That great phrase was coined by the late Jack Kemp, who believed that growth and opportunity for all is the answer to poverty. In fact, Kemp believed it was the answer to all things economic. And he was right. The best anti-poverty program is the one that creates jobs. The answer to large budget deficits? Grow the economy, create jobs, watch incomes rise, and let the tax revenues come rolling in.

Partly from Jack Kemp’s work, and partly from his own experience, Ronald Reagan believed the same thing. He knew that growth is the single best solution for our economic ailments. And neither Reagan nor Kemp saw the world in terms of specific income classes or categories. They looked at the whole economy and realized that everyone is tied together. Dragging down the top earners will not help the middle class. And providing an ever larger safety net will not solve poverty. Reagan believed in the safety net, and maintained it. But he knew it was a stop-gap, not a solution.

Does Mitt Romney understand this?

The worry stems from Romney’s ill-advised statement this week. He said, “I’m not concerned about the very poor. We have a safety net there. If it needs repair, I’ll fix it.” That raises doubts as to whether he understands the Reagan-Kemp model. Perhaps he does. But he will have to tell us more.

(more…)

Charles Sykes is a longtime Milwaukee talk-radio host and the prolific author of a number of books that helped to shape my personal political worldview, including 1988’s eye-opening “Profscam,” and 1993’s “A Nation of Victims,’ two works as timely today as they were decades ago.

“A Nation of Moochers: America’s Addiction to Getting Something for Nothing” (St. Martin’s Press) was just released, and the fact that I’m writing this at the very moment President Barack Obama is announcing yet another government plan (his fourth, I think) to “bail out” those “victims” who bought homes they couldn’t afford, makes this informative and engaging page-turner feel about as urgent and timely as any author could hope for.

What you need to know up front is that “Moochers” isn’t an attack on the poor or needy or, for that matter, a specific political party. In fact, from beginning to end, Sykes makes clear that as a country we have an obligation to feed the hungry and offer shelter to the homeless. Moreover, he isn’t even targeting a particular group, which would be impossible without a sawed-off shotgun anyway, because America’s moochers come from every level of our society.

What Sykes is targeting is a mentality, a dangerous and un-American mentality that infects almost every aspect of our culture, and one that is currently being bred into our children by those on both the left and right who are empowered by fomenting and excusing the dependence, greed, and selfishness of others. From corporate welfare to school lunches for the well-to-do to Wall Street bailouts to paying millionaires not to grow crops to tax breaks for Hollywood gajillionires to unending unemployment benefits to disaster relief for those who haven’t suffered disasters to TARP, and finally, to the shameless who walk away from mortgages they can afford to pay — what Sykes is exposing is that we are on the march to becoming Greece. Not just a European welfare state, but the kind of welfare state where the populace has been engineered by a nanny state to riot at the very thought of not being able to mooch the life to which they have become accustomed.

(more…)

Wednesday night, the House of Representatives overwhelmingly passed H.R.3567; The Welfare Integrity Now for Children and Families Act of 2011; which makes it illegal to use an EBT card in a strip club, liquor store or casino. The concern began, shortly after welfare recipients were issued funds electronically through ATMs, when Welfare Reform passed in 1996. Since then there has been a disturbing trend of welfare not being spent on the things people think welfare should be spent on.

And I don’t understand that concern. It is the theory of most Democrats that giving money to people stimulates the economy. It should be of no concern to anyone whether that money is used to stimulate patrons of a strip club, liquor store owners, or casino magnates (who BTW are often HUGE political contributors).

The bill is almost completely futile. It won’t insure that welfare money is not spent at a strip club; it only means that the ATM at the gas station across the street from the strip club is going to see a lot more traffic.

This is just the kind of government bias, that gives legitimate business a bad name. Certainly those girls are working as hard as any SEIU employee; whose pensions were paid out of stimulus funds, while they protested in Wisconsin. Money spent on bikini wax, cover stick, and glittery lingerie will trickle down through the economy just like any other stimulus package.

(more…)

I’ve written a couple of times about the Food Stamp program, citing ridiculous examples of waste, fraud, and abuse. These include:

• Using food stamps to buy luxury coffee at Starbucks.
• Buying steaks and lobster with food stamps.
• The Obama Administration rewarding states that sign up more food stamp recipients.
• Proposals to make it easier to use food stamps at fast food restaurants.
• College kids scamming the program for handouts.
• New York City giving food stamps to newly released prisoners and running foreign-language ads encouraging more people to sign up for the program.

