Food / Government Assistance

[workathome]

Here's a list of areas that don't asset test:

http://frac.org/newsite/wp-content/uplo ... t_test.pdf

Seeing that most people's investments would pay below poverty level:

http://www.cbpp.org/cms/index.cfm?fa=view&id=1269

It looks like an individual would qualify for $150-$200, which is far above most current ERE food budgets. Because food is one of the largest parts of a yearly budget (say, 25% of a $7,000 budget?) it could certainly speed up early retirement.

Personally I don't think there would be moral qualms and it could be considered similar to advocating for a guaranteed minimum income, etc. - some parts of this program are already there and available for those interested in using it retire even more extremely early. *

* I understand this site certainly does not advocate this, and I won't be doing it, most people here probably disagree, etc. - but it appears a possible option to consider for a desperate person who really needs to bail on their current work situation.

[SimpleLife]

If you paid more into the system due to high income, what is wrong for benefiting from it when you live below your means?

[sky]

I don't see a moral difference between legally using a government subsidy program such as SNAP, and using legal methods to reduce one's income tax with tax code methods.

The moral problem begins when one is not truthful about the qualification criteria.

[C40]

The moral (or is it ethical?) question relates to the majority of the citizen's assumption that people should only use this assistance when they are incapable or currently trying but failing at providing for the food themselves.

For us, the interesting part is (for a retired ERE person):
- That we can live comfortably on what they consider poverty spending
- That our income is that low intentionally (or that we're not trying to increase it)

These basically make the reason for that assistance null for us. But does that matter? Probably depends on your opinion of what the point of government is.

[workathome]

For the sake of the thought expirement, I wanted to take this to its logical conclusion. This is based on a "what if" financial situation involving the bare minimum my family of 3 would need to be free from work while making use of existing low-income programs.

For this experiment, a cheap house in town with no car (e.g. $80,000 house near bike trails in Traverse City, MI), no unexpected expenses, no travel, etc.

Budget:

Shelter:
------
Property Taxes: $900
Insurance: $360
Utilities: $600* (LIHEAP assistance may reduce this further)
Maintenance: $500
Total Housing: $2,360

Everything else:
-------------
Food: $0* (SNAP / EBT benefits)
Health Insurance: $60* (Michigan's Expanded Medicaid asks you to pay 2% of yearly income)
Medical / Copay: $50* (Michigan's Expanded Medicaid asks $2/visit to doctor, $2/medicine, etc.)
Phone: $0 (Safelink / Low Income Phone)
Clothing: $100 (Goodwill / Salvation Army)
Household Goods / Misc: $300
Total Everything Else: $510

Total Yearly Expenses: $2,870 (or $1,435/adult)


Assets to support expenses:

House: $80,000 ($40,000/adult)
Vanguard High Dividend Yield ETF @ 3%: $95,667 ($47,833/adult)
Total Required Assets: ~$87,833/adult

In reality, Michigan wouldn't allow you to have the $95k ETF and still qualify for the low income programs, but they do exempt your primary residence. In that case, you'd be better off putting all your money into the home and renting out an extra room or getting a part-time gig to cover the $120/mo in living expenses per adult.

Bonuses: I'm not optimizing the situation, with the one child there's some additional benefits available (e.g. TANF is a straight cash benefit, which would provide ~$280/month for the family and cover all of our expenses in addition to contributing ~$40/month to our savings or investments). Housing situation could be optimized better. You may also qualify for rent reduction if you wanted to make it work with a $0 asset base. I'm basically shooting for a middle-class lifestyle minus the car, so I avoided going that route. Also, while EBT doesn't allow you to buy alcohol, you could buy cheap grape juice and yeast out of the surplus from the food stamps. You could also create your own cleaning supplies from vinegar (or turn your grape juice into vinegar, lol), etc. If you're stuck with college debt, you may also qualify for student loan deferral or even forgiveness after 25 years of low-income-based payments.

(Disclaimer: Agreed that this isn't "ERE" because one replaces financial independence with financial dependence on government assistance, but it would certainly provide more free time. Maybe take a year or two to build a successful entrepreneurial business, invent the cure for cancer, etc. Information above may be completely incorrect. I won't be using any government assistance, but was just curious what might be possible).

[sky]

I disagree with the assumption that the programs were put in place to safeguard the unintentionally poor from hunger.

