What would the Founders think of our Welfare State?

I recently found this quote by Benjamin Franklin which shows incredible wisdom for it's time and for today. As entitlement programs continue to increase the national debt, which the people must pay through taxation for the most part, I see little improvement in the number of the so-called poor. I say so-called because there are very few people in the USA that can be called poor by the standards of the rest of the world. Here, we all have food, shelter, clothing, tv's, computers, cell phones, air conditioning/heating, multiple bathrooms per residence and much more, no matter where we fall on the economic scale. The difference between our poor and rich is simply one of quality: the rich have better cars, houses, clothing, etc. I can't help but think that the welfare state does more damage than good, on all fronts. He seemed ahead of his time on this point:

"I am for doing good to the poor, but I differ in opinion of the means. I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it. In my youth I travelled much, and I observed in different countries, that the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer." Benjamin Franklin - On the Price of Corn and Management of the Poor (29 November 1766)

So, my question to the forum is: What would the Founders think of our Welfare State? Does anyone know any other quotes from the Founders on the issue of Federal subsidies for the poor? Which Founder would have approved the most of the Social Welfare Programs we have in place?

 

I am sure the founding fathers would be disappointed. Not because of the Welfare state, but probably because of the number of freedoms they fought so hard to gain that the government is trying to wrest away from the citizens.

 

I agree that they would not approve of the lack of liberty we have today. I wonder if some of the Federalists would regret wanting such strong central powers if they could see the results. Of course, tyranny is tyranny even if it comes from the state and local level!

 

The delegates at the Constitutional Convention wrote a document that made the federal government as powerful as they thought they could get ratified by the people at the ratification conventions. Notice that they did not leave it up to the Confederation Congress or the state legislatures to decide to ratify it or not. They deliberately put it to the people to decide in order to bypass significant opposition from the state legislatures. Their notes and letters indicate that many of the delegates wanted a stronger central government than they created. The modern rhetoric today is nothing more than the wails of the people who are not in political power. See all of American history for lessons on that.

 

I just found out it's Benjamin Franklin's Birthday! Happy Birthday to a truly inspirational figure from the birth of our nation! May we have more like you in the future!

 

I don't think it was the delegates at the Constitutional Convention who are responsible for the overreaching Federal government which we "enjoy" today. Even a Federalist, if he could see what our system currently looks like, would be appalled. I think the blame largely lies with individual presidents like FDR and with the Congress for allowing the Imperial Presidency to usurp many of the functions which properly belong to the Congress.

Regarding the poor, not only does the welfare system disincentivize them from finding a job, it many times makes it extremely difficult for them to find a job and get off welfare even if they want to. Other regulations like the minimum wage laws very probably have the net effect of hurting the working poor and increasing the welfare rolls. I have been learning a lot about these topics by listening to some talks, debates, and lectures given by the late Professor Milton Friedman. I think he had a good understanding of these and other economic topics, and he has a way of explaining things so that the layman can understand them.

 

I completely agree about the Federalists.

I also have listened to several debates and interviews with Friedmann, and in general I like what he has to say about the role of the individual in economics.

However, he believed that consumption was the driver of the economy, an idea that I reject wholesale. Also, his monetary policy and support of the Fed's raising of interest rates during growth periods, are worrisome to me.

So, I guess he was a bit more statist and less capitalist than I would prefer. That said, he was less statist than the other economists of his day were and he was overall a very good thinker who advanced some excellent ideas.

 

Ok, I think Friedman really believed "Don't make the best the enemy of the good." While he may have liked a situation where the government only consumed 5-10% of the national income, he realized that the reality of the situation was such that that was unlikely to happen right away. So getting the government from 45 percent down to 40 percent was a good start in the right direction.

I think that he would have preferred certainly that there was no central bank deciding monetary policy at all. But given that The Fed existed, and that it often caused a huge increase in money supply, they certainly could decrease the money supply at appropriate times. Not as a positive good in itself, but as a corrective to their earlier actions - to remove or at least partially ameliorate the market distortions caused by their normally inflationary monetary policy.

I think similar things were going through his mind when he proposed the NIT, or negative income tax, as an alternative to the vast array of Federal welfare, housing, and employment programs. He didn't necessarily think that such a scheme was beneficial to implement in any and all societies. But in a society with huge expenditures and huge waste in welfare programs, the NIT was a big step in the right direction, in his opinion.

