3/4/13

Who's in the mood for a little thought exercise today? Because I came across this Bloomberg piece that claims Wall Street banks get an $83 billion annual taxpayer subsidy and, when you look at it the way they do, it's hard to disagree. The piece further states that the 10 largest banks in America wouldn't even break even without it, so essentially all the comp from bottom to top is a taxpayer handout.

There are a couple of things you have to accept for this to make sense. First, you must acknowledge that Too Big To Fail is enshrined in our policy now, thereby eliminating the vast majority of risk to bank bondholders. Obviously, with minimal risk comes a decreased borrowing cost (or government subsidy, if you will) which the IMF has pegged at 80 basis points.

When that discount is applied to the total liabilities of the 10 largest American banks, it results in an $83 billion taxpayer subsidy (because the banks' safety net is the implied backstopping by US taxpayers). Put another way, without this subsidy America's top banks would barely break even, and some would even lose money.

I realize this is a bit of monkey math (It's not like the banks are getting a check for it from the Treasury. It isn't 2009 after all.). But don't rush to dismiss it, because there is definitely something there.

If you go to buy a car after being on your first job for 60 days, you're going to pay a monster interest rate if they don't laugh you off the lot to begin with. You get your parents to co-sign on the loan, however, and it's a whole other ballgame. It saves you thousands over the life of the loan.

Essentially the US taxpayers are the fretting parents co-signing the loan for the teenage banker's monster truck.

Neither bank executives nor shareholders have much incentive to change the situation. On the contrary, the financial industry spends hundreds of millions of dollars every election cycle on campaign donations and lobbying, much of which is aimed at maintaining the subsidy. The result is a bloated financial sector and recurring credit gluts. Left unchecked, the superbanks could ultimately require bailouts that exceed the government's resources. Picture a meltdown in which the Treasury is helpless to step in as it did in 2008 and 2009.

With all the news about the sequester flying around right now, I could see cutting off this implicit subsidy becoming a popular notion with the general public (and, frankly, anyone with a love of free markets and an ounce of decency). What I think a lot of folks will fail to realize, however, is that it wouldn't actually save the government any money. On the other hand, it would certainly right an egregious wrong, so that's reason enough to do it in my book, but those well-paid bank lobbyists and scumbag politicians would never let that happen.

Anyway, I'd like to hear what you guys think. Is this an actual subsidy or more just a product of a think tank's need to justify its budget?

Comments (100)

2/26/13

You forgot to mention all of the millions of deposit holders (i.e. creditors) of the big banks who likewise benefit from the surety of federal government backing. So therefore essentially you have taxpayers 'backstopping' their own accounts. Sounds a lot like one giant insurance policy to me.

2/26/13

diverse_kanga:
You forgot to mention all of the millions of deposit holders (i.e. creditors) of the big banks who likewise benefit from the surety of federal government backing. So therefore essentially you have taxpayers 'backstopping' their own accounts. Sounds a lot like one giant insurance policy to me.

Completely different scenario. The FDIC guarantee is insurance that depositors pay for. Not a freebie.

2/26/13

Yes, it is a subsidy. I sure as hell wouldn't co-sign a deadbeat friends loan for nothing in return.

However, I don't think anything can really be done about it though, the government likes to use the banks when necessary, like making loans to poor people to make them feel wealthier so they can get elected. Also, the banks make great scapegoats. Why would the politicians want to get rid of one of their favorite whipping boys? Get rid of the banks then people might actually blame them.

2/26/13

How exactly would you cut off this implicit subsidy? If JP Morgan or Bank of America got in trouble, the overwhelming odds are that the gov't would step in and backstop them. Even if the gov't says "we're not going to backstop banks anymore", few investors would believe that statement.

adapt or die:
What would P.T. Barnum say about you?

MY BLOG

2/26/13

Just some more context:

Matt Levine's response to the methodology:
http://dealbreaker.com/2013/02/why-should-taxpayer...

Bloomberg's response to ML clarifying methodology:
http://www.bloomberg.com/news/2013-02-24/remember-...

"For I am a sinner in the hands of an angry God. Bloody Mary full of vodka, blessed are you among cocktails. Pray for me now and at the hour of my death, which I hope is soon. Amen."

2/27/13

Bloomberg article is idiotic.

duffmt6:
Matt Levine's response to the methodology:
http://dealbreaker.com/2013/02/why-should-taxpayer...

This. Dealbreaker nailed it once again.
2/27/13

mxc:
Bloomberg article is idiotic.
duffmt6:
Matt Levine's response to the methodology:
http://dealbreaker.com/2013/02/why-should-taxpayer...

This. Dealbreaker nailed it once again.

I'm impressed he actually read an entire dry finance research article.

2/26/13

Bloomberg has been slowly disappointing me for some time now. If borrowing costs went up so would lending costs. The banks wouldn't eat it. And all the big banks were profitable before TBTF entered into our vocabulary. So while this means TBTF banks can unfairly borrow at lower costs because of a government backstop, this isn't the same as the government giving direct hand outs.

I'm sorry, but an academic paper is not going to be synthesized down to a BB opinion piece without taking some huge liberties. This is a great example of it.

2/26/13

TNA:
Bloomberg has been slowly disappointing me for some time now. If borrowing costs went up so would lending costs. The banks wouldn't eat it. And all the big banks were profitable before TBTF entered into our vocabulary. So while this means TBTF banks can unfairly borrow at lower costs because of a government backstop, this isn't the same as the government giving direct hand outs.

I'm sorry, but an academic paper is not going to be synthesized down to a BB opinion piece without taking some huge liberties. This is a great example of it.

Exactly what was going through my head.

Banks make money on the spread. It's not as if the spread would just close up if the government stopped giving them discounted borrow, they would just shift the spread upwards. All of the bank's clients benefit from this subsidy as well (not that I think that's a good thing).

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

Best Response
2/26/13

I do think it is a subsidy, but I question the 80 bps number, especially because they are applying it to ALL liabilities, many of which don't require interest payments like Minority Interest.

It also includes depositor balances, which are covered by FDIC anyways so the safety of the bank itself isn't too much of a concern. Even if it were a concern, I think checking / savings accounts are pretty interest-rate-inelastic for the majority of people with bank accounts. Did any of you choose Bank XYZ because they paid 11 basis points on savings accounts rather than the 9 basis points of their competitors? It is basically assuming that everyone that uses the bank would demand an additional 80 bps per year on their savings accounts if it weren't for TBTF, which I don't think it realistic. I think it is a foregone conclusion for most people that you earn nothing on checkings / savings accounts, and it has nothing to do with TBTF.

Just for some reference, I looked up JPM and saw they have about $2 trillion in total liabilities. But if we exclude the stuff like Accounts Payable, Minority Interest, and Customer Deposits, which wouldn't realistically pay 80 bps higher without TBTF and look at just long term debt (and its current portion), they have about $685 billion in borrowed money. 80 bps of this would be about $5.5 billion, and after accounting for the tax shield of debt interest payments, this is about $3.5 billion.

This $3.5 billion is a lot of money, but considering the bank had net income of $19 billion in 2011, I would hardly say they would be scraping by without this "subsidy."

The article also assumes that the banks would operate the same without the subsidy, which I don't think is realistic either. I don't think the banks would take out as much debt if they had to pay 80bps more, and I think they would charge more interest across the board as well. The banks provide a necessary service, if their costs went up, they would just increase their prices. The demand for loans, checking, and savings accounts is never going to go away, it just might stall from time to time in poor economic environments.

2/26/13

Break up the big banks so that they are small enough to fail without consequence.

2/26/13

TheKing:
Break up the big banks so that they are small enough to fail without consequence.

Step 1: Take the large banks out from under their shield of bureaucratic red tape that makes building a small financial franchise next to impossible.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

2/26/13

NorthSider:
TheKing:
Break up the big banks so that they are small enough to fail without consequence.

Step 1: Take the large banks out from under their shield of bureaucratic red tape that makes building a small financial franchise next to impossible.


http://www.politixcartoons.com/wp-content/uploads/...

Get busy living

2/26/13

UFOinsider:
NorthSider:
TheKing:
Break up the big banks so that they are small enough to fail without consequence.

Step 1: Take the large banks out from under their shield of bureaucratic red tape that makes building a small financial franchise next to impossible.


http://www.politixcartoons.com/wp-content/uploads/...

FWIW, I hate both the Republicans and the Democrats.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

2/26/13

NorthSider:
TheKing:
Break up the big banks so that they are small enough to fail without consequence.

Step 1: Take the large banks out from under their shield of bureaucratic red tape that makes building a small financial franchise next to impossible.

