The 47% Solution

Mitt Romney was not only correct, he correctly predicted his own demise:

If you doubt there’s an American welfare state, you should read the new study by demographer Nicholas Eberstadt, whose blizzard of numbers demonstrates otherwise. A welfare state transfers income from some people to other people to improve the recipients’ well-being. In 1935, these transfers were less than 3 percent of the economy; now they’re almost 20 percent. That’s $7,200 a year for every American, calculates Eberstadt. He says that nearly 40 percent of these transfers aim to relieve poverty (through Medicaid, food stamps, unemployment insurance and the like), while most of the rest goes to the elderly (mainly through Social Security and Medicare).

By all means, let’s avoid the “fiscal cliff”: the $500 billion in tax increases and federal spending cuts scheduled for early 2013 that, if they occurred, might trigger a recession. But let’s recognize that we still need to bring the budget into long-term balance. This can’t be done only by higher taxes on the rich, which seem inevitable. Nor can it be done by deep cuts in defense and domestic “discretionary” programs (from highways to schools), which are already happening. It requires controlling the welfare state. In 2011, “payments for individuals,” including health care, constituted 65 percent of federal spending, up from 21 percent in 1955. That’s the welfare state.

It turns out all the things we’ve been crying wolf over have already happened. The receivers outnumber the givers, and vote accordingly. (Many argue that the Latino vote also lined up for the Democrats due not to amnesty, but welfare.)

Yet, the subject is virtually taboo. Because Americans disapprove of government handouts, we don’t even call the welfare state by its proper name, preferring the blander term “entitlements” (the label used by Eberstadt). Mitt Romney’s careless comment about “the 47 percent” receiving government benefits — implying they’re all deadbeats — squelched any serious discussion in the campaign. Interestingly, his figure is probably low: More than 50 percent of Americans may already receive benefits. Obamacare will raise this, because families with incomes up to four times the federal poverty line ($91,000 in 2011 for a family of four) qualify for insurance subsidies.

Granting the welfare state’s virtues — the safety net alleviates poverty and cushions the effects of recessions — it’s time to pose some basic questions. Who deserves support? How much? How long? How much compassion can society afford?

Paul Ryan tried having this discussion. Should we means test Social Security and Medicare, phasing in changes over years, if not decades, so that no one currently receiving (or soon to receive) benefits would be effected? What are we to do about the demographic tsunami of retiring baby boomers, and the 2.1 children (at latest count) we expect to pay for their golden years (decades more like)?

This was how the Democrats responded, if you don’t remember:

Such imbecility demonstrated a fundamental abdication of responsibility or seriousness. AKA: Obama’s second term.

Finally, there’s a moral cost. It encourages “gaming” the system to maximize benefits. It devalues the ethic of “earned success.” There’s tension between helping the truly needy and fostering dependence on government and helplessness.

The welfare state’s great contradiction — the reason its politics are so messy — is that what seems good for the individual is not, when multiplied by thousands or millions of cases, always good for society. Politicians appeal to individuals who vote, but in doing so may shortchange the nation. Most obviously: The welfare state’s costs may depress economic growth.

Yeah, Romney didn’t win many people over with his 47% line. But he was right. And it left him only 53% of the people from whom to pick up 50.1% of the vote. It was a tall order, too tall.

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