Posts tagged with: welfare

Blog author: jballor
Friday, January 6, 2012
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In last week’s Acton Commentary, “Food Fights and Free Enterprise,” I take a look at the food truck phenomenon in US cities, sometimes called a “craze.”

In the companion blog post, “Food Trucks and First Steps,” I refer to Milton Friedman’s observation that there is a difference between being pro-market and pro-business. Art Carden has more on this over at Forbes.

As I note in the piece, the fight over food trucks is not just the stuff of big cities. The Carolina Journal has been following for some time the various dimensions of the political fights over food trucks in North Carolina, in both Raleigh and around the state.

One of the pieces of particular interest shows how political lobbyists for established businesses, in this case restaurants, can use legislation and regulations to squeeze out competition. But as Sara Burrows writes in “Regulations Hinder Food Truck Ministries,” these actions have negative impacts on faith ministries that would otherwise be helping to put people to work and getting them off the government aid rolls.

As Pastor Michael King says,

“But it’s obvious there is not a will in government to help the folks that don’t have jobs to create their own jobs,” he said. “They talk about wanting to create jobs. But it appears the folks they’re concerned about are only those who can go to the bank and borrow a bunch of money and put money in the ground.

“We don’t want them to be on government assistance,” he continued. “But the government is putting these rules in place and forcing the people to go on government assistance. How are you going to bring down government spending if you are putting rules in place so even if people want to create a job for themselves, they can’t?”

Acton’s tireless director of research Samuel Gregg has a post up at NRO’s The Corner in reaction to yesterday’s bad poverty numbers (46.2 million Americans live below the poverty line now—2.6 million more than last year). Gregg is ultimately not surprised about the increase, because not only does the American welfare state produce long term dependence on governmental support, but the huge debt incurred by poverty programs tends to slow economic growth.

It is now surely clear that the trillions of dollars expended on welfare programs since the not-so-glorious days of the 1960s have not apparently made much of a dent in significantly changing the ratio of Americans in poverty.

In some instances, America’s welfare apparatus may have prevented some people (especially the elderly) from falling into abject poverty. There is, however, very little evidence that it has helped millions of people out of relative poverty. There is also plenty of data to indicate that many welfare programs have produced intergenerational dependency on the state—a point that even Bill Clinton seemed to have grasped by the mid-1990s.

Gregg then warns against the temptation to double down on government-as-the-answer, arguing that we don’t have the fiscal leeway to experiment as we did in the 1960s.

We need to keep these serious failures of America’s welfare state in mind because these new poverty numbers will almost certainly be used as an argument by some people of good will (as well as those whose motives are far less noble) to resist any reductions in welfare spending, despite America’s far-from-healthy debt and deficit situation. Yet the sheer size of government spending on entitlement programs (by far the biggest item in the federal government’s budget) makes cuts in these areas inescapable if—I repeat, if—our political masters are serious about wanting to balance the government’s books.

Indeed, such cuts are assuming an ever-increasing urgency in light of the studies which continue to appear indicating that crushing levels of public and government debt run the risk of significantly impeding growth. That’s worrying, not least because a slowdown in growth will hurt those in poverty far more than the wealthy. Strong growth rates are one of the most powerful antidotes to poverty – just ask anyone living in mainland China or India. More welfare spending is simply not the answer.

Full post here.

Does the Circle of Protection  actually help the poor? What may be surprising to many of those who are advocating for the protection of just about any welfare program is that these may not alleviate poverty but only redistribute wealth. Rev. Sirico explained in an interview  with the National Catholic Register how the discussion should be about wealth creation, not wealth redistribution:

Father Robert Sirico, president of the Acton Institute, a conservative think tank based in Grand Rapids, Mich., suggested the Christian activists may not be aware “of the root causes of poverty and wealth.”

“Their statements are all about redistribution of wealth with almost nothing about wealth creation through production and labor,” he said.

Rev. Sirico later articulates that the issue isn’t simply about whether we should care for the poor and vulnerable, but more to point how we should care for the poor and vulnerable. What may surprise the Circle of Protection activists is the programs they seek to protect trap the poor in poverty instead of lifting them out:

“Any Christian would agree that we should put the poor and vulnerable first. The question is how,” noted Father Sirico.

He argued that taxes on the middle class destroyed its ability to grow the economy and to generate surpluses that can be used to assist the poor or to create new jobs.

“Redistributing wealth is the way to keep the poor in poverty. The way to lift them out of poverty is with jobs,” said Father Sirico, who added that he did not mean government jobs, but rather jobs generated through wealth creation in the private sector.

Click here to read the entire article.