The programs have clear criteria as to who is eligible. I am not sure why someone who is eligible should not receive the benefit.

[workathome]

@work
Why stop there? Food banks, church charities, government housing, panhandling, WIC, working for straight cash, free school lunches, Meals on Wheels, secret santa, Toys for Tots, remaining a "single" parent even though both parents living together, perhaps a church could adopt you for their feel-good charity, everybody wins! You get the loot and all the parishioners feel great about themselves.

My reply has two parts:

1. Aside from your specific examples, you are addressing the central ethical issue, which would be up to an individual to decide. I don't know that individual or family's situation, but they may indeed feel a pressing and real need to escape a terrible work environment. They then could make temporary or permanent use of available programs.

2. With regard to your specific examples, my thought experiment was limited to using Public Assistance. These programs are generally different from the private offerings in that they are bureaucratized and only demand certain criteria matches (e.g. review "Obamacare" requirements), while the private programs have a very explicit "for the needy" charity focus. I also feel any discussion of illegal activities or outright lying is wrong and not part of this discussion, which IMO excludes faking "single parent" status, committing fraud to qualify for benefits, working under-the-table, pan-handling, etc.

Like me, it sounds like you would not use these programs - but I found it intriguing that it's theoretically possible to essentially receive a "minimum guaranteed income" off existing socialist programs in the US which could provide enough support for a frugal/skill-based/ERE lifestyle. It also could serve as evidence that problems related to poverty [in the US] are more about lack of skills and knowledge (or maybe mental health problems, addiction, etc.) than about lack of money.

---

Finally, if you'll permit, I'd like to play "Devil's Advocate" and argue the reverse - that living free-and-frugal off Public Assistance or otherwise is not only good, but everyone should feel duty-bound to do so:

Most work is essentially useless and pointless - in fact, it's far worse, it's actively destructive - contributing nothing other than supporting cancerous economic systems. That is: drill oil, turn into plastic junk, throw pollutants in the air, throw junk in landfill, burn tons of coal to run the machinery, waste millions of peoples time filing TPS reports.

This death-machine will eventually wipe out billions of human lives and cause irreversible damage to all animal life and plant life, while emptying out virtually irreplaceable natural resources all in order to fuel a short-lived, evil, psychotic, materialistic consumerist pipe-dream for another hundred years. It is every aware person's critical duty to stop contributing as soon as possible. While some people desire to work and save for their freedom, the people who find a way to use available Public Assistance or other methods to immediately stop helping this evil death-machine and instead spend their time on "Sisyphus' burden" are far more ethical and good than those who instead opt to continue destroying for a more comfortable and independent lifestyle in the future.

[sky]

That is subversive. I like it.

[workathome]

@ffj - You are making the conservative argument (and I agree with you!), but many people honestly disagree. The emerging attitude is that the government has a right to everything, and what isn't taken/taxed is a benefit being given to you. Also, policy enforces this attitude as no taxpayer has special benefits related to how much they contribute, and virtually no oversight and limited control with regard to redistributions. Liberal politicians actively encourage use of government programs and increased dependence even among those who don't need it (see link in the first post, asset testing is being actively and successfully lobbied against). Also think about the term being used: "entitlements" taken literally and not as critical.

[workathome]

I just now read the second part that you have added at a later time. I don't know where to begin. Time for bed.

Don't worry about it, I'm just playing "debate club".

[IlliniDave]

I think I come down largely on the same side as ffj on this one in terms of how I'd behave myself, but I wouldn't blame people that honestly meet whatever criteria set forth for the handouts for taking them.

At the same time as a taxpayer both now and in the future, I will be in favor of reforming such programs so that the government is not taking money away from me and handing it over to people who are capable of feeding themselves, but instead prefer to make a career out of navigating loopholes to let me feed them. Unfortunately, it's probably not possible to make iron-clad screening criteria without making the programs unwieldy and difficult to access for people with a true need.

Parasitism is a well-established survival niche in nature, and likely we'll have to endure it in human society. The trick is stamping it down enough it does not kill the host.

