Politics & Policy

Uncle Sam as Santa

America’s entitlements problem

The “government of the United States of America has become an entitlements machine,” Nicholas Eberstadt writes in A Nation of Takers: America’s Entitlement Epidemic. “As a day-to-day operation, the U.S. government devotes more attention and resources to the public transfers of money, goods, and services to individual citizens than to any other objective; and for the federal government, more to these ends than to any other purposes combined,” he underscores. Eberstadt, a demographer at the American Enterprise Institute, talks about the book and our entitlement culture with National Review Online’s Kathryn Jean Lopez.

 

KATHRYN JEAN LOPEZ: At what point did we become a nation of takers?

NICHOLAS EBERSTADT: It’s a work in progress, for better or worse. The sort of statistics I present in my little book help to illuminate the underlying trends.

According to the Census Bureau, as of spring 2011 (the latest data available at this writing) nearly half — i.e., 49 percent — of Americans lived in households accepting at least one public entitlement benefit. That would have been about 150 million Americans.

We think of Social Security and Medicare — our social guarantees for senior citizens — as being the country’s main entitlement vehicles. In purely financial terms, these are certainly America’s two biggest entitlement programs: Taken together, Medicare and the Social Security pension fund account for roughly half of the almost $2.4 trillion in transfers the government handed out this past year. But of the 150 million Americans who were on entitlements, only 50 million were Social Security pension recipients.

So who were all the rest? Well, about 100 million American entitlement recipients were not on Social Security. Two-thirds of Americans getting entitlement benefits today, in other words, are not senior citizens, and are not living in households that included Social Security beneficiaries.

The overwhelming majority of Americans who use public benefit programs these days are getting “means tested” benefits, poverty-justified benefits: Medicaid, food stamps, WIC, TANF, and all the rest. One American in three now lives in a “means tested” home.

And remember, those benefits don’t just get sent out: You have to apply for them. Never before have so many able-bodied and (at least by any historical benchmark) relatively well-to-do Americans pled poverty for the purpose of getting a handout from Uncle Sam.

These patterns, I would submit, speak to a profound, even radical, change in mentality in the United States. That’s why I called my book Nation of Takers.

 

LOPEZ: Does this mean that Mitt Romney was essentially right about his “47 percent” assessment?

EBERSTADT: Romney’s hapless “47 percent” soliloquy has taken on a life of its own, entirely apart from the context in which he was using it. That’s the best I can say in his defense.

As an exposition of the entitlements problem, his words were both a muddle and a mangle.

First of all: Just about every American adult pays taxes — if not income taxes, then payroll taxes, or property taxes, or sales taxes, or some other taxes. We have a lot of taxes in this country.

The argument about income taxes is very different from the argument about entitlements. Income taxes are intended to finance the federal government — you know, the folks the Constitution charges with protecting us against “enemies foreign and domestic.” Shouldn’t everyone in our country contribute to the federal taxes that support (among other things) our national defense? Even, say, just ten dollars?

The problem with exempting almost half of America from income taxes is first and foremost a problem of citizenship — a failure of our conception of civic duty. Our entitlement epidemic also, in my view, entails a failure in our conception of citizenship and civic duty — but that one is a completely separate fight.

Unfortunately, by conflating the two, Romney actually made it more difficult for all the rest of us to talk about America’s entitlement problem. He provided opponents of entitlement reform with an incredible gift: Since that gaffe, debaters can shut down discussion of the entitlements problem with a mocking invocation of the “47 percent” line.

 

LOPEZ: What is happening to our men? How has this happened?

EBERSTADT: As the entitlements revolution has unfolded, America has witnessed a mass flight from work by adult men. This is one of the most important untold stories in modern America.

In the year 2010, in the worst job market in memory for most Americans, the gap between the number of men over 20 looking for work and those who had work amounted to 6.5 percentage points. That’s what a really scary unemployment situation looks like, in terms of labor-force participation rates.

Now consider this: Between 1948 and 2008 — in the period before the recent crash — the labor-force participation rate for adult men fell steadily, by a cumulative total of about 13 percentage points. In other words, the long-term drop in the share of adult men working, or looking for work, was twice as great as the “employment gap” for those still looking for work in 2010.

