Romney's misleading attack on social insurance
With their 'maker/taker' rhetoric, Republicans have unwittingly provided a strong argument against cutting public aid programs.
By Mark Thoma
Republicans have made it very clear that if they take power in November, they intend to cut government social insurance programs. In their view, these programs sap the incentive to work and create a nation of moochers who live off of the taxes paid by productive members of society. Mitt Romney's comment about the 47 percent who have supposedly become "dependent on government" reflects this line of thought. However, Republicans have unwittingly provided a strong argument against cutting social insurance with their "maker/taker" rhetoric.
One argument for social insurance is based upon the benefit of sharing the risks we all face in a capitalist society. Capitalism is better than any other economic system at promoting economic growth and providing us with the goods and services that we need – it certainly dominates socialism. But capitalism is also subject to turbulent fluctuations.
There are boom times and recessions, and sometimes the recessions are deep, prolonged downturns that impose large costs on workers who have done nothing at all to deserve such a fate. They do their jobs diligently day after day to support their families, then suddenly find themselves without a job and without a secure future when their place of employment fails because of a recession, structural change, or bad decisions by owners and managers. The purpose of social insurance is to spread these costs widely across the population instead of having them concentrated on the families of the unlucky duckies who lose their jobs or experience other misfortunes they had no hand in creating.
Social insurance can provide other benefits as well. How many people are stuck at a job they hate because they can't afford to lose health insurance benefits? How many more people would take a chance at opening a small business – the backbone of job creation – if they knew they could still have health insurance and a secure retirement, and if they knew there was a safety net to catch them if they failed? Social insurance helps people open new businesses or take new jobs, and this provides a better match of workers with firms and encourages new innovation.
However, Republicans see these programs through the maker/taker lens described above despite the evidence against this view, and argue they should be curtailed on this basis. But this argument doesn't hold up even on their own terms. There is a strong reason to support social insurance that comes out of the false maker/taker, producer-moocher distinction that Romney, Ryan, and other Republicans have made in the presidential campaign.
The maker/taker foundation for social insurance begins with the insistence of those at the top that "I made that." They may have gotten their ideas from the research department, put engineers and architects in charge of designing and executing the plan, left much of the training of workers to our educational system, used public infrastructure for water, electricity, and the delivery of raw materials, and relied upon police and fire protection to secure the investment. But when the product is completed and it's a highly profitable success, we'll be told "I made that." The success is mine alone.
The people who undertake such ventures do deserve credit for their entrepreneurial skills. But if the self-described makers are going to claim full ownership of the good outcomes, as they do, then they also have to take full responsibility when things don't go so well – for example when there is widespread unemployment and all of the difficult problems for households that come with it. After all, why should the working class pay the costs if the economy is in the hands of the so-called makers? The makers get all of the upside, but any downside should be socialized and shared broadly, is that how it works?
I'd prefer a society where we recognize that we are all in this together, good and bad, but if the "makers" are going to claim they are responsible for all the success in the economy – they whine loudly at any suggestion that profits should be shared with the working class to, say, offset rising inequality or support social insurance programs – then failure is theirs alone too. They must accept that it is their responsibility to offset the costs they impose when their individual or collective decisions create problems for working class households.
That means supporting monetary and fiscal policies that spur the recovery of output and employment when the economy underperforms so that people can get back on their feet as soon as possible. It also means doing what their false portrayal of social insurance recipients tries to avoid, paying higher taxes to support social programs that mitigate the losses to working class households unlucky enough to have their fortunes depend upon the abilities of the all too fallible "makers."
Unfortunately, however, as we've seen, there's little chance that those who see themselves as makers will take the personal responsibility for their actions that they are so quick to point to as lacking in those who rely upon social insurance programs in difficult times.
Mark Thoma is a columnist at The Fiscal Times. Subscribe to The Fiscal Times' free newsletter.
More from The Fiscal Times
Food Stamps are one of the most abused and wasteful social program this country has ever developed. A family of four receives more money monthly then my family of five spends a month on food. The amount paid out each month should be cut by at least one third. Here is why those on food stamps would not go hungry or malnourished because of this change. Purchases by food stamps should be restricted to the following: Fresh/frozen non prepared meats, fresh/frozen non prepared vegetables, deli meats/cheeses, canned goods, breads, non sweetened dairy, and juices. The following would be banned from being purchased by food stamps: Soda, bottled water, power and energy drinks, coffee, tea, ice cream, candy, energy bars, any pre-prepared meals or sandwiches, snacks/junk food, pet food, cigarettes and alcohol.
Are we losing our mind?
I truly think that the near collapsed of our country economics from the faulty Bush presidency, has produced some alarming public amnesia that prevents millions of our best citizens to think correctly, so mistakes are frequently made, like the selection of radical, boisterous Tea Party members to The House of Representatives in 2010. "The greatest chaos and a socio-political disaster" seriously impacting our survivor as the Great United States of America. Now, we have a hopeful that maneuvers members in the un-ruling House of Representatives aspiring for a big job as our country VP that is Mr. Paul Ryan. Is it our state of mental amnesia so acute that’s preventing us to acknowledged that Mr. Ryan, is a full flesh product of the incoherent Tea Party/Republican amalgamation, presently residing in the House of Representatives, they have a dishonorable 10% approval rate. Could this person make sound, integral, non-radical, honest, Vice-Presidential, and possibly Presidential decision if elected?? I wish America to recover fast from the disease before November, 2012, to vote full Democratic ticket. It’s a very serious, unfortunate business making the wrong voting decision for our future! My whole family is in a panic state since the last speeches of Romney in his processes to dismantle Social Security as we have known for years, and to dismember it by giving all the billion of dollars of the workers, the people of America, to the control of Large Banks, Mutual Funds Institutions, and Foreign Investment Trust, the moment there is a Stock Market Down Turn all the people's money will dissapear to never return. Are we crazy to vote for a guy that proposes this terrible catastrophe for our old retired relatives, as the same thing will happen to the coming new generation?