Agreed with this 110%. It's EXTRAORDINARILY difficult to start and/or operate a small bank in this regulatory environment. Just on the surface level, without FDIC insurance no bank could prosper; however, obtaining FDIC insurance is like getting into Harvard. Then to keep FDIC insurance and to meet consisent regulatory body oversight, a banking institution has to undergo monster efforts and hire a very expensive compliance staff or department.

There really is little incentive for small bankers to go into business. As a part owner in a bank, I often wonder what the hell it is that I'm doing. I can see that there can be some amazing payoffs, but the likelihood is very small for the typical investment group that would want to start a bank.

2/26/13

NorthSider:
TheKing:
Break up the big banks so that they are small enough to fail without consequence.

Step 1: Take the large banks out from under their shield of bureaucratic red tape that makes building a small financial franchise next to impossible.

Agreed. Made me think of this, which is a really entertaining watch and all the episodes are on YouTube. And it's a true story to boot:

2/26/13

Well the too big to fail effect on banks (read hidden subsidies) was already investigated in 2012. The researcher estimated, between 2007 and 2010, simply being too big to fail saved America's biggest banks a combined $120 billion.
Google for "JPMorgan's $10 Billion Subsidy" and read the businessweek article (sorry, I cannot post the direct link as chimp).

2/26/13

Bloomberg definitely puts forth an incomplete argument on its behalf and ignores some basic principles of banking (as already mentioned--spread). That said, the way Wall Street and Washington, D.C. operate is the argument for smaller and/or limited and/or Constitutional government. No matter if conservatives or liberals, Republicans or Democrats are in office, the form of governance we have with the revolving door of D.C. bureaucrats and Wall Street executives and with Wall Street money and Congressional politics is inevitably corrupting. This is why I never understood the Occupy Wall Street movement. It targeted the rational players--high finance and finance lobbying to reap excess profits--instead of the big government crony capitalist system that legally entices rational business players.

If you reduce the influence of government on the market then you will inevitably reduce the ability of rich New Yorkers from receiving tax payer subsidies. As a banker myself, the idea that there isn't enough government in banking is breathtaking. We literally have entire departments dedicated to government compliance. Whether the "true subsidy" is $830 million or $830 billion, every penny of that subsidy is made possible through the bureaucracy, much of it the unelected bureaucracy.

2/26/13

I used to go to Bloomberg for decent and intelligent financial news. Now it has basically devolved into trash. Their opinion piece is completely political and a very simplistic article. Not something I go to Bloomberg for.
http://research.stlouisfed.org/fred2/graph/?id=USNIM

NIM is what we should be focusing on. I suppose their argument is that big banks get a benefit in their NIM because the rate they pay is artificially lower.

NIM for banks with average assets >$15B: 3.25%
http://research.stlouisfed.org/fred2/series/USG15N...

NIM for banks with average assets http://research.stlouisfed.org/fred2/series/US1NIM...

"Net interest margin (NIM) is a measure of the difference between the interest income generated by banks or other financial institutions and the amount of interest paid out to their lenders (for example, deposits), relative to the amount of their (interest-earning) assets. It is similar to the gross margin of non-financial companies."
http://en.wikipedia.org/wiki/Net_interest_margin

So if a TBTF bank is borrowing at an artificially lower rate and lending at the market rate, their NIM should be higher than smaller banks which have a high borrowing rate.

2/26/13

Don't hate the player. Hate the game.

2/26/13

"Others may come up with different numbers, but the conclusion is the same: Banks get a very big subsidy from taxpayers. This subsidy distorts markets and encourages banks to become a threat to the economy."

That conclusion still holds water, even if the method has some flaws. There is no doubt that we are propping up the banking industry.

2/26/13

Gomez Addams:
"Others may come up with different numbers, but the conclusion is the same: Banks get a very big subsidy from taxpayers. This subsidy distorts markets and encourages banks to become a threat to the economy."

That conclusion still holds water, even if the method has some flaws. There is no doubt that we are propping up the banking industry.

The question is, who is "we"? Half of American adults don't pay federal income taxes.

2/26/13

DCDepository:
The question is, who is "we"? Half of American adults don't pay federal income taxes.

Most of the people who pay neither federal income tax nor payroll taxes are elderly and living on a fixed income, unable to work due to a serious disability, or students, most of whom subsequently become taxpayers. In years like the last few, this group also includes a significant number of people who have been unemployed the entire year and cannot find work. Only 4.1% of the population is on welfare and considering that in 40 states welfare pays more than an $8 per hour job, I'm frankly surprised that number isn't a whole lot higher.

Just putting a stake in the heart of that one once and for all because I'm tired of hearing it.

Get busy living

2/26/13

UFOinsider:
DCDepository:
The question is, who is "we"? Half of American adults don't pay federal income taxes.

Most of the people who pay neither federal income tax nor payroll taxes are elderly and living on a fixed income, unable to work due to a serious disability, or students, most of whom subsequently become taxpayers. In years like the last few, this group also includes a significant number of people who have been unemployed the entire year and cannot find work. Only 4.1% of the population is on welfare: considering that in 40 U.S. states welfare pays more than an $8 per hour job, I'm frankly surprised that number isn't a whole lot higher.

Where do you get your stats?
http://www.washingtonpost.com/blogs/wonkblog/wp/20...

7% who don't pay taxes are poor.

10.3% are elderly.

The rest because of a combination of earned income tax credits and other deductions.

Eliminate deductions, allow the bottom 25% to not pay taxes and have a progressive tax system. Done.

2/26/13

TNA:
allow the bottom 25% to not pay taxes and have a progressive tax system. Done.

Agree

Also, per point 7 in your link "Over their full lifetime, the vast majority of workers end up paying income taxes and federal taxes". All I was getting at was that the 50% number is technically true but evokes a somewhat innacurate interpretatio of things. Most people pay taxes during their life (almost 90%) but at various points, for various reasons, don't. ...but there is no half of the population that does all the work and supports the other half for the duration, as GOP rhetoric likes to imply LOL

And yeah, that's off topic.

Get busy living

2/26/13

UFOinsider:
Also, per point 7 in your link "Over their full lifetime, the vast majority of workers end up paying income taxes and federal taxes". All I was getting at was that the 50% number is technically true but evokes a somewhat innacurate interpretatio of things. Most people pay taxes during their life (almost 90%) but at various points, for various reasons, don't. ...but there is no half of the population that does all the work and supports the other half for the duration, as GOP rhetoric likes to imply LOL

Also, there is no half of the population that is permanently "stuck" in the middle class, with no opportunity for upward mobility and no "working poor" who just can't get a break.

Both parties are corrupt, stupid and full of empty rhetoric.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

2/26/13

UFOinsider:
DCDepository:
The question is, who is "we"? Half of American adults don't pay federal income taxes.

Most of the people who pay neither federal income tax nor payroll taxes are elderly and living on a fixed income, unable to work due to a serious disability, or students, most of whom subsequently become taxpayers. In years like the last few, this group also includes a significant number of people who have been unemployed the entire year and cannot find work. Only 4.1% of the population is on welfare and considering that in 40 states welfare pays more than an $8 per hour job, I'm frankly surprised that number isn't a whole lot higher.

Just putting a stake in the heart of that one once and for all because I'm tired of hearing it.

Payroll taxes DON'T contribute to the federal budget. That's a person paying into his or her future benefits--that's not a citizen paying for the general welfare or national defense of the nation. So let me put a stake in the heart of your tired bullshit leftist argument.

2/26/13

DCDepository:
UFOinsider:
DCDepository:
The question is, who is "we"? Half of American adults don't pay federal income taxes.

Most of the people who pay neither federal income tax nor payroll taxes are elderly and living on a fixed income, unable to work due to a serious disability, or students, most of whom subsequently become taxpayers. In years like the last few, this group also includes a significant number of people who have been unemployed the entire year and cannot find work. Only 4.1% of the population is on welfare and considering that in 40 states welfare pays more than an $8 per hour job, I'm frankly surprised that number isn't a whole lot higher.

Just putting a stake in the heart of that one once and for all because I'm tired of hearing it.

Payroll taxes DON'T contribute to the federal budget. That's a person paying into his or her future benefits--that's not a citizen paying for the general welfare or national defense of the nation. So let me put a stake in the heart of your tired bullshit leftist argument.

Those future benefits you just mentioned (SS, Medicare / caid) make up ~45% of the federal budget every year. You are saying that just because the payroll tax pays for one half of the budget, the half which you politically disagree with, and not the other half (military spending, interest on debt used to pay for pointless wars) which it sounds like you have a raging hard-on for, it doesn't count.

