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Archive for the ‘Government Handouts’ Category

Those Who can’t Speak English in Puerto Rico May Qualify for Social Security Disability

Posted by Steve Markowitz on April 14, 2015

We have to thank Liz for sending this grotesque example of government gone wild.

According to the washingtonpost.com the Social Security office may consider you disabled if you can’t speak English, which could make it more difficult to obtain a job.  Our grandparents who came to this Country from non-English speaking countries would be aghast and insulted by such a perverse use of the handout logic.

But it gets worse.  Can’t speak English in Puerto Rico, a territory that includes mainly Spanish speaking residence and you still might qualify for Social Security disability benefits.  According to the Post, between 2011 and 2014, 218 local Spanish speaking residents were granted Social Security disability benefits for their weakness in English.  Adding insult to injury, even skilled professionals in Puerto Rico can apply for the benefit.

This author wonders whether us short folks are deserving of some special assistance for our “disability”.  Think of all of professional sports opportunities we have been locked out of for this disability!


Posted in Government Handouts, Government Ineptness | Tagged: , , , , , , | 2 Comments »

A report issued to President Obama by his deputy Chief of Staff, Rob Nabors, indicates that a “corrosive culture” played a role in the VA debacle.

Posted by Steve Markowitz on June 30, 2014

The Veterans Affairs tragedy is another to add to the list of scandals that have occurred during the presidency of Barack Obama.  However, this scandal is the worst in that veterans died waiting for care while bureaucrats and government employees received bonuses for creating false reports.  People should go to jail for this tragedy, but that is unlikely.  A more likely outcome will be that a few government employees will be asked to retire on fat pensions or even continued pay, or moved to other position within the government.

In a report just issued to President Obama by his deputy Chief of Staff, Rob Nabors, indicates that a “corrosive culture” played a role in the VA debacle, also stating:

  • It is clear that there are significant and chronic systemic failures that must be addressed by the leadership at the VA.”
  • The department must take swift and appropriate accountability actions. There must be a recognition of how true accountability works.”
  • It currently acts with little transparency or accountability with regard to its management of the VA medical structure.”

The VA scandal was made public by a whistleblower at its Phoenix, Arizona facility who reported that the hospital kept a secret list where veterans needing treatment were purposely “lost” in the system.  At this Phoenix facility in excess of 1,700 veterans waiting to see a doctor were never scheduled for appointments.

The VA health system is largest in the country with over 1,700 facilities serving about 9,000,000 people annually.  This organization has over 300,000 full-time employees and a budget of over $150 billion annually.

The VA scandal is a prime example of the failure of big government, which raises an interesting question for Progressives who promote even more big government.  Is the VA debacle the result of inherent problems of a massive bureaucracy that makes government unable to properly manage the People’s business, or is it the result of an incompetent of CEO, Barack Obama?  Either answer being uncomfortable for those on the Left means that this important question will be avoided.

The reaction from President Obama was typical Leftist politics, asking for more money to fund a failed organization.  Obama has requested an increase in the 2015 VA budget of 6.5%.  History has proven that you cannot throw money at a failed organization and expect better results.  In fact it is money and greed that led to the “corrosive culture”.

It will be difficult for this President to ignore his responsibility in the VA tragedy and claim this to be another “phony scandal”.

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Growing Disability Claims Threaten US Financial Stability

Posted by Steve Markowitz on July 19, 2013

Given the problems in the Middle East, the Edward Snowden case, and of course the George Zimmerman trial, there has been little “space” left in the news for more mundane items such as economics and the economy.

We do not have to go back too many months to recall when there was serious concern over Europe’s sovereign debt, America’s deficits and the US sequestration spending cuts.  However, ignoring these issues does not indicate that the problems are resolved.

