Browsing David Goldman's blog about 22% underemployment I wondered about such an eventuality as 20% actual unemployment. At what point would supporters of a Welfare State actually start to behave like the investor class?
Any businessman knows that an increase in the entitlements of the welfare state undermines his business by making it easier on the unemployed and by raising taxes to pay for such programs. Conservatives regularly bark and scream about any tax increases as if the incremental bits will impoverish them permanently. But I think anyone can envision a scenario like the following:
I'm Joe Liberal and I have a commitment to a fair society. So I want to see Elroy Grabbag become a productive member of society. So I vote for welfare to get Elroy out of the gutter, and free health care for him to stay healthy. I don't mind paying more taxes. It's the price you pay for a fairer society.
Last year I made 75k and paid about 25% in taxes. Meaning I take home about 56k. Comfy. I look at Elroy and realize that with his welfare and free health care, he's getting for free what I have to pay for. Still, I take pride in my responsibility to my fellow man - I mean, through my taxes, it's not like I invite the guy over for dinner. But now that unemployment is 20% - there's more Elroys around the place. And they're all stuck just like me because there are no new jobs and no growth in the economy.
In fact, my local economy is doing lousy and we're knee deep in Elroys, but it's the Federal tax that's paying. So Sam Liberal in Georgia got a raise, and me, 10% of our company was laid off, meaning I have to do somebody else's job at work in addition to mine, and I'm lucky to have the job.
Well, crap. I'm not putting Elroy through college, but he's not becoming a productive member of society. He's just using my welfare and health care. I know it's not much, but I'd kinda rather have the extra dollars for my own family - because now I see how I could help my kids do better than I did. Like maybe get them to move to Georgia.
At some point, but probably only during a recession, does the idea take hold that there is no easy way to claw back the entitlements you gave up when life was easy and an incremental tax increase was not a problem. That should be especially evident now. Whether or not your party is responsible for the screwups in the economy which have resulted in the government being deeply in debt, you're going to have to pay for it. And the satisfaction one may get from seeing their socially responsible investments being managed by government programs will become tainted.
Furthermore, people ought to recognize that they cannot fight forever. You will one day turn your back on government and it will stab you. The reasonable thing to presume is that you are smarter and more possessed of integrity than the political proxies who would spend your dollars for you.
Besides, whom is your commitment to, Washington or Elroy?
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