One of the first programs created in the 1930s was Aid to Dependent Children, which was designed to provide cash payments to families in poverty with children. It also provided money to widowed mothers to help them make ends meet.
The Social Security Act was signed by President Roosevelt in 1935. Other programs, such as the Works Progress Administration, were part of the larger social welfare system known as the “New Deal.” Other programs that have appeared since the end of World War II include public health and medical programs, child welfare services, school lunches, food stamps, surplus food distribution, slum clearance, and public housing.
What’s particularly interesting is the fact that, according to the Office of Management and Budget, for 2013, out of every tax dollar we pay to the federal government, at least 55 cents goes to Social Security, Medicare, Medicaid, the Children’s Health Insurance Program, (CHIP), and other safety net programs. Of the remaining 45 cents, 6 cents go to paying the interest on the national debt, 19 cents goes to defense and International Security Assistance, 7 cents goes to retirees and veterans, 3 cents goes for transportation infrastructure, 2 cents goes to education, another 2 cents goes into science and medical research, and 6 cents for all other federal programs. It is important to note that the implementation of “Obama Care” is not figured into the distribution of each of our tax dollars. It seems safe, however, to conclude that more cents out of every dollar will go into the main social welfare programs that already make up over half of every tax dollar we send to Washington – not even considering the mounting federal debt
Taking all of the foregoing into consideration, who can argue that we are not becoming a “nanny state” when at least 55 cents of every tax dollar is just a transfer payment. For the uninitiated, in economics, a transfer payment is the governmental redistribution of the wealth within the economy. More specifically, transfer payments occur without the purchase of either goods or services by the consumer. Put bluntly, transfer payments are nothing more than taxes which are collected taken from those who earn it and giving it to those who don’t. Prior to the beginning of the government’s efforts to help the average American during The Great Depression of the 1930s and early 1940s, there was no such term as a “transfer payment” because, as Bill Ward wrote, we used to take care of each other.
The sad part is that choosing to be a good neighbor has morphed into being forced into a social welfare system that, on balance, doesn’t work nearly as well.
That’s -30- for this week.