is functioning is by comparing its operation with its mission: is the state doing what it is supposed to be doing? If so, how well?

I began my most recent book by cataloging the areas of “broken-ness” in American governance–what I (and most commenters to this blog) believe to be areas where our government is failing to perform. And that, of course, raised the question: what should government do? Why do humans need the collective mechanism we call government (at least, beyond restraining Leviathan, per Hobbes)?

My conclusion–with which, obviously, you all may differ–is that government is needed to provide necessary infrastructure–both physical and social.

The dictionary defines infrastructure as the “basic physical and organizational structures and facilities needed for the operation of a society or enterprise.”

Most of us are familiar with this definition in the context of physical infrastructure: roads, bridges, sewers, the electrical grid, public transportation, etc. Within the category of physical infrastructure I’d also include physical amenities like parks and bike lanes. Schools, libraries and museums probably fall somewhere between physical and social infrastructure. Purely social infrastructure includes laws that prevent the strong from preying on the weak, and the various programs that make up what we call the social safety net.

I have just returned from Europe where I attended a conference in Stockholm; on the way home, I stopped in Amsterdam to see my middle son, who now lives there. Sweden and the Netherlands vastly eclipse the U.S. when it comes to both kinds of infrastructure.

The academic conference I attended was on “Social Citizenship,” a concept commonplace in Europe and utterly foreign to Americans. (The conference was focused upon the effects of significantly increased migration on the social unity fostered by the European approach to social welfare–tribalism isn’t restricted to the U.S.and Europe is far more diverse than it was even a decade ago.)

Social citizenship and policies that support unity are topics that increasingly intrigue me; my most recent book focused on them and I routinely blog about them. But right now, I want to rant about physical infrastructure.

I took the subway in both Stockholm and Amsterdam (In Amsterdam, I rode their interconnected transit system, which includes trams, subway and buses). In both cities, the subway stations were immaculate, and there was lots of public art. Electronic signs informed passengers when the next train was due–usually, within 4-5 minutes. The cars themselves–and in Amsterdam, the trams–were shiny and clean, and looked new–although in Amsterdam, my son said they were several years old, and simply well-maintained.

Well-maintained. What a concept…

It wasn’t only public transportation. Streets and sidewalks looked equally well-tended; in Amsterdam, according to my son, sidewalks throughout the city are replaced every 30 years. Also in Amsterdam, where there are 1.3 bicycles for every resident and absolutely everyone bikes, protected bike lanes are everywhere–usually, they separate the sidewalks from the roadways.

Thanks to robust public transportation and the culture of biking, there were far fewer cars on the streets than there are here, and among those that were I saw numerous hybrids. Efforts to use clean energy were prominent. (Coincidentally, a friend just sent me an article about a European consortium that plans to deploy 1,000 fuel cell buses in European cities, and to provide the necessary hydrogen infrastructure.)

All in all, the clear impression was that we are a community, and we care. 

In these European cities, government’s approach to infrastructure provision appears to be a collective effort to ensure a workable, efficient and pleasant environment for all citizens–not a grudging and slapdash accommodation for those who cannot afford private vehicles.

I’m jealous.

 

 

“Trumped Up” Social Welfare Crises

There are two utterly incompatible approaches to the maintenance of social safety nets–and beliefs about the obligation of a society to its most vulnerable members.

On one side are those who recognize the obligation, who see the payment of taxes to support social programs and government services as the “dues” we owe to the “club” we call America. On the other side are those who reject that obligation, who insist that individual citizens (including, presumably, children, the elderly and the disabled) must be personally responsible for their own needs, and to the extent they are unable to do so, that private charity should fill the gap (despite copious evidence that charity is grossly insufficient to the task).

Those in the first category have legitimate differences about how we discharge our obligations to each other, about the efficiency of programs put in place, about the evidence we can reasonably require in order to separate out the truly needy from the merely greedy. But they understand that no society that ignores its neediest citizens can be “great” or even good–let alone stable.

Those in the second category tend to be financially comfortable (or better). Their incentive to ignore reality and the plight of others is rooted in their desire to keep more of what they have and their insistence that they have “earned” their good fortune and other folks could too if they really wanted to.