Michael Boskin, a Stanford University economics professor published an op-ed in the Wall Street Journal titled The 2016 Disability Insurance Time Bomb concerning the serious problem of America’s growing disability liability.  Boskin states:

  • In 1970 less than 3 million Americans collected disability payments from Social Security’s disability insurance program.  Today that number is nearly 11 million.
  • In 2012 the disability payments cost $140 billion, increasing eight times (adjusted for inflation) from 1970.
  • While the number of people receiving disability payments has skyrocketed, physically taxing jobs such as manufacturing, mining and agriculture have declined between one-third and three-fourths since 1970.
  • Boskin reports that the Social Security’s Disability Insurance Fund will run out of money by 2016 without significant changes or increases in taxes.
  • In the past 12 months approximately 1,000,000 newly disabled workers were added to the program.  This alone represents approximately a $300 billion total cost for these recipients’ benefits.

Boskin concludes that the number of people receiving disability has skyrocketed in part because of changes in the law made in 1984 by Congress that significantly broaden those eligible including back pain, arthritis, and increased mental illness coverage.  In addition, the government does not adequately supervise those receiving benefits.  As an example, in 2009 less than 1% of those on disability went back into the workforce or gave up benefits.  Disability insurance is being viewed in many cases an extension of other government and nongovernmental benefits.

States have also taken advantage of the federal government’s disability program.  Many shift their citizens from Medicaid and welfare onto disability insurance or Medicare, both of which are paid for by the federal government.

Social Security disability payments is another unfunded liability placed on future Americans.  Unlike the Greatest Generation that returned from World War II and created an economy that allowed their children to prosper, those children, the Baby Boomers, are stealing from their children and future generations so that they can live more comfortably today.  Narcissism and greed is an insidious affliction of society.  It will be interesting to see the reaction of younger Americans when they finally figure out what the Baby Boomers have done to their country and future.

Posted in Government Handouts, Government Waste | Tagged: , , , , | Leave a Comment »

Increased Use of Food Stamps Belies Recovery

Posted by Steve Markowitz on April 3, 2013

The Wall Street Journal reported on a significant increase in Americans use of food stamps. This brings in the question either the government’s reports/claims of the economies overall improvement or abuse of the food stamp benefit program.

According to the government’s figures, the recession officially ended four years ago.  If economic reality matched this claim it is reasonable to expect that the use of food stamps in America should be decreasing.  The opposite is occurring.

The food stamp program is officially called the Supplemental Nutrition Assistance Program.  The Journal published the following figures relating to the Program:

  • In the past four years the amount of food stamps given out has grown by 70% to nearly 48 million Americans.
  • Unemployment reached its zenith of 10% in late 2009.  Today it supposedly stands at 7.7%.
  • For 2012, approximately $75 billion was spent on food stamp benefits.  This is up from $30 billion in 2007.
  • In 1975, only 8% of Americans received food stamps.  During the next 25 years that level remained relatively constant, never exceeding 11% until 2009 when it spiked to 15%.

While the economic meltdown that began in 2007 played a role in the initial increase usage of food stamps, they have been other issues affecting this growth.  The welfare overhaul law of 1996 allowed states to ease asset and income tests for food stamp recipients.  The Obama administration pushed further on the easement allowing higher income levels as well as recipient savings to occur.  In addition, Obama’s 2009 Stimulus Package extended time eligibility for food stamp benefits.

It is not surprising that as the restrictions on eligibility decreased that the use of food stamps would increase.. The fact that this increase is continuing even during a period of supposed economic improvement indicates that either the economy is not improving as reported or users are taking advantage of the system.  This is but one result of Progressive meddling in society and the economy.  Add to this the abuse occurring in hundreds of other governmental programs and it is no wonder that our federal deficit is out-of-control.

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Government Squanders Huge Sums on Telephone Entitlement Subsidies

Posted by Steve Markowitz on February 13, 2013

The Wall Street Journal reported on another government boondoggle related to entitlement handouts.  According to the report the federal government paid out $2.2 billion in 2012 to provide telephones to Americans.

raining moneyThe telephone subsidy program began in 1984, yes under the Republican administration of Ronald Reagan.  The idea behind the program was to allow poor people to communicate with their families and for emergency services.  The handout is subsidized by telephone companies adding an average of $2.50 per month to bills of landline and cellphone paying customers.  By 2008 the program’s cost grew to over $800 million, nearly tripling to over $2 billion four years later.