Payroll taxes accounted for 35% of federal tax income in 2012. Income tax accounted for 46% of the total. Please don't bring your bullshit argument that one counts and not the other, you cannot cherry pick your facts to fit your biased opinion.
http://en.wikipedia.org/wiki/File:U.S._Federal_Rec...
http://en.wikipedia.org/wiki/File:U.S._Federal_Spe...

2/26/13

evan1482:
DCDepository:
UFOinsider:
DCDepository:
The question is, who is "we"? Half of American adults don't pay federal income taxes.

Most of the people who pay neither federal income tax nor payroll taxes are elderly and living on a fixed income, unable to work due to a serious disability, or students, most of whom subsequently become taxpayers. In years like the last few, this group also includes a significant number of people who have been unemployed the entire year and cannot find work. Only 4.1% of the population is on welfare and considering that in 40 states welfare pays more than an $8 per hour job, I'm frankly surprised that number isn't a whole lot higher.

Just putting a stake in the heart of that one once and for all because I'm tired of hearing it.

Payroll taxes DON'T contribute to the federal budget. That's a person paying into his or her future benefits--that's not a citizen paying for the general welfare or national defense of the nation. So let me put a stake in the heart of your tired bullshit leftist argument.

Those future benefits you just mentioned (SS, Medicare / caid) make up ~45% of the federal budget every year. You are saying that just because the payroll tax pays for one half of the budget, the half which you politically disagree with, and not the other half (military spending, interest on debt used to pay for pointless wars) which it sounds like you have a raging hard-on for, it doesn't count.

Payroll taxes accounted for 35% of federal tax income in 2012. Income tax accounted for 46% of the total. Please don't bring your bullshit argument that one counts and not the other, you cannot cherry pick your facts to fit your biased opinion.
http://en.wikipedia.org/wiki/File:U.S._Federal_Rec...
http://en.wikipedia.org/wiki/File:U.S._Federal_Spe...

No, that's not what I'm saying. FICA (payroll) taxes are for an individual's FUTURE benefit. INCOME TAXES are for the general fund, which pays for the established authority of government, such as defense, infrastructure, regulatory bodies, etc. Payroll taxes do NOT cover these items. They cover an individual's future "insurance" benefits. There's a HUGE difference between those taxes. If you aren't paying federal income taxes then you aren't subsidizing dick with regard to the banks--you have no right to complain about what government spends its money on.

2/26/13

DCDepository:
No, that's not what I'm saying. FICA (payroll) taxes are for an individual's FUTURE benefit. INCOME TAXES are for the general fund, which pays for the established authority of government, such as defense, infrastructure, regulatory bodies, etc. Payroll taxes do NOT cover these items. They cover an individual's future "insurance" benefits. There's a HUGE difference between those taxes. If you aren't paying federal income taxes then you aren't subsidizing dick with regard to the banks--you have no right to complain about what government spends its money on.

Look, I don't want to get into a pissing match here, so let's just please look at the facts. This whole 50% of people don't pay taxes and just live off the government thing is basically saying that 50% of people don't pay into medicare / medicaid / SS becuase they don't pay income tax, but they still get a "handout" from the government from these programs. That is categorically false.

The 47% comment was not made in regard to bank bailouts. It was made in regards to 47% being "takers" because they don't pay INCOME tax. Yet the tax they do pay (payroll) is going directly to the programs that are funding the benefits they receive in the future.

Now, in regards your question of who the "we" are, you stated that [quote=DCDeposotory] Half of American adults don't pay federal income taxes {/quote]. This is just bad math. 47% of all Americans don't pay federal income tax, yes, but the denominator in this equation includes children (most will pay federal income taxes eventually) and the elderly (most paid income taxes pre-retirement). If you look only at the proportion of working-age adults who pay no income tax, it falls to ~60MM of 240MM working age adults.

Let's do the math: 6/24 = 25% who pay no federal INCOME tax (although most do pay payroll tax, so they do pay for the entitlements they receive)

There you go, there is the "we" you are looking for ... 75% of working age adults and 80% of the total population.

2/26/13

evan1482:
Those future benefits you just mentioned (SS, Medicare / caid) make up ~45% of the federal budget every year. You are saying that just because the payroll tax pays for one half of the budget, the half which you politically disagree with, and not the other half (military spending, interest on debt used to pay for pointless wars) which it sounds like you have a raging hard-on for, it doesn't count.

Payroll taxes accounted for 35% of federal tax income in 2012. Income tax accounted for 46% of the total. Please don't bring your bullshit argument that one counts and not the other, you cannot cherry pick your facts to fit your biased opinion.
http://en.wikipedia.org/wiki/File:U.S._Federal_Rec...
http://en.wikipedia.org/wiki/File:U.S._Federal_Spe...

I'm not getting into this debate of who does or doesn't pay taxes, but I sense that the point of bringing up people who don't pay income taxes is to point out that the top 1% of the population pays almost as much in taxes as the bottom 95% combined.

Also, I would the entire government budget (military, welfare, education, etc.). The only reason people focus on welfare is because the growth in welfare spending is unconscionable. Military spending is way too high as well, but at least it hasn't exhibited the same growth trajectory. Please limit the government by whatever means possible.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

2/26/13

nm

2/26/13

NorthSider:
the top 1% of the population pays almost as much in taxes as the bottom 95% combined.
Since we're bandying rhetoric, given they kind of own a controlling stake of pretty much everything, I'd say that's about par for the course.
NorthSider:
Military spending is way too high as well, but at least it hasn't exhibited the same growth trajectory.

LOL oh hell no. Military spending is out completely out of control, and the "clean up" of veterans benefits and medical claims are a guaranteed future charge. Observe:
http://www.project.org/images/graphs/Spending_by_C...

NorthSider:
Please limit the government by whatever means possible.

I guess. Sure. Honestly it seems more straightforward to just focus on where each good solution is, whether that means making the government smaller, or making it work better.

I do laugh at the notion of TBTF: we already have a national central bank and any of these other businesses are expendable. Part of me thinks that if such banks needed a bailout then the gov't should be allowed to dismantle them. The other part of me kind of agrees with current policy: the gov't has their back, but they're getting rid of the high risk stuff and making a few demands of their own. Nothing is free?

Get busy living

2/26/13

UFOinsider:
LOL oh hell no. Military spending is out completely out of control, and the "clean up" of veterans benefits and medical claims are a guaranteed future charge. Observe:
http://www.project.org/images/graphs/Spending_by_C...

That would be an impressive graph, if it even held a candle to the growth in welfare spending. Observe:

Look, I agree with you: military spending is egregious, much higher than what is justified by our present situation. I don't have any argument with you here. But the fact that you aren't concerned with the growth in welfare spending is worrisome, to say the least.

I guess. Sure. Honestly it seems more straightforward to just focus on where each good solution is, whether that means making the government smaller, or making it work better.

There is no such thing as a "well-working" government. History has proven this point again and again. There is only one solution: limitation.

I do laugh at the notion of TBTF: we already have a national central bank and any of these other businesses are expendable. Part of me thinks that if such banks needed a bailout then the gov't should be allowed to dismantle them. The other part of me kind of agrees with current policy: the gov't has their back, but they're getting rid of the high risk stuff and making a few demands of their own. Nothing is free?

They shouldn't have bailed them out in the first place, plain and simple.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

2/26/13

NorthSider:

That would be an impressive graph, if it even held a candle to the growth in welfare spending. Observe:

Look, I agree with you: military spending is egregious, much higher than what is justified by our present situation. I don't have any argument with you here. But the fact that you aren't concerned with the growth in welfare spending is worrisome, to say the least.

Where the fuck do you guys get this shit? You literally live in your own universe, where facts have no sway in shaping your opinion. Observe:
http://upload.wikimedia.org/wikipedia/commons/a/ac...
http://en.wikipedia.org/wiki/File:Welfare_Benefits...

If we are talking about welfare, i.e. TANF, these are the facts. The TANF budget was $17BNin 2011, not +$700BN. This is not a matter of opinion.

2/26/13

evan1482:
Where the fuck do you guys get this shit? You literally live in your own universe, where facts have no sway in shaping your opinion. Observe:
http://upload.wikimedia.org/wikipedia/commons/a/ac...
http://en.wikipedia.org/wiki/File:Welfare_Benefits...

If we are talking about welfare, i.e. TANF, these are the facts. The TANF budget was $17BNin 2011, not +$700BN. This is not a matter of opinion.

Who in god's name defines welfare solely as TANF? You honestly think welfare spending in the United States is $17 bn in totality?? Is this a serious post?

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

2/26/13

NorthSider:
evan1482:
Where the fuck do you guys get this shit? You literally live in your own universe, where facts have no sway in shaping your opinion. Observe:
http://upload.wikimedia.org/wikipedia/commons/a/ac...
http://en.wikipedia.org/wiki/File:Welfare_Benefits...

