Food stamps, medicaid, for ERE

[enigmaT120]

I love the parallels of welfare recipient and rentier classes exploiting the producers.

This discussion is reminding me of another of Jacob's posts, but I couldn't find the link. If anybody knows where it is please post the link and I'll try to save it. But I did save it in my email program:
http://earlyretirementextreme.com/how-d ... works.html

"In this post I’m not going to use political euphemisms. I am going to name people or groups of people according to their function rather than what the name implies. My goal is not to join any particular group as much as it is to remain independent and unaffected by this game.

There are four groups of people in a democracy: The political class, the underclass, the middle class, and the upper class.

(There’s also a military class, unless you live in a really unstable country, this class is mostly dormant.)

Here’s how it works.

Due to the democratic nature of the world (people can vote or take up arms) it is in the best interest of the politicians to transfer money from the middle class to the underclass to such an extent that the underclass has no interest/incentives in leaving (on average) due to the gap between being government-supported and self-supported. This keeps the political class in power.

[This interest can either be rationalized self-interest or it can simply be tradition. For instance, a few people possess sufficient agency and volition to change their class. Most people just do what everybody else does: The middle class get good grades, go to college, get a degree and a career, etc. The underclass get poor grades, get a sequence of jobs interspersed with government assistance, etc. The upper class get networked into their positions of power through the old-boys and expensive-school networks. And so on.]

On a side note, the upper class has a similar arrangement of wealth transfer from the middle class; here in terms of government projects (bridges, fighter planes, TARP, etc.). Government money never goes to middle class (except the stimulus change a couple of years ago). Instead it goes to projects that the middle class can not directly participate in due to lack of organization. (The upper class is organized in corporations.)

What does the middle class get out of this? One word: stability! Yet they pay a huge sum for it, and lately it’s been questionable just how much stability they really got.

You find this in all democracies, but it is typically masked by superficial ideological arguments of party A against party B or country A’s methods are better than country B. The confrontational view is easier to understand and easier to get excited about come election time.

However, if you go with the ecosystem understanding or the four-kingdom understanding, it is a lot easier to see the context of how everything works and how political parties and countries are more similar than they’re different.


1) On a rudimentary abstract model level, the system is like this ...
viewtopic.php?p=99180#p99180

Note that only the middle class creates wealth, hence wealth (the production of stuff, roads, iThings, ice cream, TSP reports) flows from the middle class to the upper and lower class. In return the middle class gets stability.

2) The lower, middle, and upper class operate with very different and mutually incomprehensible sets of morals. It is almost impossible for one groups to sympathisize with the others. A characteristic of the middle class is the strong emphasiz on equally-priced-exchange. You can test which class by giving your test subject something of value. If this gift makes the subject emotionally/morally uncomfortable until they've returned something of equal value, i.e. "paid for it", they're solid middle class. The upper and lower class will see the "gift" very differently.

1+2) The task of the political class is to dress the payment transfer system (from the middle to the upper and lower, respectively) up in words that appeal to the morals of the middle class. (Because they're the quantitative majority. The vote that counts. The source of revolutions. So it has to look good to them.) From the perspective of the money flow of person X, it doesn't matter one bit whether you take $100 in taxes or you take $150 and then allow a $50 deduction, or you take $160; allow a $30 deduction, give a $10 credit, a $10 subsidy, and pay an extra $10 without mentioning it. However, morally, etc. it matters greatly. See this thread. Hence what's important is that whatever we call taxes, whatever we call deductions, whatever we call credits, whatever we call subsidies, and whatever we definitely do never mention (just like we never mention the existence of water to the fish) are all mostly determined by middle class values.

This is why policing (which is not mentioned but just taken for granted, like water---you don't want to tell the middle class that they're directly paying for the stability because they must take it for granted lest they start questioning the foundations of the system they're supporting) is not called a subsidy (and given out in disproportionally large amounts to richer property owners); why health care is not a tax (but a mandatory rule with a credit); and so on...

3) It is in the interest of the other classes and even to some extent to the middle class that the middle class doesn't realize how the system works (there's stability and safety in ignorance---which is also a family value, you know) and instead spend their time arguing left/right wing positions that mainly serve to play the upper class and the lower class against each other by proxy (in reality they're barely affected) ... ironically while arguing in middle class terms. Obviously, this works quite successfully as this system has been stable for quite a while. Divide and conquer!

