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Entitlements are Bankrupting America. But the Rich Keep Taking Them.

Paul Buchheit

Because of irresponsible reporting by conservative sources, many Americans have been led to believe that social programs are bankrupting our nation. The mainstream media fawningly concurs, with statements like this from USA Today: "The massive deficits...[and] chronic underfunding...are largely the result of Washington's habit of committing too much money to benefit programs." States are now beginning to attack imagined safety net abuses, such as the use of food stamp funds to pay for fortune tellers and pleasure cruises.

But hungry people rarely waste their modest benefits, and most are eager to work to support their households. Almost three-quarters of those enrolled in food stamps and other social programs are members of working families. And according to the U.S. Department of Agriculture, only 1 cent of every SNAP dollar is used fraudulently.

The real threat is the array of entitlements demanded by the very rich. As they get richer, they're gradually bankrupting the greater part of America, the middle and lower classes. The following annual numbers may help to put our country's expenses and benefits in perspective.

The Safety Net: $370 Billion

The 2014 safety net (non-medical) included the Supplemental Nutrition Assistance Program (SNAP), WIC (Women, Infants, Children), Child Nutrition, Earned Income Tax Credit, Supplemental Security Income, Temporary Assistance for Needy Families, Education & Training, and Housing. These few programs, collectively termed "welfare" by those fortunate enough to survive without them, amount to a lot less than the $1 trillion per year publicized by the conservative press.

Social Security: $863 Billion

The threat of "entitlement," in the case of Social Security, is more properly defined as an "earned benefit." Social Security is the major source of income for most of the elderly, who have paid for it. As of 2010, according to the Urban Institute, the average two-earner couple making average wages throughout their lifetimes receive less in Social Security benefits than they paid in.

Tax Avoidance: $2,200 Billion

That's $2.2 trillion in tax expenditures, tax underpayments, tax havens, and corporate nonpayment. It is estimated that two-thirds of tax breaks accrue to the top quintile of taxpayers.

Investment Gains: $5,000 Billion

That's $5 trillion dollars a year, the annual amount gained in U.S. wealth from the end of 2008 to the middle of 2014. In the six years since the recession, for every $1 of safety net costs, $10 in new wealth went to the richest 10%.

Investment income welfare for the well-to-do appears in the form of capital gains tax breaks, which mean zero taxes on deferred investment gains, and zero taxes for most of the investment gains passed along to descendants.

Most Extreme: 14 Billionaires vs. 46 Million Hungry Americans

America's 14 richest individuals made more from their investments last year than the $80 billion provided for people in need of food.

Clearly, conservative sources don't tell us the full story. They dwell on the cost of the safety net, emphasizing its accumulating total over several years, while stubbornly ignoring the real problem.

The super-rich feel they deserve all the tax breaks and the accumulation of wealth from our nation's many years of productivity.

That's the true threat of entitlement.


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Paul Buchheit

Paul Buchheit

Paul Buchheit is an advocate for social and economic justice, and the author of numerous papers on economic inequality and cognitive science. He was recently named one of 300 Living Peace and Justice Leaders and Models. He is the author of "American Wars: Illusions and Realities" (2008) and "Disposable Americans: Extreme Capitalism and the Case for a Guaranteed Income" (2017). Contact email: paul (at) youdeservefacts.org.

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