About Welfare: A Response to Sunken Thought (WAW)

welfare, poor, money, taxpayers, United States, government, subsidies

A few weeks ago, I read a post by SunkenThought entitled Disturbed and Perturbed.

I’m not calling out SunkenThought, but I am calling out a mindset. Also, I didn’t want to clog up another person’s comment section with so many words and trigger spam filters.


Where I Disagree

First of all, I think SunkenThought was talking about two things when it comes to people abusing the welfare system and those who expected Trump’s election to somehow improve their own situation.

The votes were still being counted at the time the post was published, but consider an interesting tidbit of information: According to FiveThirtyEight, the average Trump voter had a median income of $72,000 a year. Hillary Clinton’s voters had a median income of $61,000 a year.

Now, the main issue I have is the notion about welfare and how taxpayer money is being wasted on the lazy. While I understand the greater point of that post, I wanted to express a polite disagreement with its tenets.

The image of a “welfare queen” and “lazy bums who take our tax money” is largely overblown. We can credit Ronald Reagan for pushing the former narrative during his 1980 campaign and it has stuck ever since.

My greater point is that welfare should be there … for individuals (in need). The real problems in regards to welfare are the corporate kind and subsidies for the wealthy.

Where Our Taxpayer Dollars Go

According to the Center of Budget and Policy Priorities, “safety-net” spending, which includes: food stamps, unemployment insurance, and assistance for working poor families, only took up about 10% of the 2015 budget, or $362 billion. This assistance helps to keep a good deal of families out of poverty.

Medicare is also a big program, costing about $476 billion a year. An expansion of this important program is what the Affordable Care Act should have been and people who use Medicare need it and love it for the most part.

I would hardly say most people who are helped by those programs are bums. We may know of some people who abuse the system, but many people who are eligible really need the assistance. They take jobs they qualify for and they may be underpaid by corporations that want to increase their bottom lines each year (*cough-cough* McDonald’s *cough-cough* Wal-Mart *cough-cough*).

Now, compare that amount of assistance to the obscene amounts of money the government isn’t getting due to corporate welfare.

For example, remember the case of GE? For years, their tax lawyers found loopholes so that corporation didn’t just avoid paying taxes, but it was owed money by the government in the trillions of dollars.

I would count the Troubled Asset Relief Program (or TARP, as it is best known) as an example of corporate welfare.

I side with people who view the hypocrisy in helping the very companies that created the financial mess while those banks refuse to give (fair) loans to people who needed them. Much of the mess was created by subprime loans promoted to people with lower incomes.

Subsidies for the Rich

There are wealthy citizens who do their best to hide their money and cost the government more with their welfare programs.

For instance, Ryan Cooper looked at six tax breaks wealthy Americans receive.  They include tax write-offs for charity and tax breaks for dividends. In all, the tax breaks add up to $133 billion, for the top 1%!


TARP was set up and run by the United States Treasury in response to the 2008 financial crisis caused by numerous financial institutions. The Treasury ran the program by purchasing the troubled assets and equity of failing banks.

By September 2008, number “To Big to Fail” banks and other financial institutions had financial trouble. These institutions included American International Group, Fannie Mae, Freddie Mac, Goldman Sachs, and Lehman Brothers, and Morgan Stanly. Lehman Brothers went bankrupt.

The Cost of TARP

On October 3, 2008, Congress passed the Emergency Economic Stabilization Act. That created TARP, which initially gave the Treasury a $700 billion authorization. That was later reduced to $475 billion by the Dodd-Frank Act.

Here is a breakdown of how the funds were supposed to be spent:

  • $245 billion for bank stabilization
  • $80 billion for the auto industry
  • $68 billion exclusively to stabilize AIG
  • $48 billion for foreclosure prevention programs
  • $27 billion to programs to increase credit availability

The government reported that it made back much of the money and even turned a profit. By December 2013, the government reported that it made an $11 billion profit for taxpayers (“Troubled”). Also, I’ve read that the government has since made a $71.9 billion profit, much of which came from returns on investments and loans.

However, there may have been hidden costs that totaled in the trillions. According to Nomi Prins*, the bailout cost taxpayers over $14.4 trillion by the end of October 2009. In 2011, John Carney discussed the results of a University of Missouri – Kansas City study, which totaled the commitments of the U.S. government to total $29 trillion.

Other Programs for Corporations

There are at many large programs for corporations that are subsidized by the U.S. government.

They include things like tax havens for companies and CEO’s use loopholes to compensate some of the benefits they get from their companies.

There are subsidies for oil companies.

Pharmaceutical companies garner at least $270 billion a year. Most of the time, these companies save money by taking advantage of the research and development from public institutions. Then they turn around and jack up drug prices.

All told, these government subsidies may cost us about $1.539 trillion a year. That far outstrips the amount of money given to families in need.