If we are talking about welfare, i.e. TANF, these are the facts. The TANF budget was $17BNin 2011, not +$700BN. This is not a matter of opinion.

Who in god's name defines welfare solely as TANF? You honestly think welfare spending in the United States is $17 bn in totality?? Is this a serious post?

Don't worry man. Lot of uninformed people talking on this post. We spend $75B per year on food stamps alone.

2/26/13

NorthSider:

I'm not getting into this debate of who does or doesn't pay taxes, but I sense that the point of bringing up people who don't pay income taxes is to point out that the top 1% of the population pays almost as much in taxes as the bottom 95% combined

With income inequality comes tax inequality. That's how the percentages work...

2/26/13

freeloader:
NorthSider:

I'm not getting into this debate of who does or doesn't pay taxes, but I sense that the point of bringing up people who don't pay income taxes is to point out that the top 1% of the population pays almost as much in taxes as the bottom 95% combined

With income inequality comes tax inequality. That's how the percentages work...

I don't think anyone is complaining about rich paying more. But to have the poor pay nothing and then bitch about someone else not paying more is a travesty.

2/26/13

freeloader:
With income inequality comes tax inequality. That's how the percentages work...

People try to make it sound like the rich don't pay their "fair share" of taxes, I was merely refuting that point. Moreover, income inequality is a silly reference point: what matters is that the standard of living for a country is consistently increasing over time, and that is what is achieved in a free market society.

There is no example of a country that dramatically improved its standard of living without free enterprise and, largely, free trade.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

2/26/13

Gomez Addams:
That conclusion still holds water, even if the method has some flaws. There is no doubt that we are propping up the banking industry.

With esoteric regulations that prevent new entrants. It's not as if there is no demand for banking and the industry would go under without the support of government. We are just so obsessed with keeping banks more heavily regulated than any other industry.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

2/26/13

Government created this problem and is not blaming banks so there can be more "regulations" - aka bigger government.

Roll back GS (thanks Bill Clinton for repealing it). Allow banks to fail. Shrink government.

Done and Done.

2/26/13

Yeah. Whenever someone talks about Federal Income taxes the "well they pay payroll taxes" comes out. Apples and Oranges.

Edit - I am sorry. My response was on topic, but off discussion. I thought we were staying on topic and I was rebutting anyone who falsely claims that the majority of people who don't pay Federal Income taxes are poor/old.

2/26/13

I agree that there is an implicit subsidy and it's wrong, but if the implicit subsidy were gone as a result of legislation that ensured that TBTF wouldn't happen again, wouldn't they just take out less debt/make fewer loans? The optimal balance of deposits/loans would be different in that scenario so I doubt they would be breaking even or going negative in that scenario, although profits would definitely be lower.

2/26/13

I just vote for the party thats answer isn't always more taxes.

2/26/13

Edited

2/26/13

Half this country doesn't pay Federal Income tax. The banks were bailed out using Federal funds.

Real simple. Stop injecting payroll taxes into this because that is not what we are talking. Everyone that works pays payroll taxes.

And the whole point about SSI insolvency is that payroll taxes won't cover outlays.

2/26/13

Smaller government is always the correct answer. Military spending as a % of GDP is very low and lower than in the past.

We need to cut entitlements as they are going to go exponentially.

Also, why is the fact that the rich "control" everything an excuse.

1) That is just an airball statement

2) Everyone benefits from this country. The roads, the laws, etc. Yet this country is funded by shrinking portion of the populace. Wrong and wrong.

2/26/13

Man bro, you can't do simple math lol.

2/26/13

http://www.washingtontimes.com/news/2012/oct/18/we...

"Federal spending on more than 80 low-income assistance programs reached $746 billion in 2011, and state spending on those programs brought the total to $1.03 trillion, according to figures from the Congressional Research Service and the Senate Budget Committee"

2/26/13

You can't have a discussion about federal taxes and then cite benefits taxed and paid out on the state level. TANF is the federal welfare program. If you want to talk about state taxes, who pays and doesn't, and state welfare benefits, that is a different topic.

Seriously, who has a discussion about the federal government then cites payouts by states as a reason for limiting the growth in the federal government. This is why you have no credibility in the eyes of the majority of americans, or the world for that matter.

2/26/13

evan1482:
You can't have a discussion about federal taxes and then cite benefits taxed and paid out on the state level. TANF is the federal welfare program. If you want to talk about state taxes, who pays and doesn't, and state welfare benefits, that is a different topic.

Seriously, who has a discussion about the federal government then cites payouts by states as a reason for limiting the growth in the federal government. This is why you have no credibility in the eyes of the majority of americans, or the world for that matter.

Dude, you don't understand the topic you are discussing. I suggest you read up on it before you continue making yourself look like a clown.

2/26/13

TNA:
evan1482:
You can't have a discussion about federal taxes and then cite benefits taxed and paid out on the state level. TANF is the federal welfare program. If you want to talk about state taxes, who pays and doesn't, and state welfare benefits, that is a different topic.

Seriously, who has a discussion about the federal government then cites payouts by states as a reason for limiting the growth in the federal government. This is why you have no credibility in the eyes of the majority of americans, or the world for that matter.

Dude, you don't understand the topic you are discussing. I suggest you read up on it before you continue making yourself look like a clown.

Great argument, sound use of facts and reasoning.

2/26/13

evan1482:
Great argument, sound use of facts and reasoning.

Your arguments are so misguided, it's hardly worth trying to refute. I can list several federal welfare programs that pay out more that $17 billion on their own:

Food Stamps: $75+ bn
Pell Grants: $40+ bn
Section 8 Housing: $25+ bn
Medicaid: $270+ bn (federal funding alone)
EITC: $55+ bn
SSI/OAA: $55+ bn

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

2/26/13

evan1482:
You can't have a discussion about federal taxes and then cite benefits taxed and paid out on the state level. TANF is the federal welfare program. If you want to talk about state taxes, who pays and doesn't, and state welfare benefits, that is a different topic.

Seriously, who has a discussion about the federal government then cites payouts by states as a reason for limiting the growth in the federal government. This is why you have no credibility in the eyes of the majority of americans, or the world for that matter.

Dude, you have no idea what you're talking about. Federal spending on Food Stamps alone was $78 billions. That's not state-level benefits, that's federally funded welfare...

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

2/26/13

NorthSider:
evan1482:
You can't have a discussion about federal taxes and then cite benefits taxed and paid out on the state level. TANF is the federal welfare program. If you want to talk about state taxes, who pays and doesn't, and state welfare benefits, that is a different topic.

Seriously, who has a discussion about the federal government then cites payouts by states as a reason for limiting the growth in the federal government. This is why you have no credibility in the eyes of the majority of americans, or the world for that matter.

Dude, you have no idea what you're talking about. Federal spending on Food Stamps alone was $78 billions. That's not state-level benefits, that's federally funded welfare...

Then why in the graph that you posted does it say that both state and federal food aid totals $63BN. Is your own graph incorrect?

2/26/13

evan1482:
NorthSider:
evan1482:
You can't have a discussion about federal taxes and then cite benefits taxed and paid out on the state level. TANF is the federal welfare program. If you want to talk about state taxes, who pays and doesn't, and state welfare benefits, that is a different topic.

Seriously, who has a discussion about the federal government then cites payouts by states as a reason for limiting the growth in the federal government. This is why you have no credibility in the eyes of the majority of americans, or the world for that matter.

Dude, you have no idea what you're talking about. Federal spending on Food Stamps alone was $78 billions. That's not state-level benefits, that's federally funded welfare...

Then why in the graph that you posted does it say that both state and federal food aid totals $63BN. Is your own graph incorrect?

Next time you read a graph, check the horizontal axis - I find that sometimes the information there is useful. That's $63 bn in 2008. 2011 spend was $75+ bn.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

2/26/13

NorthSider:
evan1482:
NorthSider:
evan1482:
You can't have a discussion about federal taxes and then cite benefits taxed and paid out on the state level. TANF is the federal welfare program. If you want to talk about state taxes, who pays and doesn't, and state welfare benefits, that is a different topic.

Seriously, who has a discussion about the federal government then cites payouts by states as a reason for limiting the growth in the federal government. This is why you have no credibility in the eyes of the majority of americans, or the world for that matter.

Dude, you have no idea what you're talking about. Federal spending on Food Stamps alone was $78 billions. That's not state-level benefits, that's federally funded welfare...

Then why in the graph that you posted does it say that both state and federal food aid totals $63BN. Is your own graph incorrect?

Next time you read a graph, check the horizontal axis - I find that sometimes the information there is useful. That's $63 bn in 2008. 2011 spend was $75+ bn.

