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"Entitlements" and Our Dollar Democracy

Friday, 22 November 2013 10:49 By Ellen Dannin, Truthout | News

Dollar.(Photo: Judith; Edited Jared Rodriguez / Truthout)Truthout depends on you to continue producing grassroots journalism and disseminating conscientious visions for a brighter future. Contribute now by clicking here!

Patrick Henry's "Give me liberty, or give me death" left no ambiguity about his position on being a citizen of a democracy. Then people understood the power of words and the importance of using words that meant what they said.

But now, in our Humpty Dumpty Looking Glass world, words are shape shifters with no real meaning:

"When I use a word," Humpty Dumpty said, in rather a scornful tone, "it means just what I choose it to mean - neither more nor less."

"The question is," said Alice, "whether you can make words mean so many different things."

"The question is," said Humpty Dumpty, "which is to be master - that's all."

Take the word entitlement. Until recently, a person with an entitlement had a valid and enforceable right or claim solidly based on a law or a contract. Now, under Humpty Dumpty rules, a person with an entitlement is a greedy freeloader who should be punished by losing that right or claim.

Today, the masters of the word are the masters of the world. They tell us that people who receive Social Security are to be reviled and their benefits must be cut because they are an entitlement. So too are free breakfasts for impoverished children and unemployment and welfare for those unable to find work in the Great Recession.

Feeding into the attack on Social Security are urban legends based on a misunderstanding of how Social Security is funded and what its purposes are. Examples and explanations can be found here, here and here.

Unfortunately, even people who ought to know better fail to fully grasp how Social Security operates. They don't understand that it is an insurance program and not an investment like a personal savings account.

The campaign against Social Security stems mainly from three misunderstandings about its funding and operation: that Social Security is going bankrupt; that Social Security is essentially the same as private pensions, IRAs and 401(k)s; and that Social Security is a tax on a par with personal and corporate income taxes. None of these beliefs is correct.

Another misunderstanding is that Social Security operates only as a program for retirees. Social Security offers far broader protections than that.

Social Security's full name is the Old Age, Survivors, and Disability Insurance (OASDI ). OASDI provides benefits that make our society more decent and humane. In addition to providing financial support to older Americans who have worked and paid their payroll taxes, OASDI also provides support to the survivors of a worker who has died, including minor children who have lost a parent and to those who are too disabled to work.

To keep faith with all these members of our community, we need a robust program that keeps faith with our forebears and that meets our intergenerational obligations. Social Security provides millions of us with true security. FICA - the money we pay to fund Social Security - provides the basis for all of us to live a decent, dignified life within prosperous communities. It is social in the sense that it provides broad support for a good society by keeping people out of poverty.

Social Security is not a limited, confined or private matter; a mere tax; or a handout. Instead, OASDI's benefits track the biblical injunction - repeated many times - that we are obligated to care for the widow, the orphan and the poor.

"Them That's Got Shall Get. Them That's Not Shall Lose."

Meanwhile, fears and rumors about Social Security distract our attention from those who do enrich themselves at the public's expense. A November 7, 2013, study by the Environmental Working Group titled Forbes Fat Cats Collect Taxpayer-Funded Farm Subsidies: Forbes 400 Subsidy Recipients (1995-2012) is an example of an entitlement that truly deserves close scrutiny.

Many of these same billionaires also may have received crop insurance subsidies, but taxpayers have no way of knowing because current law prohibits the disclosure of the identities of crop insurance policyholders.

According to EWG's analysis, more than 40 billionaires own properties that grow crops that are among the most likely to be insured through the federal crop insurance program, including corn, soybeans, wheat, cotton and sorghum. From 1995 to 2012, these five crops account for nearly $44 billion of premium subsidies - about 82 percent of total crop insurance subsidies and more than two-thirds of all acres enrolled in the crop insurance program.

In 2008, Congress created a means test that was designed to deny some subsidies to individuals with annual off-farm income of more than $500,000. The year before, Bloomberg News published a report highlighting some of the billionaires who had been receiving subsidies. But lawmakers specifically declined to apply it to crop insurance, which has become the primary government support for farm business income.

Worse, the farm bills Congress is now considering could pay these billionaire "farmers" with even larger subsidies.

There is nothing wrong with farmers' wanting to insure their crops. We depend on farmers for our food, but farming is a risky business. Weather, disease and pests can cause crops to fail. As the old joke goes, a farmer who wins big in the lottery is asked by a reporter what he'll do with his winnings. The farmer says, "Well, I guess I'll just keep farming till I go broke."