In Conclusion

Also it all feeds into what I talked about during one of my News Roundups: punching down. When we get people talking about proverbial moochers, we get them to look down at the less fortunate and the less powerful.

At the same time, such an exercise gets us to ignore what is being done to us by people who are for more fortunate and who have far more power. Like Jimmy Dore says, when someone is blaming someone who has less power, they are likely being manipulated by someone who more powerful. That’s what’s going on here and we will need to be mindful of it in the next 4 years because it might be kicked up to 11.

* Nomi Prins wrote It Takes a Pillage: Behind the Bailouts, Bonuses, and Backroom Deals from Washington to Wall Street. The figures listed in the book were current as of October 31, 2009.

Works Cited

Carney, John. “The Size of the Bank Bailout: $29 Trillion.” CNBC. 14 Dec 2011. Web. <http://www.cnbc.com/id/45674390>.

Cooper, Ryan. “Subsidizing the Rich: The Cost to Taxpayers Is in the Billions.” TheWeek.com. 15 Sep 2015. Web. <http://www.thefiscaltimes.com/2015/09/15/Subsidizing-Rich-Cost-Taxpayers-Billions>.

Kocieniewski, David. “G.E.’s Strategies Let It Avoid Taxes Altogether.” The New York Times. 24 Mar 2011. Web. <http://www.nytimes.com/2011/03/25/business/economy/25tax.html>.

Prins, Nomi. “The $700 Billion Bailout Plan’s Fine Print.” Mother Jones. 24 Sept 2008. Web. <http://www.motherjones.com/politics/2008/09/700-billion-bailout-plans-fine-print>.

Prins, Nomi. “The Real Size of the Bailout.” Mother Jones. Feb 2010. Web. <http://www.motherjones.com/politics/2010/01/real-size-bailout-treasury-fed>.

Silver, Nate. “The Mythology Of Trump’s ‘Working Class’ Support.” FiveThirtyEight. 3 May 2016. Web. <http://fivethirtyeight.com/features/the-mythology-of-trumps-working-class-support/>.

“Troubled Asset Relief Program – TARP.” Investopedia. Web. Retrieved 14 Dec 2016. Web. <http://www.investopedia.com/terms/t/troubled-asset-relief-program-tarp.asp>.


3 thoughts on “About Welfare: A Response to Sunken Thought (WAW)

  1. I see you disagree a lot with my mindset of being anti-welfare. I appreciate all the hard work that went into your article, as it is very well researched. I must say, you get your point across very well.

    I guess the main reason for my stigma towards it stems from personal experience in seeing people who have food stamps or tanf or whatever they call it. I’ve lived with people who refused to get a job because they prefered living off the government assistance they received due to their number of dependents or worked under the table so they could keep their food stamps and financial assistance.

    I will admit I didn’t do a whole lot of digging into the situation, but I get tired of seeing my husband’s wages diminished for extra medical expenses that have nothing to do with our medical plan and watching about 1/3rd-1/4th of his check going to taxes.

    I will admit I was hasty in my words, but the point still stands about my point of the piece. It is hard to get by and afford to take care of ones family when the money one makes keeps going towards taxes that you’ll never see again. Knowing Trump, we will be looking at higher taxes which will make things increasingly difficult on our family.

    Liked by 1 person

    1. I will admit I was hasty in my words, but the point still stands about my point of the piece. It is hard to get by and afford to take care of ones family when the money one makes keeps going towards taxes that you’ll never see again.

      I like reading your posts because you are firm, honest, and direct.

      I was just offering another perspective, but yours is part of a bigger picture.

      Yes, there are people abusing the system. Unfortunately, that will always be true. But there are others who need the assistance and have difficulty getting out of the welfare system because of the stipulations placed upon them.

      At the same time, people who really don’t need the assistance at all but take government money to pad their wallets. Then they turn around and blame poor people for “taking handouts.”

      Knowing Trump, we will be looking at higher taxes which will make things increasingly difficult on our family.

      I don’t know all he will do, but you better believe it’s going to be disastrous. I can see cuts in corporate taxes, which he has promised, but I don’t know what he would want to do with different tax brackets. He and Congress might find ways to cut needed programs and raise fees in other areas and not come close to making up budget shortfalls.

      Liked by 1 person

  2. I have the horrible feeling that just as I am about to be eligible for medicare it is going to be forever changed and longer an “entitlement”. Shay some (well, okay a lot) of those taxes go to social security and medicare. For those like me that 407.00 a month SS check is the difference between having my heart medications and not having them. Not having insurance means medicare, in two years, is a necessity. I too get frustrated by what i think of as healthy people getting entitlements that I desperately need yet can not receive. BUT, in the bigger picture, there are so very few that actually receive benefits that could be working for what they have instead.


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