They are the ones who have controlled Congress. And as Robert Reich has written,

Republicans would love to get rid of Social Security and Medicare. But they can’t, because Social Security and Medicare are among the most popular of all federal programs. Besides, most Americans have been paying into them their whole working lives, and depend on them.

Since any overt attack on these programs would be politically suicidal, the Republicans have decided to do nothing–aggressively– to refrain from the “fixes” and accommodations to economic changes that all such programs require from time to time.

The trustees for Medicare and Social Security – of which I used to be one – say Medicare will run out of money by 2026, three years sooner than last projected, and Social Security will run out in 2034.

But this doesn’t have to be the case.

Here are three easy fixes to Social Security and Medicare that Republicans don’t want you to know about.

First: Raise the cap on income subject to Social Security payroll taxes.

This year, that cap is $128,400, meaning that every dollar earned above $128,400 isn’t subject to Social Security taxes.

As Reich points out,  the CEO of a big company making $15 million dollars a year pays Social Security taxes on just $128,400 of that, while the nurse practitioner taking home  $100,000 pays Social Security taxes on every dollar of his or her income.

Reich’s second “fix” addresses a situation that most of us find outrageous:

To help rein in Medicare costs, allow the government to use its huge bargaining power to negotiate lower drug prices.

Every other country negotiates these prices; that we do not is an unconscionable gift to big Pharma, which already benefits from the immense amounts through which taxpayers subsidize research. (Pharma already spends more on advertising, marketing, and lobbying than it does on research, so protests that lower profit margins would curtail research are disingenuous at best.)

Reich’s third “fix” is the least intuitive–and the most intriguing.

Third: To deal with a basic reason why Social Security and Medicare are running out of money, allow more young immigrants into the U.S.

The basic reason why Social Security and Medicare are running out of money is the American population continues to age and live longer – leaving a relatively smaller working population to pay into Social Security and Medicare.

What to do? Allow in more young immigrants. Immigrants and their children are the fastest growing segment of the working population, already contributing billions in payroll taxes every year. Instead of shutting immigrants out, allowing more immigrants into the country will help secure the future of Social Security and Medicare.

I have previously reported on the multiple benefits conferred by immigration; this is another.

If you belonged to a club in which some members refused to pay the dues that maintained the facility and its amenities, you’d terminate their membership. We can’t terminate the citizenship of people who are unwilling to pay their fair share, but we can save Social Security and Medicare. As Reich says,

Raise the cap, negotiate drug prices, and allow in more immigrants. Do these three things and you won’t have to worry about Social Security and Medicare not being there when you need it.

 

 

 

Talk About Cutting The Safety Net….

When you elect people who have very limited knowledge of government or the legal system, you get a lot of unanticipated and unfortunate consequences.

Trump is hardly the only self-proclaimed “genius” who is actually clueless; in fact, voters need to recognize that the real villain of this surreal moment we’re experiencing isn’t Trump–who is arguably too far out of it to even know what he’s doing–but the current in-over-their-heads gang of Congressional Republicans who are protecting and enabling him.

A recent, glaring example is in the combined impact of their much-touted tax “reform” bill and their proposals to dramatically cut America’s social safety net.

Republicans love to talk about the negative consequences of social welfare programs–the purported encouragement of “dependency,” the “unfairness” of taxing working folks to support laggards who are sitting at home eating bon-bons (and while they rarely say it out loud, there is usually a “wink wink” suggesting  that those laggards are disproportionately black or brown). Data and evidence–things foreign to their comprehension–dispel all of this, of course. For example, most adult food stamp recipients work full time, as do most non-disabled adults on Medicaid. There is absolutely no research supporting accusations that receipt of welfare produces dependency, and most people on welfare are white.

Even more irritating is Republicans’ repeated insistence that, if government would just get out of the way, poor people’s needs could be met by private and/or nonprofit charities, especially religious charities. When George W. Bush called on the “armies of compassion” to replace much of the welfare system as part of his “Faith-Based Initiative,” researchers (I was among them) pointed out that private charities didn’t have the resources to even come close to his goals–and most churches were barely keeping the pastor paid and the roof fixed.

