Government ‘Charity:’ Unwarranted and Unsustainable

By Harold Brown

Harold Brown, Senior Fellow, Georgia Public Policy Foundation

Harold Brown, Senior Fellow, Georgia Public Policy Foundation

Charity is from the noblest of impulses. But it must come from the heart; governments can’t do it. Most democratic governments have representatives who feel it, but charity can’t be built on taxes. Charity is not giving away someone else’s goods.

The two main problems with the government urge to care for the needs of its citizens are making it fair and knowing when to quit.

It is bad enough to pay taxes to the federal government to fix roads, airports, foreign dictators and commerce. The ever-increasing use of tax dollars to give as cash or benefits to individuals is enough to push us over the psychological (and fiscal) edge. It isn’t as if we (they) don’t need it; we all need more cash (need and desire are mixed motives).

The transfer of money from those who earn it to those who need (want) it should be leveling off or decreasing in an affluent American society. Instead, the more society has, the more the taking escalates. During the World War II years, payments to individuals were less than 5 percent of total federal outlays. By the 1990s, the amount had increased steadily to around 50 percent; by 2014, it totaled a whopping 70 percent of total federal outlays.

Is it because there is more need for money from the government today than there was in mid-20th century? No. In fact, it is because the expectation that government supply our needs has grown even as living conditions at every level of society have improved dramatically.

At the beginning of World War II, no family in Georgia had a TV or a computer. Only half the families had a radio. Three-fourths of families cooked their meals on stoves heated with wood or coal. Today virtually all families have TVs, telephones, too much food and the best medicine ever. Still the populace craves guarantees of income, food, education, medicine, housing and all of the corollaries.

The unfortunate result is that payments to and for individuals have grown in good times and bad. (If one can call the past six or seven years “bad” times.) The total paid for what the U.S. Bureau of Economic Analysis calls “government social benefits” increased from just over $1 trillion in 2000 to $2.5 trillion in 2014. That is $7,800 for every man, woman, and child in the United States. More to the point: It’s an average of $38,000 for every U.S. income tax filer last year.

The total federal outlay for individual health care (Medicare, Medicaid, Defense health, Veterans health care, federal employee health benefits, etc.) in 2014 exceeded $1 trillion for the first time. That’s over two and a half times the total in 2000 and a whopping 100 times what it was in the late 1960s.

Food and nutrition payments have more than tripled since 2000 – in an era when we eat too much, not because people go hungry. “Income security” payments have more than doubled since 2000. The payments reached $509 billion in 2014, up 70 percent since 2008.

This increase of payments to individuals can’t be justified by the “great recession.” Households in the lowest quintile (20 percent) of income experienced a 6 percent decrease in income before taxes when the “great recession” hit in 2008; their expenditures went down by a similar amount. Households of all other income levels suffered even smaller decreases of income and expenditures.

This “great recession” shouldn’t be compared to the Great Depression of the 1930s. Yet it was enough to increase calls for more cash assistance to those deemed to be in need. In the past five years, federal payment for “public assistance, supplemental security income and food stamps” has increased 45 percent over the previous five years.

To use a currently popular environmental negative, this spending is unsustainable! We cannot continue this rate of increased government spending on individuals while we enjoy the greatest standard of living ever. The federal debt has tripled from $6 trillion to $18 trillion in the first 14 years of this century.

There’s one way to avoid a modern Greek tragedy: Reduce dependence on government. The first requirement? Stop encouraging dependence. And the way to do that, as the Georgia Public Policy Foundation’s Kelly McCutchen pointed out recently, is by restoring the dignity of work.

University of Georgia Professor Emeritus Harold Brown is a Senior Fellow with the Georgia Public Policy Foundation and author of “The Greening of Georgia: The Improvement of the Environment in the Twentieth Century.” The Georgia Public Policy Foundation is an independent think tank that proposes market-oriented approaches to public policy to improve the lives of Georgians. Nothing written here is to be construed as necessarily reflecting the views of the Georgia Public Policy Foundation or as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature.

© Georgia Public Policy Foundation (July 31, 2015). Permission to reprint in whole or in part is hereby granted, provided the author and his affiliations are cited.

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