Typical of “do-gooder” programs invented by the government, many beneficiaries the telephone handouts are not those initially intended.  The Journal reported that over 40% of recipients have not proven their eligibility for the program.  In addition, this program is another example of crony capitalism offering huge benefits to cellphone providers including AT&T, Verizon, Sprint, Virgin mobile and TracFone.

As with many government programs of dubious benefit and with significant abuse, the government telephone handout program continues.  Even worse, big government supporters continue to come up with ideas to redistribute wealth to not only to less wealthy Americans, but also to big corporations and of course politicians.  President Obama is a strong advocate of growing such programs.

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California Handing Out Free Cell Phones

Posted by Steve Markowitz on January 9, 2013

One of the many US federal government handout programs is “Lifeline Assistance”.  Through this program, the government offers cellular phones, landlines and Internet services to lower income individuals.  In 2012 the cost of this program exceeded $8 billion with the telephone giveaway portion being about $1.75 billion, double what it was only four years ago.  Nationwide, the program now offers assistance to 17 million households.

cell-phoneThe cell phone handouts are accomplished through private telecom companies.  They subsidize services for recipients deemed eligible by the government and are compensated via a surcharge the companies are allowed to add to the bills of paying customers.  This is yet another grotesque example of crony capitalism with one of the benefited providers being Tracfone owned by the Mexican telecom magnet Carlos Slim, one of the world’s wealthiest citizens.

California is the latest state to join the federal government’s cell phone handout program.  It is estimated that over 4.5 million of the state’s residents will be eligible for the cell phones.  This will eventually cost taxpayers over $450 million annually.

The cell phone handouts are troubling on many levels.  First, it is hard to understand by what authority the government takes funds from some Americans to pay for the convenience of others.  In addition, like many government initiatives, this program is right for abuses.  In fact a critic of the program, Missouri Democratic Senator Claire McCaskill, was outraged when she received a solicitation from a company indicating her eligibility for a free cell phone.  In addition, all that is required to be eligible for the program is proof of receipt of some other federal assistances.  Not required is proof of US citizenship.

Lifeline Assistance is an outgrowth of a program started by the Federal Communications Commission during the administration of Ronald Reagan.  Government handouts often start out with the best of intentions, but are corrupted as they are implemented and grow.  As we ask taxpaying Americans to pay their “fair share”, i.e. more taxes, it is reasonable to ask recipients of handouts to give up some of the free conveniences.

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State and Municipal Crony Capitalism

Posted by Steve Markowitz on December 3, 2012

Often when this Blog writes about the ills of crony capitalism it refers to the actions of the federal government.  Examples are many with this year’s high-profile ones including the $500 million plus loss that the taxpayers took on the wasted Solyndra investment.  A bit further back there was the ill-advised bailouts of General Motors and the Wall Street banks.  In each of these situations, taxpayers were forced to pony up money to save others who made poor business, personal or job decisions.

Crony capitalism is not limited to the federal level.  States and municipalities are guilty of corrupting capitalism and using it for political power.  The New York Times has published an in-depth look on how state and local governments hand out the People’s money to the benefit of some over others in an article titled: As Companies Seek Tax Deals, Governments Pay High Price.

The Times made studied over 150,000 awards made by states and municipalities to various companies.  It concluded that mayors and governors use governmental subsidies and handouts to attract or retain businesses in their localities in an effort to retain the related jobs.  However, these efforts often do not succeed with costs far outweighing the benefits.  Not only do the companies often close or shrink the facilities after receiving the handouts, but in the negotiations themselves the government officials are outgunned by the professionals hired by the companies to extract benefits.

The Times determined that the state and regional governmental handouts that include tax credits, tax exemptions, subsidize services and tax abatements and up to more than $80 billion annually with 20% of this total being subsidized by the federal government.  It offered examples of these misguided efforts:

General Motors – Long before GM received its $50 billion plus 2009 bailout from the federal government, it was extracting handouts from states and local governments in exchange for opening or retaining plants in certain locales.  Approximately 50 properties involved with the 2009 shutdowns or shrinkage were located in towns and/or states that gave GM incentives and handouts in the billions. The subsidies continue today with GM receiving nearly $2 billion in local subsidies during the past five years.