Dude you posted a chart containing state benefits to bolster your argument that the federal government is too big. Your argument is not internally consistent, and manipulative at best.

2/26/13

evan1482:
NorthSider:
evan1482:
NorthSider:
evan1482:
You can't have a discussion about federal taxes and then cite benefits taxed and paid out on the state level. TANF is the federal welfare program. If you want to talk about state taxes, who pays and doesn't, and state welfare benefits, that is a different topic.

Seriously, who has a discussion about the federal government then cites payouts by states as a reason for limiting the growth in the federal government. This is why you have no credibility in the eyes of the majority of americans, or the world for that matter.

Dude, you have no idea what you're talking about. Federal spending on Food Stamps alone was $78 billions. That's not state-level benefits, that's federally funded welfare...

Then why in the graph that you posted does it say that both state and federal food aid totals $63BN. Is your own graph incorrect?

Next time you read a graph, check the horizontal axis - I find that sometimes the information there is useful. That's $63 bn in 2008. 2011 spend was $75+ bn.

Dude you posted a chart containing state benefits to bolster your argument that the federal government is too big. Your argument is not internally consistent, and manipulative at best.

You need help tying your shoes in the morning also. LOL

You said Welfare spending was like $18B. Food Stamps is $80B alone. The fact that you cannot read a graph is pretty frightening.

2/26/13

evan1482:
Dude you posted a chart containing state benefits to bolster your argument that the federal government is too big. Your argument is not internally consistent, and manipulative at best.

This is ridiculous. Federal welfare spending was $717 billion in 2011 (that doesn't include the $210 billion in state spending). You seriously suggested that this number was $17 billion, I don't see how you're accusing us as being manipulative.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

2/26/13

NorthSider:
evan1482:
Dude you posted a chart containing state benefits to bolster your argument that the federal government is too big. Your argument is not internally consistent, and manipulative at best.

This is ridiculous. Federal welfare spending was $717 billion in 2011 (that doesn't include the $210 billion in state spending). You seriously suggested that this number was $17 billion, I don't see how you're accusing us as being manipulative.

Read the text of your own post:

Your graph includes both state and federal spending.

I said TANF was $17BN. That obviously does not include SNAP, medicaid or state spending. State taxes are taxed and spent at state level and include sales tax, etc. that many of the poor pay as well. Need to compare apples to apples.

If you take out medicaid from your graph, spending is essentially flat over the last 10-years leading up to 2008. Just refuting your graph as an accurate representation of your argument.

If anything, the eligibility requirements for SNAP and TANF have become more stringent over the past 2 decades, not less.

Perhaps my tone was a bit harsh, hyperbole didn't suit my point well.

Please proceed with your refutation.

2/26/13

evan1482:
Read the text of your own post:

Your graph includes both state and federal spending.

Dude, who cares? Sure, the graph includes state spending, but it's certainly not more "manipulative" than suggesting that federal spend is $17 billion. Federal spending in 2011 was $717 billion. Forget about the graph if you don't like it, please address the point. You're picking on the fact that state spending inflates the total by ~20%, how about the fact that you understated federal spending by 4,218%?

I said TANF was $17BN. That obviously does not include SNAP, medicaid or state spending.

Here's what you said:

If we are talking about welfare, i.e. TANF, these are the facts. The TANF budget was $17BNin 2011, not +$700BN. This is not a matter of opinion.

Your post implies that TANF and welfare are one an the same. Moreover, you compare the $17 billion number to the $700 billion number in attempt to make me look silly, as if those two numbers were worthy of comparison. Then you go on to say:

Where the fuck do you guys get this shit? You literally live in your own universe, where facts have no sway in shaping your opinion.

Next, you accuse me of data incongruency because of your inability to read the graph I posted.

Then you accuse me of intellectual dishonesty because the $700 billion number includes state spending. And while that statement is true, it's hardly "manipulative", especially in light of the fact that federal spending is currently greater than $700 billion.

Do you see why I might react this way to your post?

State taxes are taxed and spent at state level and include sales tax, etc. that many of the poor pay as well. Need to compare apples to apples.

OK. Apples to apples: you say federal welfare spending is $17 billion, while the real number is $717 billions. Care to explain the $700 billion delta?

If you take out medicaid from your graph, spending is essentially flat over the last 10-years leading up to 2008. Just refuting your graph as an accurate representation of your argument.

First off, why would we just toss out the largest government welfare program when we are talking about government welfare programs?

Second off, why focus on the last 10 years? What about the outlandish growth of spending since 1950??

If anything, the eligibility requirements for SNAP and TANF have become more stringent over the past 2 decades, not less.

If you read the text in the graph, you would realize that that's exactly what the graph is saying! "Even after AFDC was replaced by TANF, spending has increased 44%." Furthermore, what is your obsession with TANF, which is less than 3% of the total federal welfare spend?

Perhaps my tone was a bit harsh, hyperbole didn't suit my point well.

I don't mind harsh posts (it's a web forum, everyone automatically comes off as more of a dick than they really are). But when you're harsh, make sure that you're right. You're just not depicting the numbers honestly here.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

2/26/13

NorthSider:

If you take out medicaid from your graph, spending is essentially flat over the last 10-years leading up to 2008. Just refuting your graph as an accurate representation of your argument.

First off, why would we just toss out the largest government welfare program when we are talking about government welfare programs?

Because everyone's medical expenses have been skyrocketing over the last 15 years. This is a systemic problem with the healthcare system (cost of delivery going up), not entirely with medicaid. Although it is a huge issue, it largely has different drivers than the other pieces of your argument.

2/26/13

evan1482:
Because everyone's medical expenses have been skyrocketing over the last 15 years. This is a systemic problem with the healthcare system (cost of delivery going up), not entirely with medicaid. Although it is a huge issue, it largely has different drivers than the other pieces of your argument.

We're not digressing on a tangent about health care. Money is fungible, the $270+ billion we spend on Medicaid could be spent elsewhere.

Please address the point: there is a $700 billion delta between what you suggest welfare spending is and what we are saying welfare spending is.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

2/26/13

NorthSider:
evan1482:
Because everyone's medical expenses have been skyrocketing over the last 15 years. This is a systemic problem with the healthcare system (cost of delivery going up), not entirely with medicaid. Although it is a huge issue, it largely has different drivers than the other pieces of your argument.

We're not digressing on a tangent about health care. Money is fungible, the $270+ billion we spend on Medicaid could be spent elsewhere.

Please address the point: there is a $700 billion delta between what you suggest welfare spending is and what we are saying welfare spending is.

The most common definition of welfare refers to means-tested cash distributions, which in the US is called TANF. That is the only federal program which distributes cash to families that have been means-tested (and only for those either raising children or that are disabled, the US has no program for distributing cash to non-disabled peoples who are not raising children)
http://en.wikipedia.org/wiki/Welfare#United_States

If you have a different definition, and include all means-tested federal programs, then fine. That's not uncommon for those with your political persuasion.

2/26/13

evan1482:
The most common definition of welfare refers to means-tested cash distributions, which in the US is called TANF. That is the only federal program which distributes cash to families that have been means-tested

No... it's not. SSI/OAA is means-tested cash distributions on the order of $56 billion. The EITC is a means-tested cash distribution on the order of $55 billion.

If you have a different definition, and include all means-tested federal programs, then fine. That's not uncommon for those with your political persuasion.

Other than linking a Wikipedia article, can you give me any legitimate reason why we shouldn't consider non-cash means-tested welfare spending?? That's just absurd. You wouldn't compare two pay packages ignoring everything other than cash compensation, and there is no logical reason to ignore non-cash welfare spending (especially since there is a highly liquid black market for things like Food Stamps, making them as good as cash).

Look, no matter how you try to slice it, you're way off base here. It is patently ridiculous - and I do mean ridiculous - to think that the total U.S. welfare spending amounts to $17 billion. That's so incredibly intellectually dishonest that if you seriously hold that position, it's not really worth debating any further.

FWIW, I seriously doubt I have the "political persuasion" that you think I have.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

2/27/13

NorthSider:
evan1482:
The most common definition of welfare refers to means-tested cash distributions, which in the US is called TANF. That is the only federal program which distributes cash to families that have been means-tested

No... it's not. SSI/OAA is means-tested cash distributions on the order of $56 billion. The EITC is a means-tested cash distribution on the order of $55 billion. The Refundable Child Credit is a means-tested cash distribution on the order of $23 billion. The Make Work Pay Tax Credit is a means-tested cash distribution on the order of $14 billion.

If you have a different definition, and include all means-tested federal programs, then fine. That's not uncommon for those with your political persuasion.