 

That sounds pretty true, based on what I know of him. He was a pragmatist, which I don't think is the right approach. I applaud his efforts at a reduction in government, but he just did not go far enough, in my opinion.

If a country has "huge expenditures" that are immoral on principle (income redistribution, penalizing wealth creation, inflationary monetary policy, etc.) then the answer is to cut spending and change monetary policy in "huge" ways, not merely whittle around the edges.

He was willing to concede too much economic power to the Fed and the central planners.

Overall, I believe he was a force for good on the planet, but not able to defend and promote capitalism because of his pragmatic bent. He was a brilliant man and a great communicator, I just don't agree with many of his recommendations.

 

The question is what would the founders think of the tax rate today.

You get a big % deduction from your salary for income tax.
You pay % tax when you go shopping.
After you purchased your house, you still have to pay property tax like if you are renting your own house...

Have you actually calculated how many total % of your real income is paid to the government as tax?

With such heavy taxation on the people, the government is still running a red number every year.

Wasn't one of the biggest reasons for the revolt = heavy tax on the colonies?

 

vashstampede, I think about that everyday, for I think the tax burden on business and individuals (since many business owners file as individuals) is slowing economic growth to near zero. We will not see unemployment figures rise until this burden is lifted.

In addition, printing money further devalues the dollar. And, just yesterday, I read that the SEC is barring the rating agencies from lowering our currency ratings! The central planners think they can change the reality of the situation they have created by silencing those speaking out about it!

http://www.washingtonpost.com/busin...c88ba2-64c5-11e2-889b-f23c246aa446_story.html

I think our founders would be ashamed of the mess we have made of things, given the generally good start they gave us.

Talk about taxing our TEA?

To quote the proud Hilary Clinton on her first trip to China, a couple of years back, "In American, if it moves, we tax it."

 

The history of America reflects that during the 1950s and 1960s when the country had a much higher tax rate (90% for the top earners) the economy did much better. So the fiction that taxes are oppressive now is just that, fiction. Also, tax policy does far more than just yield revenue. It also influences monetary use of higher earners. People often overlook that major point of policy.
As far as the Founders, it is impossible to say what they would think because their world was so much more different than ours. They also believed in taxation while others disagreed on the issue. So it is impossible to say what they would or wouldn't have done on that issue because they didn't agree on it themselves.

The Revolution had many causes. Taxation was just a symbol of the British Parliament and its changes to its colonial policies following the Seven Year's War. There were plenty of problems with the inequity of wealth as well which was borne out by the revolt of class based mob actions for years, some of which stretched back into the late 17th century in Boston and New York. It is important to recall that Americans were not united in their desire for independence. The Loyalists generally were of a conservative nature and often represented the landed elites or those who controlled political power in many cases. Connecticut is a very good example of such a colony with differing views along those lines. Of course there were no absolutes because many of the men in the Continental Congress were also among the elites in their respective colonies as well, but in most, but not all cases these men were often the first of their families to gain political power or a higher education whereas many of the Loyalists (in this case opposing members of the same social class) were from those who held power or wealth far longer in their families.

It is also important to note that before, during, and after the Revolution those who participated in it often argued among themselves as to what it was about, its cause or causes, and what they fought for. In many cases there were all hundreds of different opinions which really was a reflection of people's personal interests just like each of us have our own interests that motivate us in the decision making process. (Hence right/left rhetoric today).

Basically what was a cause of the Revolution for one person was not for another. One thing is clear and that is the British government was inept and contributed greatly to the problems leading to the Revolution and had plenty of chances to defuse the situation. To their credit though we have to realize that no one had ever encountered the situation they were facing on either side of the Atlantic so they literally were going where no one had gone before. Hindsight is a wonderful thing. Also, the leading economic system at the time was mercantilism which played a significant role in how the world worked in the Atlantic World trade systems for centuries. Despite Adam Smith's new ideas published in 1776 in A Wealth of Nations, the concept of mercantilism would still be guiding international trade policies for many nations late into the 19th century.

 

I think there are enough direct sources available to determine the causes of the Revolution and the founders opinions on taxation. All is not a gray blur of subjectivity, no matter how prevalent that line of (non) thinking is within our institutes of higher learning.

 

@ Skyblue,
Don't worry. China is following the U.S. in every way. They just started to implant the property tax in order to control the ridiculous housing prices which was getting out of hand because too many people are using loans to buy many homes and in return these homes' prices doubles every a few years because all those buying...