But these billionaire "farmers" are not in that situation. They have created a secret system that dragoons the rest of us into subsidizing them while also forbidding us to have information about that subsidy is. Talk about the entitled and their entitlements!

The Difference Between Social Security and Crop Insurance for Billionaire "Farmers"

Today, the annual income of the very rich is so large compared with that of the rest of us that it helps to see the differences in graphic terms. Essentially the same information can be found in the Social Security Administration's most recent table of compensation. The table shows us that 166 people earned $50,000,000 or more in 2012. The average of that group was $97,455,138, so a goodly number of them must have earned well into the nine figures. This table shows income for just one year. At least some of those people must have earned money in other years as well and, as a result, amassed enormous wealth and the power that wealth creates.

One would think they would be embarrassed to force the rest of us to subsidize their crop failure insurance. In fact, they must be embarrassed, because they got the best Congress money can buy to hide this information from us. Is it any wonder, then, that the United States has an extremely unequal wealth distribution, thanks to a Congress that voted the wealthiest an entitlement to hide this information from the public?

Surely, if anyone deserved to have their welfare means tested, it should be this crew. But this will not happen, because they are apparently entitled to their entitlements and to keeping the rest of us in the dark as to just how much those entitlements cost the rest of us.

Social Security, that is, OASDI, may look like an individual pension, a savings account or even an investment, but it is none of these. As its full name shows, it is insurance that pays out when an event occurs that can cause poverty. Those events include disability, the death of a spouse or parent and old age.

At the time Social Security was enacted and still today, older people are at high risk for living in poverty. Poverty continues to be a likely fate for those who are retiring during a deep and long recession that has left many people with little to no savings.

A recent study by the National Bureau of Economic Research found that Social Security has helped bring down - but not eliminate - poverty in old age. Fortunately, for them, they are still entitled to Social Security benefits that provide nearly half of the income for the elderly. This issue affects us all. If we live long enough, we all could face poverty in old age, and so may people we care about.

Copyright, Truthout. May not be reprinted without permission.

Ellen Dannin

Ellen Dannin is the author of Counting What Matters: Privatization, People with Disabilities and the Cost of Low-Wage Work and Privatizing Government Services in the Era of ALEC and the Great Recession.


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"Entitlements" and Our Dollar Democracy

Friday, 22 November 2013 10:49 By Ellen Dannin, Truthout | News

Dollar.(Photo: Judith; Edited Jared Rodriguez / Truthout)Truthout depends on you to continue producing grassroots journalism and disseminating conscientious visions for a brighter future. Contribute now by clicking here!

Patrick Henry's "Give me liberty, or give me death" left no ambiguity about his position on being a citizen of a democracy. Then people understood the power of words and the importance of using words that meant what they said.

But now, in our Humpty Dumpty Looking Glass world, words are shape shifters with no real meaning:

"When I use a word," Humpty Dumpty said, in rather a scornful tone, "it means just what I choose it to mean - neither more nor less."

"The question is," said Alice, "whether you can make words mean so many different things."

"The question is," said Humpty Dumpty, "which is to be master - that's all."

Take the word entitlement. Until recently, a person with an entitlement had a valid and enforceable right or claim solidly based on a law or a contract. Now, under Humpty Dumpty rules, a person with an entitlement is a greedy freeloader who should be punished by losing that right or claim.

Today, the masters of the word are the masters of the world. They tell us that people who receive Social Security are to be reviled and their benefits must be cut because they are an entitlement. So too are free breakfasts for impoverished children and unemployment and welfare for those unable to find work in the Great Recession.

Feeding into the attack on Social Security are urban legends based on a misunderstanding of how Social Security is funded and what its purposes are. Examples and explanations can be found here, here and here.

Unfortunately, even people who ought to know better fail to fully grasp how Social Security operates. They don't understand that it is an insurance program and not an investment like a personal savings account.

The campaign against Social Security stems mainly from three misunderstandings about its funding and operation: that Social Security is going bankrupt; that Social Security is essentially the same as private pensions, IRAs and 401(k)s; and that Social Security is a tax on a par with personal and corporate income taxes. None of these beliefs is correct.

Another misunderstanding is that Social Security operates only as a program for retirees. Social Security offers far broader protections than that.

Social Security's full name is the Old Age, Survivors, and Disability Insurance (OASDI ). OASDI provides benefits that make our society more decent and humane. In addition to providing financial support to older Americans who have worked and paid their payroll taxes, OASDI also provides support to the survivors of a worker who has died, including minor children who have lost a parent and to those who are too disabled to work.

