The Dole

We are never going to be able to confront this nation's financial mess until we start telling some truths.

Here's one you don't hear in too many places.

Social Security and Unemployment "insurance" are merely forms of welfare.

Both programs are couched as "insurances" and "rights" because people allegedly pay for them. They were started that way because most Americans back then rejected handouts. They wanted to earn what they received.

Quaint notion, eh? Hard to conceive of that in a day and age when virtually every American, of every race, creed, color and economic strata eagerly pushes their way to the government trough of benefits, contracts, grants, etc. In fact, our blatant desire to grab government largess may be today's defining American character trait.

The problem with calling Unemployment and Social Security "insurances" and paid-for benefit programs is that for the most part, they aren't. The benefits of these programs--each of which was supposed to be self-sustaining-- have been repeatedly and regularly increased by our politicians of both parties. But the payments into the programs haven't been, unless you count the increased taxes on higher wage earners and businesses.

Latest example? The continuing cry to extend unemployment benefits. Now, it is extremely difficult to say you want someone who is unemployed to lose the little income afforded by this program. No one wants to see people suffer.

But the extensions do not come without costs. There isn't a magic tree to be shaken for those dollars. The funds come from former employers-- meaning there is less money to hire-- and from the general tax pool.

Now, when the suggestion is made that people on unemployment be required to perform services for their pay--anything from picking up trash, to reading to kids at schools, to working with seniors or providing day care services for the working poor-- the cry goes out NO! I paid for those benefits--it's unemployment INSURANCE.

Except it's not. And certainly the unpaid-for extensions aren't.

Which means that unemployment--to the extent at least of the extension-- is what used to be called "the dole"--welfare.

Same thing with Social Security. Most seniors got all their money back within a few years. Arbitrary increases, COLA's, increased Medicare coverages, the drug coverage, etc.--these are things that simply were not paid for by seniors. Which means Social Security is, for want of a better term, welfare--not something people earned or paid for during their working lifetimes.

For instance, take a 75 year old retiree. When he was 25 back in 1960 the FICA rate was 6%-employer plus employee! Capped at $4,800 in income. Thus the maximum contribution was $288. For the whole year.

When he was 35? Employer and employee combined paid 8.4% on a maximum income of $8,400. Total maximum contribution? $655.

You get the point.

The average senior today receives about $1,100 per month. It doesn't take too many months for benefits (forgetting Medicare and the drug benefit) to completely outstrip lifetime FICA contributions.

Are too many seniors in poverty? You bet. Do we need a better system to care for the unemployed and our seniors in need. You bet.

We need to find a way to help those in need, and, indeed, a way to pay them much more than they receive. But the systems now don't work and common sense changes are rejected out of hand becaus eof this fantasy that people have somehow paid for these benefits.

Thus we have people with large incomes and significant assets receiving the same benefits that truly needy people receive--and we have healthy people with skills sitting at home on the couch (or working off the books) receiving money while there is work to be done.

It's time to get serious. Let's at least start the conversation by telling truths.