In many ways the classes comprise a eusocial arrangement with the groups feeding on each other and providing various services back. The middle class is mostly blind to anything that doesn't involve the concept of "paid for it". Of course the other classes tend to be blind to other concepts.

4) From the perspective of the individual, the system is fixed. There's nothing you can do to change the system. But you can greatly change your response to the system when realizing what is happening and why. That whole Matrix or Plato's Cave thing again. Fundamentally, it's just cash flows. It doesn't matter to the financial transactions whether politicians call them credits or taxes. It's still dollars. You can call them whatever you want but good luck if you want to convince someone else to call them by the same names that you do."

I added in the missing word "creates" above, as it makes a huge difference in his description, and is so counter to what we usually hear.

Anyway, the above post made me think that things like what 7WB5 is considering just don't make any difference in the real world. They won't change the picture. Only a violent revolution would do that, and if it happens the ruling class will have really screwed up.

[JL13]

But when tax revenues are used to support more (and often inefficient) consumption?

right, that's why I'm ok 'morally' with taking out of the system. If 7W5 takes $40 out of consumption and puts it towards some fresh produce, that a way way way more efficient outcome for society than if the person who originally had that $40 filled up their SUV and sat in traffic for 3 hours burning it up.

[Ego]

@ffj, I agree with most of what you say in your post. But then I thought about all of the young people being hired on today as public safety officers. I wonder if they might look at someone like you in the same way your are looking at they hypothetical food-stamp-collecting 7w.

I don't know how your city is doing, but in many places the new public safety officers are hired with a fraction of the benefits of the old veterans, in part because years ago the unions rigged the political system and stacked local governments with those who voted for outrageously unsustainable retirement packages for their members while at the same time underfunding plans. So veteran officers retire with sweetheart health and retirement benefits while new officers get plans that are the aftermath of pension plan reforms. At least that's how it has worked out in my city.

Let's say for the sake of discussion that you are collecting from a pension system that was underfunded for decades because your union rigged the system. How would that differ from what 7w is thinking of doing?

NOTICE.... I suck at communicating tone. Had we been sitting at a picnic table talking about this, we both would have smiled when I asked that last question. I mean it to be a friendly discussion where we learn from each person's perspective.

[steelerfan]

People that live their lives and adopt an attitude that I am responsible for taking care of myself and everybody needs to do the same hate the slop that is built into any system where a group of people participate and not everybody is on board with their way of thinking. I am such a person and it upsets my sense of right and wrong when someone does not see things through the same lens. Being an INTJ only makes matters worse.

You can always make an argument for some needy party that for one reason or another can't live without some assistance. The difficulty is where to draw the line and who gets to draw that line. There are always people that can technically qualify for a handout or some benefit even though they are able bodied otherwise. There are also people that are otherwise independent that give the takers a free pass. Some times they are do gooders or "take the high roaders" but not always. Sometimes those individuals actually profit from the slop and participate directly in it.

Similar to ffj, I also have a tshirt story. I was a treasurer for a booster organization that raises money to provide support for a sports program. The coach orders printed items to sell at a small profit. But what he does is order more to sell it "later". Not exactly the hard order I wanted and insisted on. So we end up collecting 2/3 of the cost for something that was supposed to break even at worst. The coach ends up with extra tshirts that he can sell "for the program" and use the money as he see fit. There are also kids that can't afford a shirt and somehow end up with one... The president of the org is selling the tshirts and making a profit. This is one example of a basic pattern of behaviour in this org. I left this position as I did not want to be associated with it.

These people are all "good church going people". They see the slop as charity and also are justified if they somehow get a benefit as well. They make the argument that it is the way things are done. It IS small money. But the people that pay in and raise money trust the org to do the right thing and be transparent are not being served honestly. Certain people get things that they did not pay for. And others profited from the way things are.

Obviously you can see where I line up in this argument. This thread made me angry last August and it makes me angry again.

[Sclass]

Just do it 7w. Then show some of the needy folks in your neighborhood how to do it.