As a taxpayer, I get upset about these examples. But as a public policy economist, I’m much more worried about the fiscal and economic impact of the program.

As a human being, though, my primary concern is the way redistribution saps the spirit of self reliance and traps people into lives of dependency. That’s the very first point I make in this debate on CNBC.

By the way, my opponent in the debate is Jared Bernstein, who is infamous for being the co-author of the Obama Administration claim that enacting the s0-called stimulus would keep the unemployment rate from rising above 8 percent.

I’ve had lots of fun mocking that claim. Every couple of months I post Jared’s predictions and compare them to the real-world results.

(more…)

In a FOX News interview on Monday, Rep. Allen West (R-FL) defended former Speaker Newt Gingrich’s contention that President Barack Obama is the best “food stamp president” America has ever seen, a charge that some Democrats have argued is laced with racial undertones.

There is no race code. It’s a fact. Since President Obama has been in the Oval Office, you’ve seen a 41 percent increase in the food stamp recipients in the United States of America.  We have a president that’s making more American victims rather than victors.

Rep. West also pointed out that Mr. Obama’s failed economic policies have driven many more Americans into poverty:

We also have a 16 percent increase in Americans on the poverty roll — 6.4 million more Americans are on poverty since President Obama took office.

The Florida congressman’s comments come as Republican efforts led by Sen. Jeff Sessions (R-AL) are underway to increase oversight of the food stamp program (officially known as the Supplemental Nutrition Assistance Program–or SNAP) amid concerns that there may be what the Wall Street Journal has dubbed a “food stamp crime wave” emerging in the United States.

Indeed, under Mr. Obama, the number of Americans now on food stamps has jumped two-thirds since Mr. Obama was elected.  That means one out of every seven people in the United States now receive taxpayer-funded food stamps.

(more…)

I’ve written about the fiscal implosion in Europe and warned that America faces the same fate if we don’t reform poorly designed entitlement programs such as Medicare and Medicaid.

But this new video from the Center for Freedom and Prosperity, narrated by an Italian student and former Cato Institute intern, may be the best explanation of what went wrong in Europe and what should happen in the United States to avoid a similar meltdown.

I particularly like the five lessons she identifies.

1. Higher taxes lead to higher spending, not lower deficits. Miss Morandotti looks at the evidence from Europe and shows that politicians almost always claim that higher taxes will be used to reduce red ink, but the inevitable result is bigger government. This is a lesson that gullible Republicans need to learn – especially since some of them want to acquiesce to a tax hike as part of the “Supercommitee” negotiations.

2. A value-added tax would be a disaster. This was music to my ears since I have repeatedly warned that the statists won’t be able to impose a European-style welfare state in the United States without first imposing this European-style money machine for big government.

3. A welfare state cripples the human spirit. This was the point eloquently made by Hadley Heath of the Independent Women’s Forum in a recent video.

4. Nations reach a point of no return when the number of people mooching off government exceeds the number of people producing. Indeed, Miss Morandotti drew these two cartoons showing how the welfare state inevitably leads to fiscal collapse.

5. Bailouts don’t work. This also was a powerful lesson. Imagine how much better things would be in Europe if Greece never received an initial bailout. Much less money would have been flushed down the toilet and this tough-love approach would have sent a very positive message to nations such as Portugal, Italy, and Spain about the danger of continued excessive spending.

(more…)

As lawyers say, lets stipulate that the political system is broken. We have, in the past, railed against special tax incentives for business that are often outmoded, ill conceived, and are generally ineffective. These, more often than not, merely distort the marketplace at great expense to the taxpayer and the American consumer. Elected officials in Washington have become so locked into doctrinaire philosophical positions that compromise has eluded their reach, and common sense has become as rare as the two-dollar bill. Democrats and the left point to growing gaps between the middle class and those they refer to as millionaires and billionaires (people who earn over $250,000 per annum) and who they say must pay their “fair share” in taxes.