Clearly there are a host of factors involved in a social sea-change like this. The rise of the entitlement state is only one of them. But it is an important one. And the reflexive “structuralist” response that jobs just weren’t there looks less compelling when you consider female labor-force participation over those same decades: Those rates jumped by almost ten points between 1978 and 2008 — and by about 30 points over the whole post-war era.

 

LOPEZ: What is the “disability” boom about?

EBERSTADT: Quite simply, collecting disability pay from the government has become a way of life in America — a new alternative to former, more traditional employment paths.

Disability has “gone viral” in modern America. In 2011, according to the Department of Health and Human Services, over 12 million working-age Americans — men and women between the ages of 18 and 65 — were accepting benefits from at least one government disability program. That is a larger total than the entire paid workforce of the U.S. manufacturing sector that same year!

The disability safety net is there for people who truly need it. Yet over the past two generations, we have seen an exponential increase in claims against this system — and claims are higher today than ever before, even though America’s working-age population, by many objective measures, has never been healthier than it is right now.

The government has yet to do a serious, comprehensive audit of its disability programs. Absent such inspection, we have no hard data on the scale of fraud and abuse in our modern disability programs. But you don’t need the audit to be aware that there is some troubling measure of “gaming” in that system today — and you don’t need to be Alexis de Tocqueville to see that this gaming has a corrosive impact on our civil society, requiring as it does a broader involvement of (say) health-care professionals, judicial officers, and others as accomplices.

 

LOPEZ: We spend three dollars on entitlements for every one dollar on defense? What’s wrong with that? Most Americans have no ties to the military anyway.

EBERSTADT: Every single American has a tie to the military! We’d have no country without it. I’d call that a pretty direct tie, wouldn’t you?

But the bond to national defense is more than just a pragmatic tie: It is a constitutional charge. The first enumerated responsibility of our president, in fact, is that of commander-in-chief. By contrast, so far as I can tell, there is nothing in the Constitution that instructs our government to pursue entitlement programs.

America’s entitlement spending came to exceed defense spending during the Vietnam War, back in the year 1971. By 2010 we were doling out fully three times as much for entitlements as for national defense. But current trends portend even greater disparities in the future: Entitlements seem to be heading only up, while spending on the Iraq and Afghanistan efforts is winding down. Even before the “sequestration” drama, we were heading for a future with outlays four times greater for entitlements.

The problem with such lopsided disbursements is not aesthetic. The problem, rather, is that the careening growth of entitlements has actually started to “crowd out” defense.

We are hearing a growing chorus of voices claim that our defense posture is “unaffordable.”

Really? As in: “unaffordable” for the richest society in human history?

Please remember: We are allocating barely half as much of our GDP today to defense as we did under President Kennedy.

Our current defense monies may be wisely spent, or not — this is another question altogether. But we can argue that our defense posture today is “unaffordable” only if we hold entitlements sacrosanct. Can you imagine what our Founders would have thought if they had known that future generations would presume to fashion our national defense on the basis of leftovers, after we had sated our entitlements appetite?

LOPEZ: What are the hard facts that Republicans need to face? Do their transgressions put them in a better or worse position to work with Democrats?

EBERSTADT: The ugly little truth is that Republicans are very much a part of America’s entitlement problem. The compromised and corrupted Washington Republicans have been totally complicit in bringing us to the juncture where we find ourselves today.

Want to know a fun fact? Over the half century between 1960 and 2010, entitlement spending tended to go up faster when Republicans were in the White House — substantially faster. Entitlement spending positively soared during the Nixon, Ford, and George W. Bush administrations, lest anyone forget.

Here’s another fun fact: In the 2008 election, about two-thirds of the most entitlement-dependent counties in America went for McCain, not Obama. (That is to say: the 100 counties with the highest share of entitlement income in overall personal income.)

The Democrats have the reputation of being the Party of Entitlements. Fair enough. But the entitlement problem is completely bipartisan. With a few honorable individual exceptions, Republicans in Washington have been hard at work protecting and expanding the entitlement state, too.

In that sense, I would submit that Republicans in Congress are generally all too well-placed to “work with” Democrats on entitlements.

It’s not just that the Republicans haven’t “walked the walk” of the limited-government party they claim to be: They haven’t even talked the talk. If they had done so over the past few decades, the basic facts about the entitlements epidemic would already be common knowledge; quite obviously, this is not the case.

 

LOPEZ: Do you have hope for reform given the current make-up of Washington?