As we’ve seen, facts are pretty irrelevant to this crew. Nevertheless, given their constant lip-service to American generosity and private-sector charity, you wouldn’t expect them to pass a tax bill that threatens to cripple those same efforts. After all, they are now proposing massive cuts to Social Security, Medicare and Medicaid–cuts they evidently assume will be made up by funds from the charities their tax bill is eviscerating, if they think about it at all.

Patrick Rooney is an economist at the Lilly School of Philanthropy at IUPUI, where I teach. (Full disclosure; I am adjunct faculty at the Lilly School.) I know  Patrick and his work, and he is a first-rate scholar. Here’s his analysis of what the tax bill means for charitable giving:

The tax-code overhaul that Republican lawmakers approved and Trump signed into law will raise the price of charitable giving for millions of Americans, surely reducing how much money the nation gives.

As an economist and a scholar of philanthropy who researches how public policies shape charitable giving, I anticipate that the tax tweaks will lead Americans and U.S. companies to donate roughly US$21 billion less per year to charity.

The link will take you to the article detailing the impact of the tax bill’s various provisions on incentives for charitable giving, and those details are instructive. But the real “take away” is the utter failure of Congressional Republicans either to connect the dots– or worse, to care about the harm they are doing to millions of Americans (most of whom are elderly or children) in order to further enrich their donors.

Those who aren’t “geniuses” like our President–aka mental midgets–are something even worse. They’re moral midgets.

 

 

Has Liberalism Failed?

For quite a while, I called myself an “18th Century liberal,” because I considered myself a genuine conservative, a term I defined as a fiscal conservative who believed in conserving the libertarian principle developed during the Enlightenment.

The meaning of “liberalism” (at least until Rush Limbaugh et al appropriated the term for use as an expletive) was–as Fareed Zakaria recently noted in a New York Times book review–

the tradition of liberty and democracy and, by extension, the open, rules-based international economic and political system that has characterized the Western world since 1945, and many more parts of the globe since the fall of the Soviet Union in 1991.

A couple of weeks ago, in the Sunday New York Times, Zakaria reviewed a book by Edward Luce, titled “The Retreat of Western Liberalism.” Luce was surveying the economic and political decay of the United States and European democracies, and he was less than sanguine about the future of Enlightenment liberalism, to put it mildly.  I haven’t read the book, but judging from Zakaria’s response, Luce places much blame for the current assault on liberty and democratic norms on the “elites” that it has become so fashionable to bash (and so rare to define).

Zakaria points out that recent European elections–with the exception of Brexit–have actually been cause for celebration by those who are rooting for the success of the European Union and the stability of liberal democratic regimes.

Instead of viewing the entire West as being overwhelmed by a tsunami of right-wing populism, we might step back and study countries separately. Those that have had strong safety nets as well as programs to help people move up the economic ladder, like Northern Europe, do not have as much of a problem as others. There, immigration rather than economics is the key driver, but that will wane in importance since immigration flows are dwindling. In my view, Germany seemed vulnerable to right-wing nationalism in the form of the Alternative für Deutschland only after Merkel’s extraordinary decision to take in a million refugees, but as that fades into the background, so has the AfD. In France, Macron is articulating a defense of Western democracy against Russian interference in much stronger terms than is the American president.

Zakaria began his review by focusing upon a recent speech by Chrystia Freeland, the Canadian Foreign Affairs Minister. The speech was widely reported in the U.S., because Freeland essentially suggested that Canada–along with other democracies–needed to step up its defense of the liberal international order to compensate for the “situation” in the United States. (Although she never mentioned Trump, it was pretty clear what “situation” she was referring to.) Zakaria returned to Canada in his final observation.

In many ways, the one Western country that has seemed immune from any of this populism has been Chrystia Freeland’s Canada. That is not because Canadians are genetically immune to populism but rather because for the last 20 years, they have pursued good public policy. Canada’s economics, health care, banking and immigration policies have been inclusive and successful. One sign of the strength of Western liberalism would be if the United States could recognize that there are now other countries with a deep commitment to these ideas and values that might even be approaching them more successfully than is Washington. The West, in other words, we now live in is a post-American West.