And while it is widely acknowledged that the top 5% of earners pay over 50 percent of federal taxes, there has been a growing concentration of wealth within that top 5% of income earners during the last 20 years. Politicians love to define issues in a debate to gain popular advantage. The country is in desperate need of economic growth, which the Obama Administration has failed effectively to address. So, the White House has made increased taxes on “millionaires and billionaires” the cornerstone of their 2012 election strategy. Excessive spending, the growth of the federal deficit and the accumulated debt of the country threaten to snuff out economic growth in America just as it surely is doing in Europe. When Barack Obama became President, the federal debt was slightly over $10 trillion dollars. It has grown to more than $14 trillion dollars under his watch. If spending is not reined in, and/or revenues do not increase, servicing the nation’s debt will crowd out vital resources for private investment (where new jobs are created).

Elected officials are not leading; they talk past one another. The way out of this mess might be in changing the vocabulary of the debate so both sides can claim a victory. The Democrats could hoist the GOP on their own petard by shifting the debate away from tax increases, to cutting corporate entitlements and benefits. Note that the right complains about spending only when the beneficiaries are those who rely on government to help with retirement payments, medical benefits, or to finance their children’s education. Cutting specified corporate entitlements that really provide no economic benefit to the country would be easier for conservatives to swallow than increasing tax rates, which would retard economic growth.

(more…)

“I know firsthand about welfare and welfare dependency because of my own life, living seven years in and out,” says Star Parker, founder and president of the Center for Urban Renewal and Education (CURE).

Parker, also a syndicated columnist, explains what she thinks are the actual steps out of poverty and why our government should have no role in welfare in America.

Started as part of the Lyndon Johnson’s Great Society in the 1960s, the War on Poverty has been anything but effective, according to Parker. “This whole notion that we should even have a ‘war on poverty’ dismisses the fact that individuals have a role in their own lives,” she says.

(more…)

The Center for Freedom and Prosperity has released another “Economics 101″ video, and this one has a very powerful message about the federal government’s so-called War on Poverty.

As explained by Hadley Heath of the Independent Women’s Forum, the various income redistribution schemes being imposed by Washington are bad for taxpayers – and bad for poor people.

The video has a plethora of useful information, but the data on the poverty rate is particularly compelling. Prior to the War on Poverty, the United States was getting more prosperous with each passing year and there were dramatic reductions in the level of destitution.

But once the federal government got involved in the mid-1960s, the good news evaporated. Indeed, the poverty rate has basically stagnated for the past 40-plus years, usually hovering around 13 percent depending on economic conditions.

Another remarkable finding in the video is that poor people in America rarely suffer from material deprivation. Indeed, they have wide access to consumer goods that used to be considered luxuries – and they also have more housing space than the average European (and with Europe falling apart, the comparisons presumably will become even more noteworthy).

The most important message of the video, however, is that small government and economic freedom are the best answers for poverty.

(more…)

Last week’s Republican Presidential debate confirmed one thing: Texas Governor Rick Perry’s main challenge in winning the Republican nomination will be his ability to explain his record on illegal immigration as governor vs. what he proposes to do about it as President.

Perry’s opponents have hit him for signing in 2001 the nation’s first law allowing illegal immigrants to get the in-state tuition break that other Texans who attended high school in-state receive.  Four lawmakers out of 181 voted against the bill, as Perry has pointed out, making the bill uncontroversial at the time.  (Note: as a California lawmaker from 2004 to 2010, I consistently voted against expanding benefits to illegal immigrants.)

Today, 12,138 illegal immigrant students pay in-state tuition in Texas, about one percent of all Texas college students.  By comparison, the Department of Homeland Security estimates that 7.0% of Texas residents are in the nation illegally.

Gov. Perry has pointed out more than once, and with a degree of exasperation, that Texas has spent $400 million of its own taxpayers’ money on border security, hiring additional Texas Rangers to better secure the border.  Perry has also defended his insistence that a fence not be built along the entirety of Texas’ 1,969 mile border with Mexico, citing the fact that a river runs along the border through some very remote and rugged terrain that is best secured with “boots on the ground” and “aviation assets.” I have to agree with Perry on this one, building a fence along a river is costly while the river itself will constantly undermine the fence’s footings.  In addition, Gov. Perry’s Texas has passed a law that requires a photo ID to vote (only 13 other states have photo ID laws on the books) and illegal immigrants cannot obtain a driver’s license in Texas (11 states issue driver’s licenses to illegal immigrants, including Sarah Palin’s Alaska).

