Local view: Entitlement reform can boost economyMy American Heritage Dictionary defines “entitlement” as “a government program that guarantees and provides benefits to a particular group.” There are federal, state, county and even some municipal entitlement programs. They serve the valid and worthy goal of providing for needy folks.
By: Thomas B. Wheeler, for the News Tribune
My American Heritage Dictionary defines “entitlement” as “a government program that guarantees and provides benefits to a particular group.” There are federal, state, county and even some municipal entitlement programs. They serve the valid and worthy goal of providing for needy folks.
But have we gone too far and created “dependency?” Are we promoting self-reliance and personal responsibility?
Unquestionably, there are people who need and may always need a subsidy to subsist, but when aid is given with few expectations of something in exchange, it does quash personal resolve.
We hear it is “shaming” or “shameful” for people in poverty: Some have no transportation, others are single parents, they lacked role models, etc.
So how do people climb out from under and emerge as taxpaying, responsible citizens?
In the 1960s, President Johnson declared a War on Poverty. How much money and effort have been expended and extended since this laudable undertaking? How do we measure its success or impact? I trust there is a better answer than, “Think how much worse we would be without these programs?” Can we not measure the effectiveness of these various government programs? How many people actually have been raised out of poverty? How did they do it? Can we not find successful models and either emulate or tweak them to further advantage?
Two examples come to my simple mind: Federal unemployment, which has been extended countless times, and food stamps.
Interestingly, unemployment rates seem to fluctuate not only with jobs created and jobs lost but with people dropping out of the employment market. Does this not skew any meaningful measure of unemployment? Why not just grant unemployment for a certain length of time, say three months, and then reduce it by 25 percent per month? That would give people and incentive people to find work or create their own revenue streams from self-employment via cash-and-barter, which many already are doing (i.e. double–dipping).
Then there are food stamps. Anyone who goes regularly to a grocery store has seen unhealthy-looking folks with food stamps loading up on soda, processed foods, etc. What if food stamps were more health-oriented (don’t count pizza with tomato sauce as a “vegetable,” despite what some school menus maintain, etc.)? What if food stamp use was limited to fresh fruits, real vegetables, and meat and fish? Food stamps would then pay for a narrower but more nutritionally sound diet. We might even counter the obesity and diabetes surge.
As a chartered financial consultant (among other professional designations), I have learned part of my job is saving people from themselves. I say this facetiously. People are not stupid; they just tend to take the path of least resistance. People like to spend, not save. People like to eat junk food, not fresh fruits and green leafy vegetables.
By adding incentives, by creating disincentives, by reducing fraud and waste, and by reducing obesity and related health-care costs would we not be making an impact on the entitlement philosophy that seems so pervasive and corrosive to the American dream? Are we the Land of Opportunity or the Land of Entitlement?
Think about this. With the soaring deficit and general uncertainty surrounding the U.S. economy, businesses are sitting on record amounts of cash (Why should they expand until the horizon is clearer?).
Washington, D.C., and many state capitals still don’t get it: Taxes don’t stimulate an economy; taxes are the byproduct of a stimulated economy, one that begins with the certainty of lower taxes, deficit reduction, growth opportunities and a willingness to tackle tough problems.
With entitlement reform, businesses will be more confident to spend, expand and create new jobs.
Obviously, it is not quite so simple, but with entitlement reform would come a reduction in deficit spending, thereby unleashing unspent capital. Jobs would again appear. America as the land of opportunity for those willing to work hard would be restored. Americans who are hurting or destitute would still be helped but no longer enabled or entitled. America is not for slackers; we are kind-hearted doers. Let’s get to it.
Thomas B. Wheeler of Duluth is president of Wheeler Associates, an independent, family-owned employee-benefit and financial-planning firm.