Other than linking a Wikipedia article, can you give me any legitimate reason why we shouldn't consider non-cash means-tested welfare spending?? That's just absurd. You wouldn't compare two pay packages ignoring everything other than cash compensation, and there is no logical reason to ignore non-cash welfare spending (especially since there is a highly liquid black market for things like Food Stamps, making them as good as cash).

Look, no matter how you try to slice it, you're way off base here. It is patently ridiculous - and I do mean ridiculous - to think that the total U.S. welfare spending amounts to $17 billion. That's so incredibly intellectually dishonest that if you seriously hold that position, it's not really worth debating any further.

FWIW, I seriously doubt I have the "political persuasion" that you think I have.

(sorry in advance for the length of this post)

Are you really defining welfare to include tax credits for people with jobs ? That is so intellectually dishonest that if you seriously hold that position, it's not really worth debating any further.

Under your definition, then, the tax shield provided by interest for individuals with a mortgage would be considered "welfare". Hell, LT capital gains being taxed at a lower rate than regular income should be considered welfare. Sure, if you include tax credits and deductions, then 99% of the population and every corporation is on welfare.

For example, that $55BN EITC number you quoted - that is the amount of lost tax revenue due to the credit, NOT the amount paid out in addition to the lost tax revenue (although the tax burden CAN sometimes be negative). Again, as with all the tax credits you mentioned, these are people who are working and paying taxes, who are getting a credit / deduction that lowers their rate (although it can sometimes be negative, which is what I think you mean, but is not the number you are quoting). Do not conflate the two.

Also, I'm not saying non-cash distributions don't contribute to the deficit and don't need to be rationalized to some degree. I'm just saying that is not typically how "welfare" is defined by the general population. Maybe that's how Megan Kelly defines it, which is fine if thats the definition you want to use, sounds like its just a terminology issue.

Generally all the programs you've mentioned fall under the definition of the Social Safety Net, along with unemployment insurance, foster care programs for abused kids, etc. which are not usually considered welfare either (sounds like you would). Again, welfare is generally defined as giving cash to poor people who have no income, which in the US is the TANF program (confirmed by wikipedia).

I'll give you SSI though. Forgot about that one. Not sure I would suggest the first place to make reductions be the program that pays for the poor disabled elderly who cannot work to have food and shelter, though. That may be the very last thread of the safety net.

2/27/13

evan1482:
Are you really defining welfare to include tax credits for people with jobs ? That is so intellectually dishonest that if you seriously hold that position, it's not really worth debating any further.

Under your definition, then, the tax shield provided by interest for individuals with a mortgage would be considered "welfare". Hell, LT capital gains being taxed at a lower rate than regular income should be considered welfare. Sure, if you include tax credits and deductions, then 99% of the population and every corporation is on welfare.

Oh my goodness. Come on man. I'm not defining every tax shield as a welfare program, and you're totally misconstruing my argument. I'm frankly getting tired of dealing with this nonsense. I should have seen this coming.

Means-tested tax credits are absolutely a form of welfare. Are capital gains taxes means-tested? No. Is the interest tax shield means-tested? No. Is the EITC means-tested? Yes. Ergo, the EITC is designed to provide relief to people who have reduced means of supporting themselves. That is welfare.

For example, that $55BN EITC number you quoted - that is the amount of lost tax revenue due to the credit, NOT the amount paid out in addition to the lost tax revenue (although the tax burden CAN sometimes be negative). Again, as with all the tax credits you mentioned, these are people who are working and paying taxes, who are getting a credit / deduction that lowers their rate (although it can sometimes be negative, which is what I think you mean, but is not the number you are quoting). Do not conflate the two.

LOL @Anonymous MonkeyLost tax revenue". That's a wonderful euphemism. I suppose then, that you wouldn't mind if the government took away your $6k standard deduction next year? After all, that's not actually cash in your pocket, that's just "lost tax revenue".

How many times do I have to say that money is fungible? Not having to pay the government for something that everyone else does means that you get more money in your pocket than the next guy. By your ludicrous definition, if I were to tax you at a 50% effective rate, then immediately refund you all of that money, I would be giving you welfare; however, if I gave you a special tax credit that completely eliminated your tax burden based on your financial means, I would just be "losing tax revenue" and thus wouldn't be providing welfare.

Come on, you don't honestly believe this.

Also, I'm not saying non-cash distributions don't contribute to the deficit and don't need to be rationalized to some degree. I'm just saying that is not typically how "welfare" is defined by the general population. Maybe that's how Megan Kelly defines it, which is fine if thats the definition you want to use, sounds like its just a terminology issue.

Generally all the programs you've mentioned fall under the definition of the Social Safety Net, along with unemployment insurance, foster care programs for abused kids, etc. which are not usually considered welfare either (sounds like you would). Again, welfare is generally defined as giving cash to poor people who have no income, which in the US is the TANF program (confirmed by wikipedia).

"Welfare programs available in the United States include: Medicaid, Food Stamps, Supplemental Security Income (SSI), Housing and Urban Development (HUD) programs, Temporary Assistance for Needy Families (TANF), Head Start, Work Study, and Medicare. Social Security, often times called an entitlement program, is also considered one of the welfare programs in the U.S.."
http://www.welfareinfo.org/state/

Stop denigrating arguments by throwing out the names of political pundits. Anyone can play this petty game:

"[insert random argument here]. I'm sure Rachel Maddow believes what you believe, but everyone else believes otherwise."

Anybody who does not consider, for instance, Food Stamps a form of welfare is just wrong. This isn't a matter of opinion, it doesn't make a difference which political pundit you get your news from.

Please provide me with a single legitimate argument (other than an appeal to authority or some "popular belief") as to why means-tested non-cash government programs would not be considered welfare.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

2/27/13

NorthSider:
LOL @Anonymous MonkeyLost tax revenue". That's a wonderful euphemism. I suppose then, that you wouldn't mind if the government took away your $6k standard deduction next year? After all, that's not actually cash in your pocket, that's just "lost tax revenue".

How many times do I have to say that money is fungible? Not having to pay the government for something that everyone else does means that you get more money in your pocket than the next guy. By your ludicrous definition, if I were to tax you at a 50% effective rate, then immediately refund you all of that money, I would be giving you welfare; however, if I gave you a special tax credit that completely eliminated your tax burden based on your financial means, I would just be "losing tax revenue" and thus wouldn't be providing welfare.

Come on, you don't honestly believe this.

Dude, come on you are being ridiculous.

Take a look at the site that you quoted:
http://www.welfareinfo.org/corporate/

They define welfare to include corporate welfare, which is "financial assistance, tax advantages, or other support given to corporations and other business entities by the United States government. Unlike welfare payments given to individuals, corporate welfare system is not intended to prevent poverty or raise the standard of living. Instead the federal government awards payments to specific industries or companies in the form of subsidies, grants, contracts, and other aid."

Why wasn't this included in your chart showing the growth of welfare over the last 45 years? Do you think it would have grown by more or less than 13x?

For what its worth, I don't consider this a form of welfare, but based on your argument and the references you provided, you do? Are you being internally consistent or do you cherry pick data points to conform to your pre-existing beliefs?

So what is it? Lost tax revenue or welfare? I'd argue most people would side with me.

2/27/13

evan1482:
They define welfare to include corporate welfare, which is "financial assistance, tax advantages, or other support given to corporations and other business entities by the United States government. Unlike welfare payments given to individuals, corporate welfare system is not intended to prevent poverty or raise the standard of living. Instead the federal government awards payments to specific industries or companies in the form of subsidies, grants, contracts, and other aid."

Why wasn't this included in your chart showing the growth of welfare over the last 45 years? Do you think it would have grown by more or less than 13x?

Good god, man. One more post like this and I'm done arguing with you.

What is mentioned in this article is close to the opposite of welfare: it's straight up crony capitalism that is enabled by a bloated government that has the power to line the pockets of any company it so selects. Most of the time, this money benefits only the richest, largest and most politically connected corporations (which is obviously adverse to the definition of "welfare"). Closing these dim-witted tax loopholes should be atop any legitimate government's agenda. But you know damn well that this has absolutely zero relevance to what we've been discussing in the last few posts. If this isn't a half-baked attempt at a misdirection, I don't know what is.

I think that you're well aware that you and I have not been discussing anything related to corporations over the past few posts. If you were seriously confused by that, then I think we're done.

In your next post, either reply to the relevant questions that I have posed throughout the last few messages which you have conveniently ignored, or we can call this quits. I'll list them here, to make it easy for you:

1) Can you give me any legitimate reason (other than your continuous abstract references to "most people" and random authorities) why we shouldn't consider non-cash means-tested government aid welfare spending? Please do not reference another authority, claim that "most people agree with you" or any other form of non-answer. Answer with logic and reasoning as to why these would not be included in a working definition of the word "welfare".