EBERSTADT: I’d put the chances of meaningful entitlement reform in the upcoming Congress in the slim-to-none range. It belabors the obvious to observe that the White House isn’t interested in it. But there isn’t any evident appetite for it on Capitol Hill, either. In fact, practically everyone in elected office in D.C. appears to be just shy of terrified by the prospect of entitlement reform.

You can see why. At this stage in the disease, the federal government has more or less become an entitlements machine — two out of every three federal dollars spent go to entitlement transfers. So the business of Washington is, mainly, dispensing entitlements. And, as noted already, something on the order of 50 percent of Americans today live in homes that get one or more government entitlements: That’s a pretty formidable-looking potential constituency group, wouldn’t you say?

But the cast of characters in D.C. is not, at the end of the day, the determinative ingredient in entitlement reform. Elected representatives respond to the voters. And voters today are fundamentally uninformed about the threats our entitlement systems pose to our country. Admittedly, we are not getting a whole lot of help from our leaders on this score — that is one reason I thought it might be useful to produce a brief, easily read book on the subject.

 

LOPEZ: We are so far beyond concerns about having a safety net, aren’t we? How do we make sure, though, in working toward reform, that no one who legitimately needs help lacks it?

EBERSTADT: As of last year, our government was dispensing almost $2.4 trillion a year in entitlements — over $7,400 per man, woman, and child in our country per annum; over $30,000 per year for a notional household of four. And that is just the net transfer: Those totals don’t include the administrative costs of the programs.

I won’t make any claims about the efficacy of that spending, or its completeness of coverage for the truly needy — but it is pretty hard to look at those numbers and think the main problem in our entitlement universe today is under-spending.

By the way: Left out of all this discussion of government safety nets is the hundreds of billions of dollars in charitable giving that ordinary Americans voluntarily contribute each year to non-profit organizations, including social-service providers. The civil-society safety net is immensely important in America — shouldn’t we recognize, protect, and celebrate it?

 

LOPEZ: Why did you dedicate your book to Daniel Patrick Moynihan?

EBERSTADT: DPM was a great man — an extraordinary public intellectual in politics. I had the privilege of learning from him. I served as a “section man” in his Harvard course Soc Sci 118, “Social Science and Social Policy,” the year he successfully ran for Senate in New York. In my experience he was always interested in ideas, and in new facts — even when these seemed to challenge received wisdom, or, for that matter, his preferred outcomes. He was unfailingly kind, considerate, and generous to me — and to the many others of my ilk whose lives he touched. I admired him enormously, and still do.

That’s the personal connection. Leave that aside, though: Moynihan was the most knowledgeable and acute voice on the American welfare-and-dependence conundrum in his day — and he understood the difference between poverty and dependence in his bones. We could do with someone with only half his acumen in the public square these days.

 

LOPEZ: What’s the most shocking fact in A Nation of Takers?

EBERSTADT: If I had to pick one fact that shocked me? How about this: The share of men today who are totally out of the work force — i.e., neither working nor looking for work — is over twice as high for Americans in their late 30s as for their counterparts . . . in Greece. In fact, the share of men in this prime work age who have opted out of the work system altogether is higher in the U.S. than in just about any welfare state in Western Europe.

We in the U.S. tend to marvel at the Europeans’ five-week annual vacations — but the sad truth is that a remarkable number of American men are taking 52-week vacations each year.

 

LOPEZ: What’s the most hopeful fact in A Nation of Takers?

EBERSTADT: That it’s not an obituary. We Americans are in Christmas Present right now — not Christmas Future. We can still turn things around — if we have the mettle for it. And we can even do so before crisis or disaster eliminates all other options.

 

LOPEZ: Tell me about Nortax. Who came up with the idea, and if an eight-year-old can come to understand the entitlement crisis, why can’t Washington seem to?

EBERSTADT: Oh, yeah! It’s a fun little video cartoon, you can see it on YouTube.

It seems to have developed a little cult following . . . My colleagues at AEI came up with this Seuss send-up, based on my book. I’ll leave it to viewers to decide whether their elected officials should see this. As for Dr. Seuss, I fear it may have him spinning in his urn . . . 

— Kathryn Jean Lopez is editor-at-large of National Review Online. This column is available exclusively through Andrews McMeel Universal’s Newspaper Enterprise Association.

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