A commentary by Acton Research Director Samuel Gregg titled “Deficit Denial, American Style” which was published in Acton News & Commentary on March 9th appeared today in the Detroit News as “It’s time to curb welfare growth” and was also picked up by RealClearPolitics. Gregg provides an enlightening examination on the growth of the welfare system, and with our current budget problems, the need to also reform it:

If, however, the results of a much-discussed Wall St Journal-NBC News poll released on March 2 indicate what Americans really think about fiscal issues, then much of the country is clearly in denial – i.e., refusing to acknowledge truth – about what America needs to do if it doesn’t want to go the way of many Western European nations.

While the poll reveals considerable concern about government debt, it also underscores how unwilling many Americans are to reduce those welfare programs that, in the long-term, are central to the deficit-problem.

Here are the raw facts. America’s federal social security program has become the largest government pension scheme in the world in terms of sheer dollars. It is also by far the federal budget’s single greatest expenditure item.

According to the Office of Management and Budget, “human services” ― Social Security; Medicare; Health-expenditures; Education, Training, Employment, and Social Services; Veterans benefits; and the euphemistically-named “Income Security” (i.e., unemployment-benefits) ― were consuming 4 percent of America’s GDP in 1949. By 1976, this figure had increased to 11.7 percent. In 2009, it was consuming 15.3 percent of GDP.

During the same period, human services began consuming a steadily-increasing size of federal government expenditures. In 1967, human services spending was 32.6 percent of the federal budget. By 2009, this figure had increased to 61.3 percent. It is predicted to rise to 67 percent by 2016. In 2010, 75 percent of human services spending was on Social Security, Medicare, and Income Security ― in short, the core welfare state.

These disturbing numbers make it clear any serious federal deficit reduction must involve spending-cuts to federal welfare programs. That doesn’t mean other areas of government-spending should be immune from cuts. But the deficit simply can’t be properly addressed without a serious willingness to reduce welfare-expenditures.

The original Acton commentary by Samuel Gregg can be read in full here.

The Acton Commentary this week from my friend John Teevan compares church budgets to government budgets, and what “government thinking” might look like if it were reflected in charitable and ecclesiastical budgeting. He writes, “If we think the government is the best source of compassion for the needy and the engine of economic growth, then it makes sense to set taxes at high rates so the government can do all good things for the people.”

On that point, over at Evangelical Perspective Collin Brendemuehl asks some salient questions in comparing government welfare to private charity.

Is the government 50% efficient? 75% efficient? I can’t venture a guess. But apparently neither can the bureaucrats. But even so, is it a stretch to say that the government is more than likely much less efficient than these charities? Not a tough one, really. Though government has the advantage of being in tough with society on a broader scale, it is also much less capable at targeting specific needs in a short amount of time. Anyone remember how fast Feed the Children and others got into New Orleans ahead of government? They were there faster, with just as much material, and actually met needs. (They did not randomly hand out $2,000 debit cards without accounting.)

Now that’s not to say that efficiency is the only valid factor to consider when evaluating charities or government programs. But it is an important factor and has to do with meeting one’s obligations as a steward of other people’s money or property. It’s in this sense that, as Collin writes, “Government is a servant. At least it ought to be.”

On the question of giving to charities and churches, D. G. Hart has raised this question of extra-ecclesiastical giving in a couple of posts over at Old Life. My final commentary of 2010 made the point that “Christian Giving Begins with the Local Church.” But as I said in a follow-up post over at Mere Comments, I don’t think Christian giving ends there. I wonder why Hart has focused so much on The Gospel Coalition, Desiring God, and Redeemer City to City in particular. It seems his critique would apply equally as well to other organizations like the Alliance of Confessing Evangelicals and Ligonier Ministries.

There’s a story that I heard, of a miner, a family down in– it was in the Appalachia area and the church there really thought that they were doing a great deal because they would go in, they said they would pick the poorest families and they would take them Christmas gifts and turkeys and that sort of thing. So they did. They went to this family and they presented them with all the gifts and gave them to them and all the children had gifts; they had a hot meal on the table. The church was so pleased with what they had done, and then they left. And the husband just broke down and cried because he said, “You mean in this community, we are thought of as the poorest family in the community?” The shame that came with that, with the charity that had been given so lovingly out of the best of intentions, but it absolutely shamed him and it destroyed his life. I heard it from his son. He said, “It destroyed my father because he said he was so shamed in front of the rest of the community because they didn’t think that he was a person of worth that they had to take care of his family for him.”