2) Do you honestly agree that if I were to tax you $1,000 and give it right back to you, this would be considered "welfare spending", but if I give you a tax credit that reduces your tax burden by the same $1,000 instead of taking it from you, it would be "lost tax revenue" and wouldn't count as welfare spending? If so, please explain the distinction between the two.

3) Would you agree that a $70+ bn means-tested government assistance program like Food Stamps is a form of welfare? If not, please explain the distinction between TANF (which you agree is welfare spending) and Food Stamps.

4) (if applicable) Please explain how you would classify the $700 billion (strike that, $644 billion after you conceded SSI/OAA) delta between your definition of welfare and mine. What do you call that spending, if not welfare?

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

2/27/13

evan1482:
Misreads graph. Cites numbers incorrectly and attacks a argument whose structure and execution was simply superior...

Mr. evan1482, what you've just said is one of the most insanely idiotic things I have ever heard. At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone in this thread is now dumber for having listened to it. I award you no points, and may God have mercy on your soul.

I really hope your aren't a consultant dude. You got OWNED. Just move on...

NorthSider:
This is how math and percentages work. See this completely straightforward representation of data in a graphical form. Kindly note that the data set ends in the year 2008. Please let me know if you have any questions.

That's how it's done.

2/26/13

I posted facts above. Are food stamps for the poor? If so then it counts. $75B annual for food stamps. Is Medicaid for the poor? Then it counts.

Simply because your are myopic and do not understand what you are talking about doesn't excuse you. We are discussing aid for the poor, or broadly described as "welfare". TANF is but one part of it.

But continue displaying your lack of being informed on this topic which you attempted to interject yourself into.

2/26/13

LMAO

The chart stops in 2008.

Hahahah

2/26/13

Can't do math and cannot analyze a chart. Holy shit.

Fed spend $80B in food stamp spending in 2012.

2/26/13

I frankly don't see where you are getting state spending.
http://www.scribd.com/doc/110366590/Spending-for-F...

This report indicates that it is Federal alone.

2/26/13

Federal Welfare Spending in 2010-11 = $733B

2/27/13

Wow, this has gotten off topic fast. Bottom line, 50% of America isn't doing all the work over the long haul while the other half just always takes, however you parse it out. Here's another chart everyone can argue over:
http://en.wikipedia.org/wiki/File:Fy2010_spending_...

I kind of chuckle when I hear that the banks shouldn't have been bailed out. It's like saying they shouldn't have tanked. But they did and it's done, so lamenting the case is pissing in the wind. The banking industry stopped working, so they got temporarily taken over in some cases and went on the dole in other cases, it's pretty simple. It's not unlike when a gov't entity stops working and is privatized: people tend to do what works, especially in the US. Realistically, was the US supposed to endure a potentially decades long complete flatline of the economy in order to maintain some almost hipsterishly obscure notion of "libertarianism"? Not happening. Get over it.

Seeing the banks and government become progressively more interconnected is worrisome because yes, there could come a time where the government doesn't have the resources to stop a crash. It's one thing for a bank to fail, it's another for a lot of banks to fail....it's a completely different creature if the whole system is going to tank. Of course the government is going to do something in that case, a whole civilization can't be crippled because one sector is fucked, that's absurd. We see it in smaller countries when festering local problems or overarching global money problems kill an entire economy, and given the globally interconnected financial developments, it's conceivable that the day may come where a financial panic can deep six the US itself.

I think that's something that should be examined. People don't want governments involved and I get that, but grow up Peter Pan, Count Chocula, they WILL get involved when things get out of control and it's better to address things like this ahead of time instead of just beating the "we want to do whatever we feel" drum. If you look at the government as some alien entity that's disconnected from everything else, then yeah your outlook will be poor in this respect. But if you look at the government for what it is, people participating in the public decision making process, then raising an issue that matters will be heard in some places and then traction can build.

And it's not like the government is the only one that can do something about this. I'm surprised the banking industry hasn't formed a consortium of opinion to address this very question: "What happens if the day comes when no one can prevent us from destroying ourselves? What do we do? And how do we not go there in the first place?" This seems a common sense thing to do and hasn't been done. It's not like financial panics are a mystery, we know exactly what works and what doesn't at this point in history. Would it kill the big banks to get together with the openly stated purpose of discussing "How do we plan ahead to make sure this doesn't happen again?" Until they do, they neglect that their irresponsibility becomes everyone's problem in a crisis, and they kind of force the government to be the one who fixes things

Get busy living

2/27/13

UFOinsider:
Wow, this has gotten off topic fast. Bottom line, 50% of America isn't doing all the work over the long haul while the other half just always takes, however you parse it out. Here's another chart everyone can argue over:
http://en.wikipedia.org/wiki/File:Fy2010_spending_...

I kind of chuckle when I hear that the banks shouldn't have been bailed out. It's like saying they shouldn't have tanked. But they did and it's done, so lamenting the case is pissing in the wind. The banking industry stopped working, so they got temporarily taken over in some cases and went on the dole in other cases, it's pretty simple. It's not unlike when a gov't entity stops working and is privatized: people tend to do what works, especially in the US. Realistically, was the US supposed to endure a potentially decades long complete flatline of the economy in order to maintain some almost hipsterishly obscure notion of "libertarianism"? Not happening. Get over it.

How can you purport to know what would have happened had the banks not been bailed out? On the contrary, I would submit to you that we would have recovered more quickly had we let the entire system be gutted and rebuilt. That's why discussing whether or not we should have bailed out the banks is relevant: many people seem to blindly believe that we would have had a 20 year depression (which is just ludicrous to me) if we let several large banks fail.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

2/27/13

NorthSider:
UFOinsider:
Wow, this has gotten off topic fast. Bottom line, 50% of America isn't doing all the work over the long haul while the other half just always takes, however you parse it out. Here's another chart everyone can argue over:
http://en.wikipedia.org/wiki/File:Fy2010_spending_...

I kind of chuckle when I hear that the banks shouldn't have been bailed out. It's like saying they shouldn't have tanked. But they did and it's done, so lamenting the case is pissing in the wind. The banking industry stopped working, so they got temporarily taken over in some cases and went on the dole in other cases, it's pretty simple. It's not unlike when a gov't entity stops working and is privatized: people tend to do what works, especially in the US. Realistically, was the US supposed to endure a potentially decades long complete flatline of the economy in order to maintain some almost hipsterishly obscure notion of "libertarianism"? Not happening. Get over it.

How can you purport to know what would have happened had the banks not been bailed out? On the contrary, I would submit to you that we would have recovered more quickly had we let the entire system be gutted and rebuilt. That's why discussing whether or not we should have bailed out the banks is relevant: many people seem to blindly believe that we would have had a 20 year depression (which is just ludicrous to me) if we let several large banks fail.


LOL that's what happened last time there was a crash. The way things were dealt with this time around were highly imperfect, but not a complete disaster like the 1930's. If this is any indication that we as a country have learned from history, then by extension the economy should continue to recover and will enter a sustained growth period leading to a massive reduction in the size of the government over the next couple of decades...

Get busy living

2/27/13

UFOinsider:
LOL that's what happened last time there was a crash. The way things were dealt with this time around were highly imperfect, but not a complete disaster like the 1930's. If this is any indication that we as a country have learned from history, then by extension the economy should continue to recover and will enter a sustained growth period leading to a massive reduction in the size of the government over the next couple of decades...

Even granting that it's fair to compare circumstances in 2008 to the 1930s (dubious at best), we hardly allowed the market to recover following the market collapse. Quite similarly, far from guaranteeing a speedy recovery, our massive governmental rescue plan (the New Deal) prolonged the depression. Also comes as no surprise that the market collapse was predicated on almost incomprehensible Fed policy.

Moreover, let's assume that you're somehow correct, and merely having the government spend our money for us averted certain doom in 2008. It's not as though government intervention changed anything structurally. In the best case scenario, intervention merely delayed the inevitable collapse to which you're referring.

Even the government can't have a free lunch.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

2/26/13

LOL I didn't realize the $80B in food stamps was going to rich people. Get real dude. You horribly lost this argument and each reply is just making you look worse.

2/27/13

Massive reduction in the size of government? I pray you are correct.

2/27/13

I wonder whether sequestration will factor into your analysis on the 80 bps spread and comp levels. -____-

3/2/13

What I don't understand is why Republicans make such a fuss about the 47% of people who pay no federal income tax, but don't make the same fuss when big corporations end up paying no federal tax while reaping billions of dollars in profits. You need to be consistent. The people who had no federal liability most likely have low incomes and too much responsibility. They probably have many dependents, and thus, after taking out all their exemptions, end up paying nothing. Basically, they are living paycheck to paycheck, barely scraping by. It is not like the personal exemptions is high at all ($3,900 for each dependent). Corporations on the other hand, make a shit lot of money, and thanks to a lot of loopholes placed on the tax code thanks to their lobbyists, end up paying zero. And this does not cause a revolt in the conservative party. Are you kidding me? So grandma paying zero is bad, but GE paying zero is fine? Aren't corporations people too? What we have in this country is a huge income inequality problem. And the 2008 recession hit harder the lower class, making the problem even bigger. Just look at the following map graph:
http://en.wikipedia.org/wiki/List_of_countries_by_...

