We're Facing a Moral Cliff

By Peter Cove

(Image of Alexis de Tocqueville via Wikimedia)

If you are bothered that we might go over a fiscal cliff, think again. Our march toward a moral cliff is its taproot. The moral cliff is the ever quickening erosion of core values and our growing expectations of government. Slowly slipping away are individualism and commitment grounded in hard work, personally doing good and the proper role of citizens within the society. Alexis De Tocqueville, the French historian who penned Democracy in America based upon his own experiences, would not recognize what we have become. In his own words, “No Americans are devoid of a yearning desire to rise…not only are desires boundless, but the power of satisfying them seems almost boundless, too.” We have since changed and the results have eroded our belief in industriousness and how much government must provide. We have journeyed from the serving the deserving poor, to all are deserving. The safety net has become a version of the game Dialing for Dollars where all can play and most win. Let’s look at the numbers.

Over the years, the dependency trends have been disturbing. According to the United States Office of Management and Budget, federal spending on dependency related programs has increased from 28.3 percent of the budget in 1962 to 70.5 percent in 2010. The fastest growing sectors of dependency are health and welfare and housing. According to the Heritage Foundation, from 2009 to 2010, health and welfare dependency increased by 13 percent and housing dependency increased by 12 percent.

Some claim that these benefits go to our soldiers and the elderly, and rightfully so, but according to studies done by the AARP, over 30 million households without a person 65 or older receive entitlements. And according to the Heritage Foundation, 65 million individuals who are not in the military or any government position receive entitlements. Meanwhile, since 1984, the percentage of Americans who pay no federal income tax has increased from 14.8 percent to 49.5 percent, according to the IRS. America’s safety net is becoming unsustainable.

I do not mean to place blame on the people taking advantage of these programs; they are simply reacting to the rules and incentives that the game of life is now played by. When first-term mayor Rudy Giuliani toured our Manhattan office at America Works, he came out of a two-hour discussion with welfare recipients and said, “They really do want to work, don’t they Peter?”

The lack of industriousness causes many to blame those dependent on government transfers. But according to a study by Pennsylvania State Human Service Commissioner Gary Alexander, the economic incentives are set up in such a way that work is discouraged. In Pennsylvania, a woman with two children earning a gross income of $29,000 is eligible to increase her income through benefits to $57,327, the same amount as a single mother of two earning $69,000 a year after taxes. If that same mother earned $1,000 more, her net income and benefits would drop to $49,000.

This example is not anecdotal. According to a study about the value of public assistance benefits in Wisconsin by that state's Legislative Fiscal Bureau, a single mother with one child earning $15,130 could receive benefits that would boost her income to $43,277. These choices are not out of laziness; they are rational decisions made in consequence to the rules America’s state and federal governments have set up.

But here are cultural reasons we have become so dependent. First, we have witnessed stigma being replaced by selfishness. There was a time when being on welfare was considered shameful. There was a time when out-of-wedlock births were an embarrassment. Once rewards for not working were ignoble. Now single motherhood is considered a right to be supported by government. Not working now calls for disability payouts to support an otherwise largely employable class. The life of responsibility has become the Life of Riley with most expecting government to be its underwriter in perpetuity.

The second is the liberal notion that every social problem must be met with government spending for new programs. And where has that gotten us? A plethora of unworkable poverty and income support programs that have spent $19 trillion since 1965 has resulted in a de minimis reduction in poverty. With that has come a staggering increase in dependency. And it is this dependency, on medical support, Social Security, and welfare programs, that is pushing us over the fiscal cliff.

If our moral cliff is nudging us over the fiscal one, what is to be done? The answer is that we must put work back on the front lines of dependency reduction. To do this, there should be a hardheaded look at welfare, health, and poverty programs and a reduction or elimination of those that are disincentives to work, those that do not work, and those, like Social Security, which suffer from expectations built in another time. The savings from these program reductions should then be used to reduce the public debt and create jobs as the primary entitlement, rather than dependence. It is time for America to take JFK’s hand up, instead of its current hand-out. Our nation’s desire to do good for the disadvantaged should come in the form of supporting self-sufficiency rather than subsidizing poverty. Perhaps then de Tocqueville would recognize America.

Peter Cove is the Founder of America Works, a national company securing jobs for welfare recipients and other hard to place workers

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