Social science research confirms Zakaria’s reference to “good public policy.” Countries with strong social safety nets, like Canada’s, are more stable and less violence-prone; their populations exhibit fewer socially undesirable behaviors (everything from crime rates to out-of-wedlock births, divorce, drug abuse, etc.)

Paul Ryan and his cohort can insist that taking away access to health care and reducing other social supports is “pro freedom,” but people aren’t free when their waking hours are consumed by efforts to put food on the table, and their nightmares are of an accident or illness that plunges them into bankruptcy.

Eighteenth Century liberalism promised personal autonomy; your right to live your life in accordance with your own values and beliefs, so long as you were willing to accord an equal liberty to others. That’s a concept of liberty that is not only consistent with a social safety net–these days, as a practical matter, it requires one.

 

The Social Safety Net and the Ideologues

I know I tend to harp on the difference between thoughtful policymaking and ideology. Good policymaking depends significantly upon expertise and research, learning from experience (otherwise known as trial and error) and careful empirical observation; ideology dismisses poor results and unfortunate side-effects as irrelevancies or attributes them to insufficiently thorough implementation.

Congressional Republicans, led by Paul Ryan, and with the likely concurrence of the Senate GOP and Mitch McConnell, are determined to make drastic changes to American social policy. To the extent they are not prompted by corruption (that is, acting on behalf of and at the behest of their donor base), their desired changes to Social Security, Medicare and Obamacare are entirely ideological. They don’t want to improve these programs; they want to dismantle them.

It has long been an article of Rightwing faith that welfare programs—indeed, social insurance of any sort—creates unhealthy dependency. (Somehow, that belief does not extend to corporate welfare. But that is a post for another time.)

The evidence, not unsurprisingly, suggests otherwise.

There is substantial research suggesting that countries with more robust social safety networks experience fewer socially undesirable behaviors: less crime, less divorce, less child abuse…the list goes on. Rates of murder, robbery, burglary, rape, and other serious crimes are generally much higher in the U.S. than in industrialized nations offering universal health care and other social supports. Homicide rates in the U.S. have consistently ranged between three and twenty times those of other industrialized countries.

It is particularly notable that Canada’s murder rate is far below that of the U.S. (running around a fourth of our levels). For homicides committed by youth, the U.S. rate has been as much as ten times the Canadian levels. Yet Canadians watch American television, log onto American websites, read American publications, share our culture. There is also widespread gun ownership in Canada.

What most differentiates us is the fact that Canadians have guaranteed health care and less social insecurity.

The U.S. is more economically stratified than any other advanced country. Its levels of income inequality and relative poverty are triple those of other wealthy nations. Scholars tell us that developed countries having relatively low levels of income inequality have low crime rates; in countries where one segment of the population has great wealth while another segment is in extreme poverty, crime rates are high.

As a 2015 article in The Week noted, the differences in approach to social welfare are ideologically based.

Conservatives often want to tie safety net programs to having a job, so that people aren’t tempted by handouts to hold off working. There are work requirements for food stamps. More heavy requirements were added to traditional welfare in the late 1990s. And now Republicans are suggesting requirements for Medicaid as well. This makes little sense. The much more generous European systems have higher labor force participation, and the U.S. economy has done progressively worse over the last three decades at actually creating enough jobs for everyone to have.

Add it all up, and it’s not surprising that most other advanced Western countries have much lower poverty rates than America.

Recent research has tied declining rates of marriage to poverty, and has confirmed that “failing schools” are typically those trying to educate children from impoverished homes—that growing up in poverty creates identifiable physical and emotional impediments to learning.

There is an overwhelming amount of evidence that a strong social safety net reduces crime and other social dysfunctions that cost Americans significant tax dollars—and that the availability of such social supports does not discourage workforce participation.

Evidence, however, is no match for rigid ideology. Americans should expect a full-court effort to gut Social Security and Medicare by zealots impervious to evidence.