How pathetic for the US. Compared to Europe, even Canada, the US is way behind.

3/2/13

andres17:
What I don't understand is why Republicans make such a fuss about the 47% of people who pay no federal income tax, but don't make the same fuss when big corporations end up paying no federal tax while reaping billions of dollars in profits. You need to be consistent.

Goodness, it is consistently annoying when people assume that if you don't support a bloated welfare government, you must be a Republican. Furthermore, if you took the time to actually read the responses in this thread, you'd realize that we despise loopholes for Fortune 500 companies just as much as loopholes for the wealthy. Our tax code is onerous and ridiculous. It is only the Democrats who seem to be insistent on the idea that we should continue with the system we have in place.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

3/4/13

NorthSider:
andres17:
What I don't understand is why Republicans make such a fuss about the 47% of people who pay no federal income tax, but don't make the same fuss when big corporations end up paying no federal tax while reaping billions of dollars in profits. You need to be consistent.

Goodness, it is consistently annoying when people assume that if you don't support a bloated welfare government, you must be a Republican. Furthermore, if you took the time to actually read the responses in this thread, you'd realize that we despise loopholes for Fortune 500 companies just as much as loopholes for the wealthy. Our tax code is onerous and ridiculous. It is only the Democrats who seem to be insistent on the idea that we should continue with the system we have in place.

Goodness, that comment was not targeted to you. Is there anything that is not true with my comment? Didn't Republicans, in the last elections, attacked the "47 percent"? While not mentioning the fact that lots of corporation are in "welfare"? And you should get out of the closet and admit to being a Republican. Nothing wrong with that.

3/4/13

andres17:
Goodness, that comment was not targeted to you. Is there anything that is not true with my comment? Didn't Republicans, in the last elections, attacked the "47 percent"? While not mentioning the fact that lots of corporation are in "welfare"? And you should get out of the closet and admit to being a Republican. Nothing wrong with that.

1) I am not even close to being a Republican.
2) Mitt Romney ran on a platform of eliminating tax loopholes and lowering rates. Granted, he did a terrible job of articulating that plan and was incredibly vague. He led an awful campaign.
3) What relevance do to the views of the Republican Party have to this thread?

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

3/2/13

andres17:
How pathetic for the US. Compared to Europe, even Canada, the US is way behind.

Yeah!! Why don't we convert to the European system so that we can pay higher income taxes, with a greater percentage of people on the dole, supported by governments on the brink of financial ruin. That would make everything better!

All of this is predicated on the concept that income inequality is bad. In a free market system, all that income inequality likely indicates is that your country has a great number of extremely successful people who have put far more value into the economy than they have taken out of it.

Furthermore, almost every study of income inequality in the United States that I have read greatly exaggerates the level of inequality by relying on absurd metrics like household income, which distort income threasholds.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

3/4/13

NorthSider:
andres17:
How pathetic for the US. Compared to Europe, even Canada, the US is way behind.

Yeah!! Why don't we convert to the European system so that we can pay higher income taxes, with a greater percentage of people on the dole, supported by governments on the brink of financial ruin. That would make everything better!

All of this is predicated on the concept that income inequality is bad. In a free market system, all that income inequality likely indicates is that your country has a great number of extremely successful people who have put far more value into the economy than they have taken out of it.

Furthermore, almost every study of income inequality in the United States that I have read greatly exaggerates the level of inequality by relying on absurd metrics like household income, which distort income threasholds.

Why do you assume that just because there's some European countries that are going broke, that their system is a failure? What about the Europeans countries that are actually not broke? What about Finland, Denmark, Sweden, Luxemburg, Switzerland, Norway, Austria, Germany, Belgium? Do they not exist in your vocabulary? I can venture to say that in all those countries, things are better than in the good old USA.

3/4/13

andres17:
Why do you assume that just because there's some European countries that are going broke, that their system is a failure? What about the Europeans countries that are actually not broke? What about Finland, Denmark, Sweden, Luxemburg, Switzerland, Norway, Austria, Germany, Belgium? Do they not exist in your vocabulary? I can venture to say that in all those countries, things are better than in the good old USA.

And what system do you suppose every one of the countries you listed implemented to achieve their status as wealthy, developed economies?

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

3/2/13

Income inequality is good. How pathetic for the rest of the world. And how sad for you that you look to the government to equalize life for you.

3/4/13

TNA:
Income inequality is good. How pathetic for the rest of the world. And how sad for you that you look to the government to equalize life for you.

TNA,

Actually, my political positions are not based on what is best for me. If it was, I would have voted for the Republican party. I actually am in the top 20%, and yes, I do pay a lot of taxes. But that does not change the fact that I vote for the best interest of the nation, not my own. I am doing pretty well without the governments help. How you just assume everyone who has the liberal ideology is a bum is beyond me.

3/4/13

andres17:
TNA,

Actually, my political positions are not based on what is best for me. If it was, I would have voted for the Republican party. I actually am in the top 20%, and yes, I do pay a lot of taxes. But that does not change the fact that I vote for the best interest of the nation, not my own. I am doing pretty well without the governments help. How you just assume everyone who has the liberal ideology is a bum is beyond me.

Nobody assumes this.

It's abundantly clear that the system that is in the best interests of the nation is a free enterprise system, with a limited government and free trade. There exists no example of a country that substantially raised its populace's standard of living without a free enterprise system and largely free trade.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

3/4/13

NorthSider:
andres17:
TNA,

Actually, my political positions are not based on what is best for me. If it was, I would have voted for the Republican party. I actually am in the top 20%, and yes, I do pay a lot of taxes. But that does not change the fact that I vote for the best interest of the nation, not my own. I am doing pretty well without the governments help. How you just assume everyone who has the liberal ideology is a bum is beyond me.

Nobody assumes this.

It's abundantly clear that the system that is in the best interests of the nation is a free enterprise system, with a limited government and free trade. There exists no example of a country that substantially raised its populace's standard of living without a free enterprise system and largely free trade.

TNA assumed that when he wrote "And how sad for you that you look to the government to equalize life for you.". I am not looking for the government to equalize anything for me per se. But it is clear that this country has a growing problem with income inequality. And the reason I think it is in my best interest to solve it is because when the majority are poor, they tend to chop the heads of the minority. Plus it is the right thing to do. In a country as rich as the USA people should not be barely making a living, while a few reap the rewards. We will have to agree to disagree on this.

3/4/13

andres17:
NorthSider:
andres17:
TNA,

Actually, my political positions are not based on what is best for me. If it was, I would have voted for the Republican party. I actually am in the top 20%, and yes, I do pay a lot of taxes. But that does not change the fact that I vote for the best interest of the nation, not my own. I am doing pretty well without the governments help. How you just assume everyone who has the liberal ideology is a bum is beyond me.

Nobody assumes this.

It's abundantly clear that the system that is in the best interests of the nation is a free enterprise system, with a limited government and free trade. There exists no example of a country that substantially raised its populace's standard of living without a free enterprise system and largely free trade.

TNA assumed that when he wrote "And how sad for you that you look to the government to equalize life for you.". I am not looking for the government to equalize anything for me per se. But it is clear that this country has a growing problem with income inequality. And the reason I think it is in my best interest to solve it is because when the majority are poor, they tend to chop the heads of the minority. Plus it is the right thing to do. In a country as rich as the USA people should not be barely making a living, while a few reap the rewards. We will have to agree to disagree on this.

1) It is called Democracy. In autocratic countries they behead people. In the US the elect new ones.

2) It isn't "right" it is what you think is right. No where in the Bill of Rights does it guarantee anything related to income equality. People in the US have the freedom to make whatever life they want for themselves.

Furthermore, all you are advocating is the government to pick winners and losers. Government has caused many of these problems. People who are barely making ends meet many a time are in that situation because of their own fault. Whether it is drugs, children out of wedlock or at a young age, dropping out of school, etc. It is THEIR choice.

If you feel so strongly, fine. Volunteer, donate, do what you want. But when you vote to elect people who force your opinions onto myself and others you go beyond doing good and being a dictator.

And you know who gets their head chopped off? Kings, Queens, Dictators and tax collectors. Those who infringe on the rights of free men and women.

3/4/13
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