The Culture of Dependency is Real and Integrated with Income Inequality

I know that sounds obvious but let me explain.  I define the culture of dependency as being anyone who benefits economically from government policy.

So what are the largest forms of supplementing individual's wealth prospects?  I am confident all belong on the list, but after the 1st two I am guessing at their proper placement.

1.  Home Mortgage Interest Deduction
2.  No tax on Employer provided Health Insurance and tax deductibility for the employer
3.  Agricultural subsidies
4.  Medicaid
5.  Food Stamps
6.  Other forms of poverty alleviation.

I don't include Medicare on this list because I think it is still self-funded, but I am not sure.  And I do not include Social Security because we all pay into it for our working lives and it does have a trust fund that still has a positive balance.  I know on a cash flow basis, the money went to the Treasury and was spend by every Congress since WWII ended, but that doesn't mean the beneficiaries should have any benefit cuts beyond what is necessary to keep the system nominally self-sufficient.  Notwithstanding AARP, changing the inflation calculation would be an appropriate way to fixing 30% of the long term social security deficit.

Paul Krugman addressed his view of the real Republican agenda today.  He attributes the GOP motivations to base racism which I dismissed yesterday.  But he also highlights the inconsistencies in GOP policy that drive me nuts.  If the GOP really wanted to fix the budget rationally, you would address the other bigger issues on the list.  You would support tax reform today so there could be a debate on it that voters could render an opinion on in November.  But Boehner buried Camp's proposal.

Link to Krugman

Meanwhile, Krugman does highlight what I attempted to yesterday.  The culture of poverty is both an urban and rural phenomenon and it is pervasively intertwined with Income Inequality.  It is has increased because of globalization and the increased use of technology.  There are no simple solutions, but causing people to starve is neither humane nor productive.  Hungry people don't have the energy to look for work.  And as both the Daily News and the New York Times highlighted in articles today, many of the poor are working at minimum wage jobs.  And they are hard working and care about their families.  That is what the GOP is supposed to be all about, but they do not come up with policies that address their needs while trying to fulfill the larger appropriate goal of balancing the budget.

How Hard it is to get out of poverty

Urban Working Poor Going Hungry

The really galling thing to me is that the supposed financially conservative Republican Party borrowed the funds to fight the War on Terror and still does not want to raise the revenues necessary to pay down that debt.  I don't believe tax rates should be at the proverbial moon rate, but if you cut out some of the subsidies that are going to the broad middle class through interest deductions and employer provided health insurance, you might contribute meaningfully to a balanced budget and repayment of the War on Terror, which we all benefit from.  Yes, housing prices might go down, but there is no free lunch.  Something the Bush II Administration forgot as they believed an economy built on housing and ever increasing amounts of mortgage debt could provide the economic growth to pay for their government.

I know it is time to move beyond the Bush II era and focus on today.  But as long Grover Norquist and the Koch Brothers are actively funding the same type of politicians who believe in Trickle Down Economics, in starving the beast by cutting taxes endlessly without any consideration of the necessary spending of the government and a proper humane safety net; I will keep pointing out that government cannot function without revenues and government is a necessary thing for a fair society.

I do not believe that government has an easy solution to the pervasive poverty created by globalization and technology.  But the government can be humane in discussing it and not casting blame on those who make a mistake.  We need some social mobility as a society or hope will die and that would not be good.

There was little economic growth prior to Democracy and the Industrial Revolution because the rich were only interested in preserving their wealth.  Democracy is a necessary support for middle class supported capitalism historically and maybe even today as we see the the growth of oligarch's in the emerging markets.  But the state of the international world cannot be a subject today in this posting.