Dismissing Texas’ own border security efforts, Perry’s opponents have focused on the in-state tuition, calling the law a magnet for illegal immigration.  Theoretically, that’s true.  But does it actually impact an illegal immigrant’s decision about what state they may decide to live in?  I find it hard to believe a 22-year-old man from central Mexico is going to say to himself, “Hey, I’m going to move to California or Texas because, when my two children become college age in 17 years, I can save some tuition money.”  Rather, the decision to break U.S. law more likely comes down to the availability of jobs and the seriousness with which the Federal government secures the border.

To test this proposition, it is instructive to see where illegal immigrants live in the U.S.  According to the Department of Homeland Security, the largest illegal immigrant population by state in 2010 was:

(more…)

A Parable If You Will…

A friend of mine has a sister who has been broke for years.   Ten years ago he could no longer watch her struggle while his own career took off and he began supporting her by supplementing her small income with his own money.  He makes $300,000 a year and gives her $30,000 a year to help her out…roughly 20% of his take-home after all of his taxes (federal, state, local) are taken out of his paycheck.

Now, in those ten years of supporting her, she has not used that money as a foundation to build herself a better more independent life contructed on sound financial footing.  If anything, her situation now is even worse than it was a decade ago because she continues to make bad  decisions again and again.  She married an alcoholic husband (despite warnings from her family this was the case) and she then had a child with that same husband who is now of course estranged, voluntarily putting exponentially more strain on her already stressful life.  As of now, despite my friend having willingly given her all in $300,000 over ten years – money he could have put towards his kid’s college education, paying off his mortgage, or just socked away in the bank for a rainy day – she is no better off because the way she is running her affairs is still a disaster.  She hasn’t learned a thing.

Still, he continues to pay her because he believes it is his moral obligation to give back to those in need, especially as he has done so well in life.  He’s not thrilled about it, but he gets the concept and bucks up.  Plus he genuinely cares for the down-trodden, realizing that a few bad decisions in his own life, a wrong fork in the road taken, and he could have been there with her…still could be even.  He made need help himself someday.  Who knows what the future holds?

Now, the other day she came to him for her annual $30,000.  But this time, because of  new credit card debts accumulated, she asked him for $35,000.  Her logic?  He can afford it and she needs it.
(more…)

The Census Bureau has just released the 2010 poverty numbers, and the new data is terrible.

There are now a record number of poor people in America, and the poverty rate has jumped to 15.1 percent.

But I don’t really blame President Obama for these grim numbers. Yes, he’s increased the burden of government, which doubtlessly has hindered the economy’s performance and made things worse, but the White House crowd legitimately can argue that they inherited a crummy situation.

What’s really striking, if we look at the chart, is that the poverty rate in America was steadily declining. But then, once President Lyndon Johnson started a “War on Poverty,” that progress came to a halt.

As I’ve explained before, the so-called War on Poverty has undermined economic progress by trapping people in lives of dependency. And this certainly is consistent with the data in the chart, which show that the poverty rate no longer is falling and instead bumps around between 12 percent and 15 percent.

This is bad news for poor people, of course, but it’s also bad news for taxpayers. The federal government, which shouldn’t have any role in the field of income redistribution, has squandered trillions of dollars on dozens of means-tested programs. And they’ve arguably made matters worse.

(more…)

The chairwoman of the Democratic National Committee, Debbie Wasserman Schultz, made a surprise appearance at the Iowa Straw Poll earlier August 13th. During a short interview, she claimed “common ground” with several Republican presidential candidates, including Mitt Romney, on renewable energy subsidies. Much to the chagrin of economic conservatives, her claim appears substantiated.

Parked horizontally on the grounds of the Iowa Straw Poll throughout the weekend was a blade from a wind turbine. Prominently displayed on the turbine blade were the corporate logos of GE and TPI Composites. These two companies partner together to develop subsidized wind farms throughout Iowa. Representatives of this partnership provided magic markers to straw poll attendees and to politicians. People could then indicate support of the projects by signing the turbine blade. In addition, politicians were provided a speaking area to verbally express their support of renewable energy subsidies in front of the blade.