[sky]

The asset limit for Michigan is $5,000. So no ERE aspirant will qualify.

https://michigan.gov/dhs/0,4562,7-124-5 ... --,00.html

Yes, as demonstrated millions of times over in the United States. This is not news, this is a problem. Seriously, when too many people overburden a system not designed for them then they will eventually deny the care and attention to the very people the system was designed to help. Either the system will go bankrupt, or the givers will become so jaded the funding will cease. Sometimes I view these things as almost a pyramid scheme.

Do you plan to participate in social security?

[workathome]

The asset limit for Michigan is $5,000. So no ERE aspirant will qualify.

I addressed this above, as primary residence is exempt. Also, one could look at the link of states which do not asset test in the first post.

[jennypenny]

Do you plan to participate in social security?

Social Security is intended for everyone.


I don't think all government programs should be lumped together. SNAP is part of Welfare and is only intended for those in need of help. EREs don't need help. Social Security is intended for people with a long-enough work history or their spouses.

If my ERE relied on jumping through hoops to make sure my income level was optimized for maximum government subsidies and benefits, I wouldn't consider myself ERE. To me, ERE is all about independence and not having to structure my life around anything other than my own desires.

[leeholsen]

Do you plan to participate in social security?

When Jacob hits 62, he's going to have more money than than he knows what to do with.

[workathome]

Yeah, anyone who actually did this definitely wouldn't be ERE! Yet, they could take 1-2 years worth of assets saved from a job, quit/get-fired/laid-off from their job, and then transfer their dependence from work-income to government-income while having the free time of a retired person.

[JohnnyH]

I'm going to do it, the absurdity of someone like me legally collecting benefits is amusing to me. And they owe me. And feeding me is far less objectionable, and potentially evil, than most of what they spend "their" money on.

Sure, somebody else would be feeding you. But they would also be taking away your ability to be independent on your own terms.

I'd argue I'm feeding myself until I get all the income taxes I paid back + interest using the same calcs the collectors use. And if anything it increases my ability to be independent.

Why stop there? Food banks, church charities, ... , panhandling, WIC, working for straight cash, free school lunches, Meals on Wheels, secret santa, Toys for Tots

What are programs that never used the threat of violence and imprisonment to collect a percentage of my earnings?

[gerry_b]

As much as I might have been previously inclined to agree with FFJ, Sky and Johnny H destroyed that argument.

I probably wouldn't partake in these government subsidy programs, mostly because I suspect they'd be more trouble than they're worth. However, I have zero qualms with someone who has worked hard, paid into the system for X years, retired, and now collects benefits.

As Johnny H said, it's their money!

[jennypenny]

Keep in mind that I'm a small government libertarian making this argument...

If the argument is that you 'paid into the system' so you're entitled to take your fair share back, then it comes down to a difference in how we view the federal government. I pay income taxes that provide a military that helps to guarantee that I live most of my life in peacetime. I pay income taxes to provide a stable government that guarantees that our currency is still the go-to currency in the world. I pay taxes that support a host of agencies that improve my life including the FDA, CDC, FAA, and many others.

Very little of my taxes go towards programs like SNAP or FEMA. I feel like I'm a lucky, lucky girl if I never have to use those services. I'm also glad they exist because I don't want to live in a country where people who need those services (short or long term) can't get them. It's in my best interest to make sure that the government provides a 'floor' on poverty to help maintain the country we've built.

I still see paying into FICA as different because it's intended for everyone, but I would support it even if they instituted a means test and we were disqualified. It has supported people we know who haven't saved enough for retirement. Judging from our relative's finances, it will support the bulk of them in retirement. Without that, they'd be knocking on my door. It's so much easier for us to pay into FICA knowing that we won't have to deal with that headache.

----

I also don't think 'getting your fair share' is necessarily a monetary payment. Someone who's stuck in urban poverty might receive some kind of welfare benefits their whole life and never pay much back into the system. OTOH, they will probably never avail themselves of other federal benefits that you and I enjoy including national parks, air travel, consulate services for travel visas, investments in TIPS or I Bonds, etc. Which benefits are more valuable?

[sky]

In the US, most social subsidies are provided through the tax code. There are many different deductions and credits that for the most part serve to encourage people to live and earn money in a certain way (social engineering).

Person A itemizes deductions and includes the mortgage interest on their McMonsterMansion.

Person B takes advantage of the SNAP program (food assistance).

If both persons honestly qualify for the subsidy they are requesting, why should either of them be ashamed?