This is like rebutting something written by a child. He writes, "There are boom times and recessions, and sometimes the recessions are deep, prolonged downturns...." That's why we have unemployment insurance. Romney isn't talking about repealing unemployment insurance. At most he may limit it so people at least have an incentive to look for another job. Then he faults "bad decisons by owners and managers." When owners make bad decisions, they don't just lose their job, they go bankrupt. This may be a revelation to this third grade socialist essayist, but going bankrupt isn't a fun experience.
He writes that (and I'm not making this up) "people would take a chance at opening a small business...if they knew they could still have health insurance." Really. The only thing standing in the way of someone starting a new business is lack of health insurance. Do you really understand what the word risk means?
He mocks the "I made that" phrase. He instead credits engineers and architects. Same answer. If the business does poorly they move on to another job, the owner goes bankrupt. Huge difference.
This is an essay written by someone who has never taken a risk in his life. He thinks business owners don't risk everything they have, work sixteen hours a day, and deal with mountains of genuinely stupid federal regulation to start a business and make it succeed. He thinks engineers, architects and workers just magically show up all at the same place one day and start a business. Ultimately he thinks people aren't fundamentally harmed by government handouts. I hope he does better in fourth grade.
Forego:If you trust what Romney says I have a bridge to sell you.He`s toast anyway.Most
people could see his 16 lies at the convention.It`s time for the Repubs to start planing
for 2016.Whatever the Dems say:just go the other way.
You are responsible for yourself. I am not responsible for you, your actions, your faults or your screw-ups. I am not your keeper. There are no excuses for true irresponsibility. You screw up, you deal with the consequences. The world owes you nothing. This country owes you nothing except a return of what you have given; Nothing more.
If you have paid into Social Security, you are entitled to payment when you retire. You are not entitled to a raise every year or so for any reason. That is not how pensions or insurance works. Social Security is meant to keep you out of poverty, not pay for every convenience life has to offer.
If you paid into Medicare, you are entitled to help with some health care costs. You are not entitled to 100% paid coverage for every little pill and device on the market. Medicare is meant to keep you healthy and preserve your life. It is not meant to make you 100% comfortable. That is why you are to save your own money.
You are not entitled to Welfare; you are not entitled to Medicaid. You are not entitled to free legal care or an education. Anything you get is a gift to you from those who pay your way through life and you should get down on your knees and be thankful. No one is entitled to something they did not earn. Put you hand to better use. Welfare is to be a hand up, not a hand out. It is not meant to be forever, it is not meant to be a way of life. It is not a gift for or to your next generation.
Taxes on wages are the greatest evil of our American Republic. When government is free to steal from you, there are no limits to waste and abuse in government. If a person chooses to work extra hours or two jobs in order to better provide for themselves or their family, they should not be penalized, but that is what happens. The more you make by working harder and longer, the more money is stolen from you, and given to those who spend their lives living off the hard work of others.
The revenue the government needs to provide legitimate constitutional services should be obtained primarily from a national sales tax instead of a tax on wages. All would pay based on consumption, the more you spend the more you pay. The more luxury you surround yourself with, the more you pay. Your choice. A national sales tax system would capture money spent by criminals and by illegal aliens who currently pay near zero in taxes. There would of course need to be exemptions: Cars (already have a federal excise tax) Primary Residence/Rental Properties (vacation homes would be subject to tax/rental profit would be taxed) Fresh Food (Preprocessed foods and prepared meals would be taxed – only fresh/fresh frozen/canned goods would be exempt) Insurance Premiums, Health Care & Certified Education.
Adding another layer of tax to a business would not be fair. Businesses would need to be compensated by keeping a portion of the tax to cover the expense of collection and reporting. A percentage of .20 to .05 would be fair.
Never once voted and never will...........
Here we go once again down that useless road to elect a president.....
What you need to do if you want to fix this country is take 13 of our smartest teachers from our colleges and institutions and put them in office running our country as a presidential commitee. Every day smart people can heal this country and I would like to see that in my life time....
The killing will stop, wars will stop and the country will be on the road to having an economy that will heal....
This country was build on blood and if thats what you want from life then keep doing things just like we have been since the mayflower landed....
Issues can be resolved without war, we do this every day here in this country.
Money, power, greed will always be the outcome of wars making it a genocide of a people....Are you so hateful that this is what you want for children.
We never take a stance against anyone or any people as the USA we should get involved in things as the United Nations of the world.And set fourth a new standard for human live here on this rock.
Don't steal. The government hates competition.
WHERE'S THE STORY ON OBAMA AND HIS STAFF AND LIBERAL MEDIA
LYING ABOUT THE TERRORIST ATTACKS? HUM????
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Breaking up big banks is an untested solution to the too big to fail problem that attempts to isolate and dismantle large, troubled institutions while protecting the rest of the economy.
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