To keep faith with all these members of our community, we need a robust program that keeps faith with our forebears and that meets our intergenerational obligations. Social Security provides millions of us with true security. FICA - the money we pay to fund Social Security - provides the basis for all of us to live a decent, dignified life within prosperous communities. It is social in the sense that it provides broad support for a good society by keeping people out of poverty.

Social Security is not a limited, confined or private matter; a mere tax; or a handout. Instead, OASDI's benefits track the biblical injunction - repeated many times - that we are obligated to care for the widow, the orphan and the poor.

"Them That's Got Shall Get. Them That's Not Shall Lose."

Meanwhile, fears and rumors about Social Security distract our attention from those who do enrich themselves at the public's expense. A November 7, 2013, study by the Environmental Working Group titled Forbes Fat Cats Collect Taxpayer-Funded Farm Subsidies: Forbes 400 Subsidy Recipients (1995-2012) is an example of an entitlement that truly deserves close scrutiny.

Many of these same billionaires also may have received crop insurance subsidies, but taxpayers have no way of knowing because current law prohibits the disclosure of the identities of crop insurance policyholders.

According to EWG's analysis, more than 40 billionaires own properties that grow crops that are among the most likely to be insured through the federal crop insurance program, including corn, soybeans, wheat, cotton and sorghum. From 1995 to 2012, these five crops account for nearly $44 billion of premium subsidies - about 82 percent of total crop insurance subsidies and more than two-thirds of all acres enrolled in the crop insurance program.

In 2008, Congress created a means test that was designed to deny some subsidies to individuals with annual off-farm income of more than $500,000. The year before, Bloomberg News published a report highlighting some of the billionaires who had been receiving subsidies. But lawmakers specifically declined to apply it to crop insurance, which has become the primary government support for farm business income.

Worse, the farm bills Congress is now considering could pay these billionaire "farmers" with even larger subsidies.

There is nothing wrong with farmers' wanting to insure their crops. We depend on farmers for our food, but farming is a risky business. Weather, disease and pests can cause crops to fail. As the old joke goes, a farmer who wins big in the lottery is asked by a reporter what he'll do with his winnings. The farmer says, "Well, I guess I'll just keep farming till I go broke."

But these billionaire "farmers" are not in that situation. They have created a secret system that dragoons the rest of us into subsidizing them while also forbidding us to have information about that subsidy is. Talk about the entitled and their entitlements!

The Difference Between Social Security and Crop Insurance for Billionaire "Farmers"

Today, the annual income of the very rich is so large compared with that of the rest of us that it helps to see the differences in graphic terms. Essentially the same information can be found in the Social Security Administration's most recent table of compensation. The table shows us that 166 people earned $50,000,000 or more in 2012. The average of that group was $97,455,138, so a goodly number of them must have earned well into the nine figures. This table shows income for just one year. At least some of those people must have earned money in other years as well and, as a result, amassed enormous wealth and the power that wealth creates.

One would think they would be embarrassed to force the rest of us to subsidize their crop failure insurance. In fact, they must be embarrassed, because they got the best Congress money can buy to hide this information from us. Is it any wonder, then, that the United States has an extremely unequal wealth distribution, thanks to a Congress that voted the wealthiest an entitlement to hide this information from the public?

Surely, if anyone deserved to have their welfare means tested, it should be this crew. But this will not happen, because they are apparently entitled to their entitlements and to keeping the rest of us in the dark as to just how much those entitlements cost the rest of us.

Social Security, that is, OASDI, may look like an individual pension, a savings account or even an investment, but it is none of these. As its full name shows, it is insurance that pays out when an event occurs that can cause poverty. Those events include disability, the death of a spouse or parent and old age.

At the time Social Security was enacted and still today, older people are at high risk for living in poverty. Poverty continues to be a likely fate for those who are retiring during a deep and long recession that has left many people with little to no savings.

A recent study by the National Bureau of Economic Research found that Social Security has helped bring down - but not eliminate - poverty in old age. Fortunately, for them, they are still entitled to Social Security benefits that provide nearly half of the income for the elderly. This issue affects us all. If we live long enough, we all could face poverty in old age, and so may people we care about.

Copyright, Truthout. May not be reprinted without permission.

Ellen Dannin

Ellen Dannin is the author of Counting What Matters: Privatization, People with Disabilities and the Cost of Low-Wage Work and Privatizing Government Services in the Era of ALEC and the Great Recession.


Hide Comments

blog comments powered by Disqus