@ gloine,
I believe there should be an option for everyone to choose if they want to pay certain tax or not.
Not everyone wants those "benefits" like "free" education and medicare. Some people would rather send the kids to private schools and buy their own medical insurance or pay bills without insurance. The choice should belong to each individual.

 

If the choice to pay taxes should belong to each individual, though, then why not eliminate the tax, and then each individual has even more choice.

I am with Skyblue here in that I think that the federal government is way too big. And I think that taxes are only one part of the equation. Really the problem is the huge share of GDP which is taken by government. Whether it is financed by taxes, inflation, or debt is secondary.

Regarding the economy being better in the '50s and '60s, that is more likely due to the United States being the only major country to emerge unscathed from WWII than to high tax rates.

 

The problem is that most people fail to understand how tax policy works. They focus on the tax rate and the amount paid, but don't realize that tax policy is more than that. It is about using a policy to persuade people to do things that they would not without the policy existing to get them to do it. Taxes cannot be optional in a national system. It's an all or nothing system.
Also Sky, if you like to use primary sources then use the ones that disagree with your ideas as well. Use context too becasue what I find is that most people pick and choose the sources that they agree with and ignore the rest of them because the rest present facts that disagree with the opinion. So your argument fails because the academic community spends lifetimes researching all the facts to develop their ideas. If you think taxation was the only issue then you're ignoring 95% of the rest of the primary sources.

 

I am well aware of how the tax code is used to manipulate the behavior of the public. Social engineering has been around a long time. I find the practice immoral and I think the Founders would agree that it is not the government's job to tell people how to spend their money and live their lives, much less what to consume. This is a socialist idea that has been used here at least as far back as Prohibition, which was illegal on it's face.

Regulations are at least as damaging to the economy as taxation and they are another socialist idea that took hold over the last hundred years with the unending help of nanny-state academics.

As for primary sources: the best primary source is one's reasoning mind. Something that most academics cede in order to become the power mongers that they are: devoted to suppressing dissent in young minds and furthering subjectivist thought and groupthink.

Have fun in your Ivory Tower, for now. The edges of your Tower are crumbling from the realities of the information age. Competition is what you fear the most, but now, anyone can learn the falsehoods that have been trumpeted from the Towers and individuals are free to break from the chains of the corrupted institutions of higher learning!

Why? Because, the academically prescribed economic policies have resulted in bringing the economy to a dead stop and your degrees mean nothing in today's world, except debt and the depravity of mental slavery.

One person, with a productive idea can do more TODAY than a thousand degreed sycophants and individuals are beginning to see their own power. Go slump away in the cobwebs of your faculty lounge and leave me alone.

 

Well Sky, since you are so fond of finding all those direct sources and know them so well you will find that the Founders were key in introducing reform into American society with one of the main Founders, Ben Franklin being one of the most prominent. But I'm sure you know all this because you have already looked up all those sources which clearly show these facts.
The information age is great and we're on the cutting edge of it. Unfortunately for you, it is also the misinformation age as well which you are a leading example of. When you study the facts you will find out your beliefs don't hold up. Of course that would mean you would "study" actual "facts", not just what you want to hear. So wallow in ignorance and enjoy it.

A primary source is a document from the past, not what you want the past to be. A reasoning mind examines the facts from those primary sources. Your brain is definitely not a primary source. It is an echo chamber of ignorance because you don't believe the facts because they contradict your beliefs.

To put it mildly you are just running your mouth and can provide no factual evidence to support your beliefs. Until you can do that I suggest you just shut your mouth like you have already shut your mind.

 

The failures of academia are self evident in the failed policies all can see, in real time. No source needed other than the desire to look at reality.

Of course, looking back at the things I have witnessed, that have happened in my own life and seeing cause and effect in action, is an original source of information and learning.

Only, an academic would say or think otherwise.

 

It is an original source, but one that lacks context beyond your scope of personal observation. That is your issue and others like yourself that don't like anything but your own opinion. You lack context to place them in. That isn't to say your observations do not count or are meaningless. Those become primary sources like everyone else's. However, they are placed within the context of the era in which they exist along with everyone else's in order to gain a picture of what was or in this case is going on in that era.
The end result is that you have your opinion while I have mine. I think I do a better job of using factual information to determine what is going on and what will happen compared to you who use beliefs to determine the same. Both of us allow our personal hopes and desires to color the opinions which is what is known as bias.
Academia isn't failing at all no matter how much you hope it is.