Ford and Chrysler – Each company received approximately well over $1 billion in subsidies during the past five years

Hollywood – Filmmakers continue to be large recipients of governmental gifts.  It is no wonder that these Leftists are for big government.  An example offered by the Times is Oliver Stone’s 2010 “Wall Street” sequel.  While this film by necessity had to be made in New York City, the filmmaker received $10 million in tax credits from the City.  While Stone has been a vocal critic of subsidies to banking and agriculture, he has no problem justifying handouts to his industry and when questioned said: “It’s good.  Or like basically the way business is done. I don’t understand what the moral qualm is.”  How disingenuous.  Like so many others, Stone is only against handouts that go to others.

New York Times – Yes, even the publisher of the story critical of government givebacks to companies received $24 million since 2000 from the state of New York and New York City.

Shell Oil – Pennsylvania has given this multinational conglomerate tax credits worth up to $1.6 billion over the 25 year period.

Caterpillar – This large equipment manufacturer received nearly $200 million in local aid since 2007.

Twitter – After threatening to leave the city, San Francisco exempted Twitter up to $22 million of payroll taxes.  However, this accompany is flush with cash and has since received a $300 million investment from a Saudi Arabian Prince and $800 million from another source.

BMW – This producer of luxury automobiles perceived a $130 million package from the state of South Carolina in 1992 to locate a plant there.

Mercedes-Benz – Not to be outdone by BMW, another German firm, Mercedes, in 1993 received incentives worth over $300 million from the state of Alabama to locate its plant there.

38 Studios – This videogame startup owned by retired Boston Red Sox pitcher Curt Schilling received $75 million in loan guarantees from the state of Rhode Island.  The company never released a game and dismissed nearly all of its 400 workers earlier this year.  The taxpayers of Rhode Island are stuck with the bill.


States and municipalities across the Country are guilty of wasting taxpayer funds on crony capitalism.  The Times reported that Texas offers the most incentives, almost $20 billion per year.  Alaska, West Virginia and Nebraska offer the most corporate handouts per state residents.  Oklahoma and West Virginia giveaways account for about one third of their states’ budgets.  This corruption is massive.

The crony capitalism exhibited in the governments’ corporate handouts is problematic on many levels.  First, it assumes that the states’ constitutions allow these governments to make the gifts.  In addition, there are no guarantees the companies will remain after receiving the handouts.  Finally, giving these awards to particular companies is nothing more than governments’ picking winners and losers.  For example the incentives to bring in new companies come from the tax base that includes long-term payers, the already existing employers in the states.  This perverse system results in money from the long-term tax payers being used to increase the competition for local labor and materials that ultimately increases their costs and lowers their profits.  Not only is this a unfair disadvantage to the already existing corporations, but it ultimately leads to lower tax revenues from these entities as they become less profitable.

A company’s decision to locate its facilities in a state or city should be made only on the basis of sound economics that includes the quality of its labor force, the relative cost of that labor, as well as other factors such as permanent taxes and infrastructure availability.  When the government subverts this most basic of business and economic logic, it guarantees negative consequences in the long term.  It is also a corruptive force on the political class.


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Crony Capitalism and the Political Class

Posted by Steve Markowitz on December 1, 2012

A remarkable data point to come from the 2012 presidential election was that Republican candidate Mitt Romney received 3 million less votes than John McCain did in 2008.  While neither Republican candidates were extremely attractive, this discrepancy is astounding given that Barack Obama ran against the unpopular legacy of George W. Bush in 2008 that included the Iraq war and economic meltdown.  However, this time around it was Obama who had the legacy of failure, but did not pay a political price for it.

While many conclude that the Republican’s 2012 defeat was the result of changing demographics, this logic is incomplete.  While the style of Romney and Obama were clearly differentiated, the Republicans spent much of their time running against Obama, rather than proposing game-changing policies.

