Welfare State Explosion: Food Stamps Skyrocket, Disability Hits All-Time High

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Under the president’s FY2013 budget proposal, means-tested spending would increase an additional 30% over the next four years. Such welfare spending refers to programs that provide low-income assistance in the form of direct or indirect financial support—such as food stamps, subsidized housing, child care, disability, etc.— which the recipient does not pay into (unlike Medicare or Social Security).

The total amount spent on federal welfare programs, when taken together with approximately $280 billion in state contributions, amounts to roughly $1 trillion. Nearly 95 percent of these costs come from four categories of spending: medical assistance, cash assistance, food assistance, and social/housing assistance.

Consider the following:

  • Disability recipients hit record for 192nd straight month. “The number of American workers collecting federal disability payments climbed to yet another record high of 8,830,026 in January, up from 8,827,795 in December, according to newly released data from the Social Security Administration.” . (CNS)
  • Food stamps skyrocket as unemployment rates remain flat. “From October 2009 to October 2012 the unemployment rate has declined from 10.2 percent to 7.9 percent [the same rate as January 2013]. In that same time frame, nearly ten million new recipients have been added to the food stamp rolls…” (Daily Caller)
  • Over 100 million Americans are receiving some form of welfare. (The Weekly Standard)
  • Welfare becoming more attractive than work. Total welfare spending in the U.S. (if converted into cash payments) equals approximately ‘$168 per day for every household in poverty,’ higher than the $137 median income per-day.” (Senate Budget Committee)

foodstamps vs payrolls As higher payroll taxes hit dismayed workers, and employers saddled with taxes, regulations, and Obamacare costs have to cut hours and staff, the result is reduced opportunity for all Americans.

  • The youth unemployment rate for 18-29 year olds specifically for January 2013 was 13.1 percent (Millenial Jobs Report).
  • “The youth unemployment rate for 18-29 year old African-Americans for January 2013 was 22.1 percent (NSA); the youth unemployment rate for 18-29 year old Hispanics for January 2013 was 13.0 percent (NSA); and the youth unemployment rate for 18–29 year old women for January 2013 was 11.6 percent” (Millenial Jobs Report).
  • Even as 157,000 jobs were added to the economy, the labor force participation rate remained at a thirty-year low of 63.6% in January 2013. (Zerohedge)

Jobs Since 2007 vs Population vs Labor Force

What are the broader economic consequences of this developing reality?

  • Declining GDP. The Obama administration predicted 4.2% GDP growth in 2013. Earlier this year, that number had to be “corrected” by the Fed to 2.5%. The Congressional Budget Office just revised this figure again — to a meager 1.4%.
  • Unsustainable debt. “The actual liabilities of the federal government—including Social Security, Medicare, and federal employees’ future retirement benefits—already exceed $86.8 trillion, or 550% of GDP.” (WSJ)
  • Taxes consumed by entitlements by 2049. “Regarding the most critical fiscal challenge of the day—the need to restructure Medicare, Medicaid, and Social Security—the President has once again taken a pass. By the middle of this century, these three programs and Obamacare will consume about 18 percent of GDP, soaking up all the historical average of federal tax revenue.” (Heritage)
  • Economy under threat by 2027. “At current spending rates, there will be no U.S. Economy by 2027… that’s the opinion of the non-partisan Congressional Budget Office, using the Obama Administration’s own numbers, and Treasury Secretary Timothy Geithner doesn’t even bother to deny it.” (Bill Whittle)

Welfare spending is exploding while fewer people are able to shoulder the tax burden. As Baby Boomers retire, this situation will become even more difficult to grapple with.

The U.S. economy cannot continue to sustain these kind of debts, let alone the interest payments and the deteriorating currency needed to finance them. Voters should demand lower taxes, fewer regulations, and real welfare reform. If they don’t, then they are leading the nation to certain and avoidable financial ruin.

Charts from ZeroHedge. Image from Politifake.

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