Both Mitt Romney and Debbie Wasserman Schultz (D-FL), amongst other politicians, attached their signatures to the declaration of support for wind energy subsidies. Considering Mitt Romney’s portrayal of himself as a businessperson with an economic vision starkly opposed to President Obama’s, his apparent support for renewable energy subsidies for TPI Composites may give conservatives pause. Unbeknownst to most Republican primary voters, several other prominent Democrats strongly support corporate welfare for TPI Composites. In fact, President Obama mentioned stimulus funds provided to TPI Composites in a speech last year. Another Massachusetts politician, stalwart Leftist Barney Frank, recently proudly announced the placement of a TPI plant in Fall River, MA—a plant supported with a $250,000 grant from the government.

The apparent endorsement by several Republican presidential candidates of this particular corporate welfare recipient will likely raise questions with conservative primary voters.

(more…)

Maine Governor Paul LePage is no stranger to hard times. He left home at 11 after a rough childhood, spending time on the streets, yet managed to finish both high school and college. He later went on to work as a Pepsi-Cola truck driver, at a meat-packing plant and as a short-order cook.

This is the story of Gov. Paul LePage, who, in a little more than six months, has ushered in sweeping reforms for Maine — a record of accomplishments it might take other governors years to achieve. What’s even more remarkable is that LePage is a tea party-backed conservative making significant strides in supposedly hostile New England.

LePage visited Heritage recently and shared the piece of advice that have inspired him throughout his life — just 10 two-letter words: “If it is to be, it is up to me.”

(more…)

In my speeches, especially when talking about the fiscal crisis in Europe (or the future fiscal crisis in America), I often warn that the welfare state reaches a point-of-no-return when the number of people riding in the wagon begins to outnumber the number of people pulling the wagon.

To be more specific, if more than 50 percent of the population is dependent on government (employed in the bureaucracy, living off welfare, receiving pensions, etc), it becomes rather difficult to form a coalition to fix the mess. This may explain why Greek politicians have resisted significant reforms, even though the nation faces a fiscal death spiral.

But you don’t need me to explain this relationship. One of our Cato interns, Silvia Morandotti, used her artistic skills to create two images (click pictures for better resolution) that show what a welfare state looks like when it first begins and what it eventually becomes.

These images are remarkably accurate.

(more…)

What has happened to liberals in the past 50 years? A quick perusal of the news each day shows a clear pattern of anti-American behavior and actions by Democrats. We read of Democrat behavior today that would have appalled American liberal statesmen like John Kennedy and Patrick Moynihan. While liberals of 50 years ago stood for generous social programs and higher taxes on the rich, we never doubted their love of America. Today, it is difficult to believe otherwise!

It is clear liberals view America as evil, hateful and a problem for the world. They curse and ridicule traditional values that made America grow from once-poor colonies to the world’s greatest superpower in a few hundred years. A quick viewing of headlines today shows the hatred liberals have for our country and even the desire to strengthen our enemies. For instance:

Liberal wacko Congressman Dennis Kucinich praises Syria murderer Bashad al-Assad
Holder: Justice to Drop Investigations Into CIA Officials Involved in Torture That Democrats advocated investigating these heroes that keep us safe proves my point!

Halt to Deportation of Citizen’s Same-Sex Partner Draws Fire So much for enforcing laws such as the Defense of Marriage Act signed by President Clinton!
CNN: McKinney blasts U.S. on Libya TV

U.S. shifts to closer contact with Egypt Islamists Does anyone really believe we should be doing business with the Muslim Brotherhood or Taliban?

Veterans Allege VA Censoring Prayer Would the VA have banned a Muslim ceremony with the Koran?

Dick Durbin: Illegal Alien Could Become President Instead of enforcing immigration laws, Democrats advocate changing the Constitution!

(more…)

Someone on Twitter asked me last night if I’d heard about what was happening in Minnesota with the poor. I didn’t, so they sent me a link to Crooks & Liars that talked about a law proposed there that would make it illegal for poor people to carry more than $20 cash!

(Note : It’s a total lie, but play along with my fake outrage for now.)

Look!!! Here’s some headlines. Wow!!!

