A new report from the Census Bureau showed a total of 108,592,000 people were on some sort of means-tested government benefits program in the fourth quarter of 2011, yet only 101,716,000 people were employed full-time for the entire year.
A individual counted as a beneficiary of a means-tested program if they resided in a household where someone received benefits.
Means-tested benefits programs are the second-largest category of government spending. The government spends more on these programs than public education and defense spending. From a Heritage Foundation report:
The 69 means-tested programs operated by the federal government provide a wide variety of benefits. They include:
12 programs providing food aid;
10 housing assistance programs;
10 programs funding social services;
9 educational assistance programs;
8 programs providing cash assistance;
8 vocational training programs;
7 medical assistance programs;
3 energy and utility assistance programs; and,
2 child care and child development programs.
Programs such as Social Security, unemployment insurance, workers compensation, and veterans benefits are not considered to be "means tested," so recipients of those benefits are not included in the 108,592,000 figure.
Clearly, this is a huge problem. A country cannot survive if its citizens are not willing or able to work. In 35 states welfare pays better than an actual job. This is what we call an "incentive"--and the U.S. is incentivizing people to not work. Why would a person actually get a job if they could be paid more to stay home? In Pennsylvania, a single women with children working a job that pays $29,000 a year actually receives $57,345 in total income when benefits are factored in. Conversely, if the woman were to work a job that paid $69,000 a year, her net pay after taxes is only $57,045.
If the woman were to make more than her $29,000 salary, she would miss out in nearly $30,000 in government benefits. Short of winning the lottery or developing some sort of hot product, a person's income is not going to increase rapidly from $29,000 to $69,000. This is referred to as the "welfare cliff." There is no incentive for the woman to better her life and stop receiving welfare.
This is a major problem with how means-tested benefits are distributed in the United States, yet nobody is actually doing anything about it. The amount of people on SNAP (food stamps) has nearly doubled since 2006, despite the economic recovery. This is not good.
Disability claims are also at record highs. Even 60 Minutes thought those numbers were suspicious and did an investigation about it. The system is being gamed.
If American welfare recipients were counted as a country, they would be the 12th largest in the world.
This is not change we can believe in.
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