What We Paid For

A bloated transfer payments system and a rapidly vanishing workforce...

(Source: Getty Images)

Bill Bonner, reckoning today from Youghal, Ireland...

This week we’ve been looking at the “culture of work.”

We’ve seen that over time people want to move to join the elite – the people who work without getting their clothes dirty.

We’ve seen, too, that having more administrators, controllers, regulators, elite hangers-on, meddlers, and finger-waving know-it-alls is not necessarily a good thing. Instead of helping move things along more swiftly, they slow things down… misallocate time and resources… reward cronies… push pet projects… and fund jackass ‘investments’ with the country’s hard-earned savings.  

Yes, the upper classes are filling up with idle moochers or trouble-making busy bodies. But today, we turn to the others – the 90% of the population who schlep, tote, and bus to keep us fed, clothed, housed, and entertained. Have they been corrupted too? The answer is ‘yes.’ And as usual, our favorite dysfunctional society is way ahead of us. Jared Dillian of the DailyDirtnap:

The labor force participation rate in Argentina dropped to 38.4% in 2020, during the pandemic. Now it stands at 46.7%. A labor force participation rate below 50% means that less than half the country is working—and supporting the other half that is not. It enlarges the welfare state and creates generations of institutionalized dependency that is difficult to reverse. Generations of Peronism have destroyed the culture of work that once existed in Argentina. The country’s problems aren’t simply economic, a matter of a rapidly depreciating currency and high inflation. They’re also deeply rooted in cultural norms around work.

Happily, the US is not quite there…yet. There are approximately 257 million adults over 18 in the country. About 150 million are employed – or around 60%.  

That leaves a little more than 150 million adults with no visible means of support.   How do they pay the rent and their Netflix subscriptions?

Transfer payments! 

“Transfer” – what a marvelously lobotomized description. Value-free. Judgment-free. Information-free. On the transferee end, people are not criminals… who have knowingly received stolen goods. Nor are they objects of pity and shame for being “on the dole.” Nor should they be embarrassed by being too gimpy, too dumb, too old or too fat to work. No...no… Much of what is transferred is called an “entitlement,” as if they had a right to the money.  

Entitlements… welfare… Medicare… Medicaid… unemployment…

“Disability…” – with these “transfer payments” millions of people are bought off... pacified… idled by small amounts of public charity and a large dose of government larceny. Peter is paid. But the money must be taken from Paul.

A Genuinely Disabled System

The amounts paid to the poor and middle classes are trivial – at least, compared to the $35 trillion transfer to the wealthy via the Fed. But the effect is huge. A stimmie check here… a disability payment there… a Fannie Mae subsidized mortgage… soon you’re talking irresistible temptation… and undying loyalty to the grand viziers who provided it.  

And then, instead of tending their flocks and fields, the transferees can pass their long, slow days in front of TV and social media, where the elite make sure they don’t get any ‘misinformation’ that might call ‘the system’ into question.  

In the early 70’s, about one out of every ten dollars of income came from government-managed ‘transfers.’ Now, it is one out of every three dollars. In gross dollar terms, that’s an increase from around $30 billion to over $3 trillion.

There are now some 80 million people – up from 20 million in the 1980s – receiving free meds from the Medicaid program. The roster of Medicare and Obama Care beneficiaries adds up to some 65 million. There are 40 million getting ‘food stamps.’  

Back when it was set up in 1935, the ‘disability’ part of the Social Security system was meant to give support to people who couldn’t work. And back then, most work was physical. People who couldn’t see or couldn’t walk were practically unemployable.  

The minimum payment in 1936 was just $10 a month. Now the average is $1,385 per month, with top recipients getting as much as $3,345.

And now there are said to be 8 million people – 5 times as many as in 1970 – collecting SSDI benefits. This is remarkable in itself, since it’s much harder to be genuinely disabled now than it was 50 years ago. Today, millions of people ‘work’ in comfortable chairs, using only their fingertips. Advances in medical science and technology have overcome many former disabilities. Now, you can talk to your computer… and it will answer you. And ‘voice generators’ will transform written text and numbers into spoken words.

Tipping the Scales

If the standards of 1970 were applied today, there would be fewer, not more, disabled people.

But standards have changed. Now, psychological, mental, and self-inflicted infirmities fatten SSDI rolls. A Baltimore politician even suggested that being Black should be enough to get onto disability rolls.

Obesity is in itself not a sufficient cause for a ‘disability’ rating, but it can be combined with other impairments to tip the scales in your favor. A skinny person with a bad knee might still be able to get around. A fat one with the same joint issue might be ‘impaired.’

The incentives are perverse. If you could get $3,345 per month simply by eating more desserts… and being unable to work… why not?

And of course… the elite are there to help. Here’s a typical ad:

It's Time to Get the Benefits You Deserve

Suze Orman shares how to get disability benefits in less time—with no out-of-pocket costs

‘You get what you pay for,’ said Milton Friedman famously. America spent an estimated $60 trillion on transfer payments from 1970 to 2020. What it got was approximately 90 million more people who do not work.

But wait… then… what do they do? What happens to them? And what happens to the country that harbors them?

More to come…

Regards,

Bill Bonner

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