C. Neal Johnson, from an Interview Oct. 8 at a Partners Worldwide Conference in Grand Rapids.

In a recent article in World magazine, Acton senior fellow Marvin Olasky urged evangelical minister Jim Wallis to drop the pretense of being post-partisan. Olasky, World magazine’s editor-in-chief, went on to assert that (1) Wallis’s organization, Sojourners, received money from the foundation of secular-leftist George Soros, and that (2) Wallis had lent the Sojourners mailing list to the Obama campaign.

In an interview here, Wallis appears to deny these charges. But now former Acton research fellow Jay Richards has followed up with some additional findings in a new piece at NRO. The findings strongly support Olasky’s claims, and make it all the more unclear why Wallis would respond to them by denying them and calling Olasky a professional liar.

Richards has been keeping tabs on Wallis for a while now. In an October 2005 review of God’s Politics, Richards shows how Wallis sits squarely on the left and has even capitulated to the secular left on key social issues. The book review also examines Wallis’s questionable biblical exegesis as well as some of the economic fallacies that drive much of Wallis’s political thinking.

Wallis may mean well, but the big-government policies he advocates have been a wrecking ball to the very communities he seeks to help. An Acton/Coldwater video short examines why the left’s approach to poverty alleviation has done so much harm. It’s called How not to Help the Poor.

Simon Johnson and Peter Boone wrote an interesting article the UK Telegraph Saturday called “The New Feudal Overlords of Europe will be the bankers of the ECB.”
Johnson is also the co-author along with James Kwak of a thoughtful and provocative book 13 Bankers as well as a blog on economics. Also on the ECB see my colleague Sam Gregg’s Piece at Public Discourse

Using Hayek’s famous phrase “The Road to Serfdom” Johnson and Boone argue the demise of Europe will not be the welfare state and the growth of government as Hayek predicted, but rather a “financial elite gone awry” They write:

Hayek had the sign and the destination right, but was wrong about the mechanism. Unregulated finance, the ideology of unfettered free markets, and state capture by corporate interests are what ended up undermining democracy both in North America and in Europe. All industrialised countries are at risk, but it’s the eurozone – with its vulnerable structures – that points most clearly to our potentially unpleasant collective futures.

As a result of the continuing euro crisis, the European Central Bank (ECB) now finds itself buying up the debt of all the weaker eurozone governments, making it the – perhaps unwittingly – feudal boss of Europe. In the coming years, the ECB and the European Union will dictate policy. The policy elite who run these structures – along with their allies in the private sector – are your new overlords

It is arguable who exactly are the peasants, the vassals and the lords under this model – and what services will end up being exchanged, but there is no question we are seeing a sea change in the post-war system of property, power and prosperity across Western Europe, just as Hayek feared. An overwhelming debt burden will bring down even the proudest people.

The ECB-EU approach will not return countries to reasonable levels of growth – the debt overhang is simply too large. The southern and western periphery of the eurozone cannot grow out of their debts under these arrangements and so will stumble from stabilisation programme to stabilisation programme – as did Latin America in the 1980s. This is bound to lead to hostile politics, social unrest and more economic crises.

The debt crisis must be addressed and I don’t disagree with their assertion that corporate-government collusion is a serious problem (See my article on Davos Capitalism) though I am unclear on how “Unregulated finance, the ideology of unfettered free markets, and state capture by corporate interests” exactly go together, or what they mean by “unfettered free markets.” Since Johnson and Kwak argue in 13 Bankers that we’ve had a type of oligarchic capitalism and Johnson and Boone matter of factly talk about “welfare socialism” I assume they aren’t arguing that the Europe or the US have had laissez faire free markets over the last decades, so I am not exactly sure what they mean. But on to their main points.

Johnson and Boone argue that current debt levels and the lack of political will to do anything about it will end up wreaking havoc on EU countries and ultimately on the US and the world.

The UK and US need to prepare themselves for more storms. The United States will be in the pleasant position as the world’s safe haven, but this will only encourage America’s profligate politicians to spend more and build more debt.

The UK will bear much more pain from euro devaluation and financial dislocation, all exacerbated by its own large deficit and debts. We might well see one more invasion across the channel, this time by bond vigilantes who question Britain’s ability to rein in inflation as it builds too large debts.

At the end of this great tumult, Europe and the UK will have sound fiscal regimes. Debt will be defaulted on or inflated away, and nations will have dramatically cut spending.

Hayek’s predicted demise of western society as he knew it will prove correct, but welfare socialism will prove the victim, erased by a political and financial elite gone awry.

Interesting and worrying stuff and the article is well worth reading as is 13 Bankers. But one thing the authors seem to ignore in this piece is that while welfare socialism may be the victim of the collapse (not a bad thing in my estimation), it is fully a culprit as well.