One area that the Republicans failed to present a coherent case was on taxes.  Obama ran on increasing taxes on the top 2%, and easy sell for the lower 98% of the electorate.  Romney countered by offering an undefined promise to end loopholes.  However, without specifics, this sounded to many as protecting the country-club set at the expense of the common folks.

Relating to taxes and income redistribution is the subject of subsidies.  The government subsidizes many special interests.  While this includes programs for the needy, it also includes programs that subsidize wealthier Americans.  Romney and the Republicans were viewed as attacking the programs that mainly benefit the needy.  This caricature could have been avoided with a simple program to eliminate government corporate subsidies, a big part of crony capitalism.  But the Republicans were silent on this issue.

Boston Globe columnist Jeff Jacoby wrote an interesting piece titled: “Yes, slash farm subsidies — but don’t stop there.  Jacoby, a conservative writer, suggests support of a policy being proffered by the ultra-Leftists US Senator-elect from Massachusetts, Elizabeth Warren.  Ms. Warren suggests eliminating America’s federal agricultural subsidies, a view shared by Jacoby and this Blogger.  Jacoby points out the following concerning the subsidies:

  • During the past six years, farm subsidies cost US taxpayers approximately $275 billion.
  • The average farm household income in 2010 was over $84,000, 25% higher than the average for all US households that year.
  • 75% of government payments to farmers went to only 10% of farm businesses.  Some of these funds went to millionaires.

While Ms. Warren’s motivation behind cutting farm subsidies is political rather than altruistic given that few of these subsidies go to her state of Massachusetts, conservatives should back her proposal.  This could then be used as a springboard to eliminate other crony capitalism subsidies that also disproportionately benefit wealthier Americans.  Such a platform, if appropriately presented, would have wide appeal since such programs by their very nature can only benefit a small percentage of the population.

Attacking subsidies to wealthier Americans is but a first step in a broader program to limit the handout and entitlement mentalities that is taken over the Country.  However, it is a prerequisite for cutting the handouts that are the basis of power for the nanny state and the political class that runs it.  Republicans would do well to take a truly conservative position on this bi-partisan issue of the People.  But those already in power have self-interest in perpetuating the political power of handouts.

Posted in Capitalism, Government Handouts | Tagged: , , , , , , , , | Leave a Comment »

Liberals Explain Why Government Should Pay for Birth Control

Posted by Steve Markowitz on August 11, 2012

Some Libertarians have difficulty understanding why the government should pay for personal conveniences of some, such as birth control.  The video below “helps” those of us that don’t get it not to get it.

Posted in Government Handouts, Liberals | Leave a Comment »

45% of Vets Seeking Disability Payments

Posted by Steve Markowitz on May 30, 2012

The Associate Press published a story of soaring disability claims by veterans that has broader implications for society.  The numbers include:

  • 45% of the 1.6 million veterans who served in Iraq and Afghanistan have or are seeking payments for injuries they claim to be service-related.
  • Only 21% of veterans who served in the first Gulf War in the early 1990s sought similar disability payments.
  • Veterans from the Iraq and Afghanistan Wars claim nearly 10 ailments per individual compared to Vietnam veterans receiving compensation for 4 ailments each.  World War II and Korea vets on disability claim only 2 ailments each.

There are differences between the sample populations compared above.  For example, women are now involved in frontline soldiering.  In addition, medical technology allows more severely injured soldiers survive.  Also, the technology of warfare has changed including different types of explosives.  However, it is unlikely these differences totally explain the huge increase in disability claims, especially since only a percentage of deployed troops actually see combat.

With the deteriorating economy, a large increase in disability claims has also been occurring in the civilian world.  The rise in disability claims in both arenas is not surprising given the government’s increasing role in supporting citizens it determines to be in need.  While few would argue that those truly in need, especially those injured while serving in the military, should be supported by the country, abuses are inevitable as the nanny-state becomes more pervasive throughout society.

It is a difficult and complex task for a bureaucracy and politicians to determine who is deserving of government assistance and who is not.  Creating successful mechanisms to control the handout process is nearly impossible.  The only way to reasonably control the process is to force the government to live within its means, i.e. a balanced budget.  At least then a generation offering a benefit is forced to pay for it, not future generations.

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