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Oil and Water: Mixing Sanity With Politics
The 47 Percent Controversy
Published on September 19, 2012 by guest author: Cabot Nunlist

Cabot Nunlist is writing about important policy issues in the weeks leading up to the presidential election.

For those of you who are outraged that Mitt Romney was caught on camera saying that the 47 percent of people who were getting government assistance were never going to vote for him, settle down. It’s not the comment you should be upset with. He was just telling a bunch of rich donors that he wasn’t going to waste campaign resources chasing voters who aren’t going to vote for him anyway. I’m sure Obama has had similar conversations about not spending valuable campaign resources on anyone who voted for Michelle Bachmann, for example.

What should upset you is his remarkable lack of understanding about the demographics of this country, as well as his own family demographic. Let’s start at the national level. According to this research, only 9 percent of entitlement benefits go to non-working, non-disabled households. Even if you assume a large number of fraudulent disability claims, this is still not a large number. Most of the people getting these benefits are elderly people who paid for their benefits via payroll taxes, and so it should not be considered a handout (click here for that data). Most of the rest are the working poor, who also pay payroll taxes and certainly aren’t freeloading off the government.

Further, as you can see from the link here, the majority of the poor people who receive these benefits are in the reddest of red states. And yes, I am aware of the irony that the biggest consumers of government benefits are the ones continually rallying to end them. In this case, far from writing off Obama voters, he appears to be denigrating his most reliable base of support. It certainly demonstrates a near total lack of understanding as to who the citizens are of the country he wants us to think he is capable of competently leading.

On to the personal: It’s not surprising that Mitt didn’t need government assistance - his father gave him a few million dollars of seed money to get started. Where do I apply for that kind of a head start? In a bit of irony remarkable even in a campaign full of it, guess who was on welfare early in his life? Mitt Romney’s father. It’s kind of curious that Mitt didn’t point that out when he talked about his father’s meager beginnings to his donors. I would hazard a guess that Mitt wouldn’t be looking at a net worth in the 9 figures without this government assistance. It’s great that Mitt is rich now – for a relatively nominal investment by the federal government to get his dad back on his feet, the government now collects many times that in taxes from the Romney clan every year. As a taxpayer, this is a good outcome. That’s the American Dream: hard work, coupled with opportunity, producing great wealth.   

Generalizing this example, I would bet that the money the government spends on food stamps and other assistance for the poor is easily recouped by lower crime rates and the percentage of kids who grow up in those households that wind up being healthy, productive members of society in part because they received some assistance during a time of need. These kids who grow up getting assistance through food stamps, government-subsidized housing, or other programs that are designed to lessen the crippling effects of poverty have a much better chance of becoming productive, taxpaying members of society. It costs $22,650 to house a prisoner per year (those numbers are for 2001 so likely low for 2012) and lord knows how much to investigate/prosecute/insure the crimes that were committed in the first place, plus the lost tax revenue from prisoners and other people who may not be in prison but are non-productive members of society.

Food stamps were used by 40 million people in 2010, and the average benefit received came out to $1,608 per year. The average amount a citizen paid in taxes last year was $10,549. Food stamps are not a lifetime benefit, but presumably once you start paying taxes you will be paying them for many years, and so if one person out of 5 on food stamps becomes an average productive member of society, then the program is paid for in the first year. If the number is one in ten, then the program is paid off in 2 years. In fact, since it costs more than 10 times as much to house a prisoner as it does to provide food stamps to someone, even a nominal reduction in the crime rate would pay for this program, regardless of other factors. I am not including social security in these calculations (those benefits were paid into the system by the beneficiaries) or Medicare/Medicaid (see my article on health care for an explanation of why reducing benefits here doesn’t help the taxpayer at all). This seems like a good investment from a business standpoint, not to mention that it is probably good for society to attempt to provide opportunities for kids who are not at fault for their parents.  

Of course there are a small minority who abuse the system - just like there are people who abuse the financial system for personal gain, but you don’t hear anybody (except possibly the Democrat’s own lunatic fringe) calling for an end to Wall Street. It is impossible to administer large social aid programs without some abuse, but pointing out the exceptions is not evidence that the programs don’t work. As someone trying to bring some scientific method to a Congress that increasingly appears to disdain it, I would like to see a comprehensive CBO look at the program costs vs. benefits. I suspect we’ll find that these programs more than pay for themselves when we take the secondary benefits into account.

What upsets me about Romney's comments are the complete disregard for the fact that his own family used government assistance, ignorance about how his own base of voters (who he calls victims in the video that has gone viral), and ignorance about the costs and benefits of social aid programs in general. To use one of Obama’s analogies, his father walked through the door of opportunity, was wildly successful, and now Mitt wants to slam that door shut on everyone else in that situation. It’s not the video that makes him unpresidential: It’s what it implies about the man himself.

Cabot Nunlist is a computer programmer from New England. He currently lives with his wife and son in Miami, but is hoping to escape soon.

Previous Posts By This Author: More For Less: How We Can (And Should) Provide Better Health Care For Everyone

Does Trickle-Down Economics Make Any Sense?

User Comments
Marleen Hammons | September 20, 2012 22:51

This is extremely interesting and gives some facts I did not know. Thanks for your commentary and interest in these very important issues facing the U.S. In this election year we all need to be better informed and know more about the candidates than the stupidity that is emailed every day. I appreciate the time you've taken to add to the conversation.

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