Saturday, February 11, 2012

Entitlements - Makers vs. the Takers

Obama and the Democrats are against reforming the entitlement programs for two reasons. One, the more people dependent on the government, the more votes for the Democrats. Two, if the Republicans would, by any chance, decide to act in the best interests of the nation, and bring a halt to the increase in entitlement spending, then the backlash would also favor the Democrats. It is a win-win situation for the Democrats, and a lose-lose situation, both for the Republicans and the nation.

You’ve played by the rules. Worked hard to put yourself through school. You’ve gotten a decent job and you pay your taxes. You’re faithfully paying down your mortgage and saving money in a 401(k) – all to secure your finances and your future. But now there are a lot more “takers” than “makers” in this country – and the impact is systemic and long-lasting.

The Fiscal Times (TFT): With so many people out of work and so many suffering – through no fault of their own – how do you draw the line between real need and a so-called “culture of mooching”?
Charles Sykes (CS): That’s obviously the most difficult part, the gray area in the middle. There’s a distinction between needing temporary aid versus using a vast network of dependency as a way of life. Unemployment compensation, for example, is necessary for an amount of time. But when you start getting into 90-plus weeks of unemployment, hasn’t a temporary stopgap now become an excuse for people to avoid taking jobs? A number of economic studies have shown that the longer these benefits are extended, the higher the unemployment rate is. People make a rational calculation that it’s easier to stay on the couch than to get a job that maybe isn’t as great as what they had before.

TFT: Isn’t it a big leap to go from someone on unemployment to a wholesale expansion of dependency?
CS: If we have hungry children, of course we as a compassionate society have an obligation to take care of them. But I think we’re going through a massive concerted effort to expand the number of people who are dependent, who are looking to the government to buy them free breakfast, lunch and dinner, far beyond any reasonable definition of genuine need.

TFT: Is this new learned helplessness, as you describe it, a replacement for the employed-for-life, taken-care-of-for-life notion that many in earlier generations have known?
CS: Maybe. But ultimately the use of other people’s money and the vast expansion of benefits won’t substitute for what used to be provided for by the private sector. You can certainly understand the attraction of the bailouts, the freebies, the handouts, the dependency – for people who are nervous about the economy. But some politicians play upon this anxiety by promising things that are ultimately unaffordable and unsustainable. This endless promise that there’s always enough money in someone else’s pocket won’t work. It’s very seductive in some ways, but it’s not a solution to our economic problems, and it’s changing the culture and character of our society. It’s not the self-reliance and sense of independence and industry that our nation was founded on.

TFT: Who among the current presidential candidates would accomplish that, in your view?
CS: Unfortunately the person I’m politically closest to is not running. That’s Paul Ryan. He’s just about he only political figure who has tried to grapple with this and say, How would we slow this entitlement world – slow the growth of spending? And if it proves to be the third rail of politics in this election season, then I think we will have squandered one of the best opportunities we’ve had in a generation.

Read the full Fiscal Times interview here.

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