It is precisely a massive welfare state that is a part of the problem. It not only requires outlandish and unsustainable spending on the parts of governments who are afraid to address the challenge lest they lose popular support. But it also encourages a culture of irresponsibility, and inculcates a sentiment in the population that you can maintain an pleasant middle class life indefinitely without actually having to produce goods and services that people want and need. They suggest several austere measures as a solution but doubt the political will to achieve it. What may be really needed is a complete rethinking of the role of government and the whole idea of the current welfare state. That would not only require political courage, but cultural rejuvenation and this is something neither politicians nor bankers can provide.

A few weeks ago Hunter Baker posted some thoughts on secularism and poverty, in which he wrote of the common notion that since private charity, particularly church-based care, had failed to end poverty, it seems only prudent to let the government have its chance.

Hunter points out some of the critically important elements in creating a culture of prosperity and abundance, what Micah Watson calls “cultural capital.”

But it’s worth examining in more detail the point of departure, that is, considering the relationship between the church’s approach to charity and the creation of the welfare state. Lester DeKoster and Gerard Berghoef write of this in a brief essay contained in their book, The Deacons Handbook: A Manual of Stewardship, first published in 1980.

DeKoster and Berghoef argue in “The Church and the Welfare State” that “The Church is largely responsible for the coming of the modern welfare community.” But they also contend that the diaconal office is the key to answering the challenge posed by the welfare state: “The Church could be largely responsible for purging welfare of its faults and problems. IF enough deacons caught the vision!”

The church helped to bring about the welfare state in two ways. First, the Church embodied the idea of loving self-sacrifice in service of others. “The Word which the Church proclaims demands charity and justice for the poor. As this Word has permeated at least the Western world, an alerted public conscience has demanded public welfare,” write DeKoster and Berghoef. “The Church is the parent of the welfare community.”

But this “welfare community” became secularized when the Church “did not, and perhaps in some respects could not, measure up to her own ideals. Not all the starving were fed, not all of the homeless given shelter, not all of the oppressed and exploited relieved. The cries of the needy ascended to heaven. The Lord answered with the welfare state. The government undertakes to do what the Church demands and then fails to achieve by herself.”

In this sense, the welfare state is understood to be God’s preservational (thus imperfect) answer to the failed duty of the Church:

Thus the Church is, both by commission and by omission, author of the welfare state. Deacons start from here. Government has undertaken to do what conscience, tutored out of the Scriptures, demands but fails, through the Church, entirely to achieve.

In the brief essay Berghoef and DeKoster go on to outline some practical steps that can be taken to address this failing and rein in the scope of governmental responsibility. Some of these specifics need updating given what has happened in the United States over the last thirty years. But the vision of The Deacons Handbook, that the core of the answer lies in the diaconate, is a worthy and compelling insight.

Hunter will be pleased to note that among the practical advice given by Berghoef and DeKoster is that the meaning of the First Amendment needs to be reconsidered. Their advice for the deacon? “Do a study of what is so readily called ‘the separation of Church and state’.” This aligns with the argument Hunter makes in his new book, The End of Secularism.

This much remains true:

What is important, with an eye on tomorrow, is to discern what constructive relations may be developed between alert diaconates and public welfare. And it is immediately obvious that diaconates are uniquely qualified to amend what are commonly perceived as defects in the welfare system.

Check out an excerpt from the original edition of The Deacons Handbook containing the essay, “The Church and the Welfare State.” And sign up over at Christian’s Library Press to keep informed about upcoming releases in 2010, including new editions of The Deacons Handbook, The Elders Handbook, and more.

Deacons Handbook Excerpt

Mark Tooley pens another brilliant critique of the latest endeavors of the religious left in this piece titled “God’s Welfare State” in FrontPage Magazine. The commentary is a response marked with reason and clarity to left-leaning interfaith groups who are calling for more government programs and initiatives to tackle poverty. Tooley also notes in his piece that the signers of the letter calling for Senator John McCain and Senator Barack Obama to address their party conventions with a ten year plan to end poverty, are the usual suspects who equate “The federal welfare state with God’s Kingdom.” Tooley always seems to have a knack at getting to the heart of the issue, and he concludes by simply noting:

The left-leaning religious officials, guided by 100 years of statist Social Gospel, want to wage a government-led coercive struggle against “poverty” in the abstract. But most of their religious traditions express God’s love for specific poor people, while emphasizing voluntary and relational charity towards the needy. This historic stance of these religions towards the poor understandably has less appeal to the Religious Left, which often is more preoccupied with political power than with concrete compassion.