The United States is so divided culturally and politically that we are nearly two different Americas.
Income disparity has skyrocketed since the Reagan presidency, and the wealthy are pressured to provide their fair share to the 99 percent. Adversely, if the government spends money to bridge this income gap, dependency on government-funded programs increases and incentives to work diminish. And there’s the rub. President Obama’s view on welfare is that government-funded programs — Medicare and Medicaid, for example, “free us to take the risks that make this country great.” But, more people rely on taxpayers’ money to provide for themselves and their families, sacrificing personal prosperity for a short-term guarantee. If anything, these safety nets increase one’s aversion to risk.
The American Dream has agonizingly evaporated because it is unfeasible for pursuers at the bottom to transcend the income gap. Perhaps the president was speaking to immigrants who came here with nothing and took risks chasing a better life. But, I doubt the government’s safety net influenced decisions in their pursuit.
Modern entitlement spending originated from Lyndon Johnson’s The Great Society agenda during the 1960s, which saw the birth of programs like Medicare and Medicaid. The Great Society was an extraordinarily ambitious program to end poverty and promote equality. By creating equal economic opportunity through unprecedented spending on education, Johnson sought to win the “War on Poverty” by alleviating the pains of those most impoverished.
The backbone of our modern welfare state is encapsulated by the idea of “means-tested” programs, such as Medicaid and food stamps, where eligibility is determined by your means to survive without help.
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In a recent Wall Street Journal column, political economist Nicholas Eberstadt, wrote that “about 35 percent of Americans (well over 100 million people) are accepting money, goods or services from ‘means-tested’ government programs. This percentage is twice as high as in the early 1980s.”
With roughly 19 percent living below the poverty line in the 1960s, these programs targeted low-income families and poor students to make the American Dream more attainable. Fifty years later, recent data by the Census Bureau show rising poverty rates reaching levels over 16 percent. Since 1964, the government has spent nearly $15 trillion in total welfare spending, which has left the poverty rate inexplicably close to where it was when the War on Poverty began. The unfortunate dilemma with these programs is that we throw money at problems without regards to any substantial progress.
America’s culture is deeply rooted in the paramount idea that through hard work and determination, a person can pull himself up by his bootstraps and climb the proverbial social ladder.
Instead of being a bridge to mitigate tough times, welfare has indeed become a way of life, a new America. Most people will agree that the lack of economic opportunity at the bottom is a primary driver of income inequality, welfare dependency, poverty and access to education.
It’s difficult to support an argument for spending almost $700 billion a year, which is only increasing, to fund these programs that have produced few, if any, results.
The government should focus on funding for smarter life choices, small things like exercising or healthier diets. This can help individuals focus on increasing their prosperity while having a safety net for things that promote health and happiness.
So, what are ways to create economic opportunity? To reduce dependency? To empower a new America?
Graduating from a four-year university is no longer working as a solution to bridging the income gap. Ask recent grads with a bachelor’s degree, or even a graduate degree, how easy it is to get a job. Any job. If we look at Americans under 30 who don’t have jobs or stopped looking altogether, the unemployment rate in September for those aged 18-29 rises to 16.6 percent. The unemployment rate without the labor force participation rate is at 12.1 percent, which is about 4.5 points higher than national rate at 7.8 percent back in September, where it still is today.
By transforming community colleges into strong vocational programs, people will have a place to learn new skills, start a profession and earn a living. On top of that, employer-sponsored but government-funded training programs can accomplish better results than current federal training programs. In partnership with local businesses and national corporations, creating easy-to-access programs can improve the quality of our labor force, reduce unemployment and wean ourselves off of inefficient spending.
Student debt recently surpassed $1 trillion. The government provides money for students to earn a four-year degree, shifting some of this cash into more effective, private programs can better improve the economy.
I would suspect people would support programs that incentivize people to work and assist with the means to obtain it. This type of spending avoids the unrestrained culture of entitlements and promotes equality.
Tommy is a senior in Business. He can be reached at [email protected].