Minnesota GOP wants it to be illegal to carry cash if you’re poor

Minn. to Make it a Crime for Poor to Have More Than $20

Incredible!!!

And here’s what the first couple of paragraphs of the Crooks and Liars piece says…

First Susie Madrak writes…

They’re not just crazy, they’re evil — and un-Christian, should they have the audacity to claim otherwise. If only we could force them to live like this, they wouldn’t last a week:

And then quotes an article that says…

St. Paul, MN – Minnesota Republicans are pushing legislation that would make it a crime for people on public assistance to have more $20 in cash in their pockets any given month. This represents a change from their initial proposal, which banned them from having any money at all.

Wow!!! It would be a crime for people on public assistance to have more than $20 in cash in their pockets any given month! A crime!

(more…)

This week, The Heritage Foundation released a monumental policy guide titled “Solutions for America”. For the last year and a half, President Barack Obama and Speaker Nancy Pelosi (D-CA) have charged conservatives with having “no ideas” or “old ideas.” The release of “Solutions for America” will stop this false narrative once and for all. The fact is that conservatives have been offering policy solutions for the past two years, and now The Heritage Foundation has combined its research with common sense solutions to give America the answers it needs. Let’s look at a few of them.

Health Care

In March 2010, Democrats in Congress finally passed the health care legislation they had been trying to enact since January 2009. And though we already spend over 17% of GDP on health care, this trillion-dollar plan piles on even more spending. Without listening to the public, Democrats passed this massive government takeover of health care,  creating more spending, expanding bureaucracy, and ensuring that the already confusing health care system will only get worse. All throughout the debate, Democrats in Congress and even President Obama declared that the Republicans offered no alternatives for their health care reform plan. Nothing could have bene further from the truth. Now that Obamacare has passed, what do we do now? The Heritage Foundation offers some solutions.

The first thing Heritage recommends is to repeal Obamacare. Heritage Action for America, the sister organization of The Heritage Foundation, has been leading the charge to repeal Obamacare by presenting Members of Congress who voted against Obamacare with a Discharge Petition that would force Congress to vote on repealing Obamacare. The Heritage Foundation also wants to give citizens control of their health care through Tax Equity, which would give individuals who buy health coverage on their own (separate from their employer) the same kind of tax breaks that people get when they purchase from their employer. Today, they receive no tax breaks. Health Care also needs to be portable, like car insurance to remain cost-effective and efficient.

(more…)

From the Los Angeles Times:

California welfare recipients are able to use state-issued debit cards to withdraw cash on gaming floors in more than half of the casinos in the state, a Los Angeles Times review of records found.

The cards, provided by the Department of Social Services to help recipients feed and clothe their families, work in automated teller machines at 32 of 58 tribal casinos and 47 of 90 state-licensed poker rooms, the review found.

State officials said Wednesday they were working to determine how much money had been withdrawn from casino ATMs by people using the welfare debit cards.

(more…)

The Center for Immigration Studies recently put out a study arguing that immigration has had negative effects on California. One of their measures was a comparison of how many people in the state were receiving some form of welfare compared to other states. I found that data (see Table 3 of the report) very interesting, but not because of the immigration debate (I’ll leave others to debate that topic). Instead, I wanted to get a better understanding of the variations in government dependency. Is there a greater willingness to sign up for income redistribution programs, all other things being equal, from one state to another? The “all other things being equal” caveat is very important, of course, since the comparison produced by CIS may simply be an indirect measure of the factors that determine welfare eligibility. One obvious (albeit crude) way of addressing this problem is to subtract each state’s poverty rate to get a measure of how many non-poor people are signed up for income-redistribution programs. Let’s call this the Moocher Index.

A few quick observations. Why is Vermont (by far) the state with the largest proportion of non-poor people signed up for welfare programs? I have no idea, but maybe this explains why they elect people like Bernie Sanders. But it’s not just Vermont. Four of the top five states on the Moocher Index are from the Northeast, as are six of the top nine. Mississippi also scores poorly, coming in second, but many other southern states do well. Indeed, if we reversed the ranking and did a Self-Reliance Index, Virginia, Florida, and Georgia would score in the top 10. Nevada, arguably the nation’s most libertarian state, is the state with the lowest number of non-poor people signed up for welfare.

Let’s now emphasize several caveats.

(more…)