Daily Archives: 2 June 2017

“About That ‘Gutting the Safety Net'”

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That’s the title of a recent Wall Street Journal op-ed.

Critics are accusing President Trump’s 2018 budget of “gutting the safety net” with cuts to food stamps and disability insurance. In reality, the White House is proposing long-needed reforms that would fix a dysfunctional disability system that traps Americans in dependency.

The editor is right as far as he goes, but he doesn’t go far enough.  It isn’t just our social security disability system that is a welfare trap, it’s our entire welfare system.

There is no incentive for folks to get off welfare; in fact, there is a “welfare cliff” designed in that throws up terrible obstacles blocking folks from getting off welfare.  Those obstacles are more concretely illustrated by this:

The less-noticed harm is that a mere 1% of beneficiaries return to work every year….

One reason so few return to the labor force is that payments are essentially a tax on work. A 55-year-old who previously earned about $30,000 a year at work could receive more than $15,000 a year in disability payments, plus health-care benefits and perhaps other cash transfers such as food stamps. That means any job would have to pay more than what he loses in subsidies….

It’s not a safety net.  It’s the Progressive-Democratic Party’s seine, with which it seeks to trap our poor so they can continue trading handouts for votes.

On Whose Side Are These Guys?

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There is a move afoot in Congress to “overhaul” Dodd-Frank, at least to the point of adjusting the threshold size that banks would need to exceed in order to become subject to strict rules on “the capital, mergers, and other business” in which Government will permit these otherwise private enterprises to engage.  Under the present threshold of $50 billion or more in assets, some 37 financial institutions are subject to such Government diktat.

The trick will be reaching a compromise on what should come next.

Republicans tend to favor either setting a threshold of between $250 billion and $500 billion, or basing the designation on a bank’s riskiness rather than on its size. That new range would leave around a dozen or as few as a half-dozen banks facing stricter regulation.

No, there must be no compromise. Strict elimination of Dodd-Frank should come next.

Worse, raising the threshold would, indeed, shrink the number of institutions subject to Government regulation. That, though, would make it easier for Government to expand to completion its control over these institutions.

That’s the stuff of corporate fascism: Government control over what a putatively private enterprise will be allowed to produce and how much of it that enterprise will be allowed.  It’s dismaying that Republicans would propose such an affront to free enterprise and limited government.