I was wondering about a sign I saw at the Newport Beach farmers market that said "we take EBT". It was funny because you literally fight with rich people (I won't say upper class because a lot of them act like lowlifes with dough) to park and shop. Nobody uses EBT cards there. I thought the sign was a joke...like a soup kitchen on rodeo drive.

I'd do it but I don't know anybody poor enough to teach. Seriously this must be one of the most under utilized subsidies out there. Most of my farmers market vendors take cash. Only the biggest have the EBT signs.

And you'll be supporting the farmers markets. These are the greatest things That have happened around food in years. I think I'll go down to my local one now and give tips to my favorite guys to make sure they stay in business.

Edit- My two life experiences that bring me to this thinking were 1) living with a welfare mom who fed her daughter looney tunes TV dinners and 2) waiting in line patiently behind some gangstas in Oakland CA trying to buy an iPod touch with an EBT card and failing for 20 mins. I wasn't about to yell "yo brotha hurry up!"

People who get these subsidies need to learn how to efficiently use them. The ones I see on TV saying they cannot feed a family of four on $800 need some schooling. You'd be doing a service and maybe it would go viral. (I wish)

Obviously giving them money or even 2x money isn't working.

[jacob]

I case I didn't post it before, this discussion reminds me of the different answers to the Heinz dilemma

[Ego]

I agree on the importance of being one of the responsible ones, or at least trying to be. But there are times when the system bumps against other areas that are equally important - living frugally with minimal impact, for instance - that one is forced to choose between being responsible and being true to oneself.

I could earn more and pay my fair share for the roads on which I ride my bicycle, or I could earn less, spend less and be a free-rider. I guess you could, in theory, calculate the difference between the pension benefits you receive and what a young recruit would get if they were in your shoes thirty years from now, then write a check back to the pension system for the difference.

Complex people interacting with complex systems rarely produce simple problems with simple answers.

[George the original one]

Also, your opportunity to transfer funds to your pet interests is not a valid reason to take money from taxpayers.

Isn't that what every corporate lobbyist asks for? If it can be done legally by corporations and businesses, then I don't think there's a moral problem for an individual to do so.

[jacob]

There's also this: viewtopic.php?p=99180#p99180

Now, if those $40 were available, not by going through the SNAP bureaucracy, but as a tax credit on form 1040 (Check the box and multiply the number of dependent by 40 and add to the line), would people still make the same moral choices? Probably not. Why? See link above.

[Spartan_Warrior]

As long as any folks crying about welfare for human beings are wailing proportionately louder about all the corporate and military welfare, which also costs proportionately more, and delivers proportionately less.

If you spit in the eye of a welfare recipient and still shop at Wal-Mart, you are a hypocrite.

[enigmaT120]

If you spit in the eye of a welfare recipient and still shop at Wal-Mart, you are a hypocrite.

Short and sweet.

[enigmaT120]

There's also this: viewtopic.php?p=99180#p99180

Now, if those $40 were available, not by going through the SNAP bureaucracy, but as a tax credit on form 1040 (Check the box and multiply the number of dependent by 40 and add to the line), would people still make the same moral choices? Probably not. Why? See link above.

Thanks for the link that I was searching for. Will you please go back and edit it to add the missing word "creates" or whatever synonym you intended to have there and left out?

[jacob]

Fixed. I added them to your post.

[Spartan_Warrior]

Wal-Mart is the biggest recipient of public assistance in the country. They've perfected the art of the corporate welfare queen:

Step 1: Pay workers poverty wages, forcing them to sign up for public benefits to put food on the table--in effect shifting responsibility for the rest of these workers' incomes from Wal-Mart to the taxpayer.

Step 2: Exploit loop holes to avoid paying billions in taxes that fund the very programs Wal-Mart is exploiting. Loopholes like "...a little-known loophole to avoid an estimated $104 million in U.S. taxes by granting extravagant “performance pay” bonuses to top executives. You read that right – the more Walmart pays its executives, the less it pays in taxes."

Step 3: Reap billions in profits when food stamps are spent in Walmart stores.

http://www.jwj.org/walmarts-food-stamp- ... easy-chart

Feel free to google "Walmart corporate welfare" and read for yourself if this source doesn't pass muster. But at the end of the day, shopping at Walmart means enabling CEO Doug McMillon and the Waltons to subsidize their $25 million welfare checks--I mean, "executive incentive packages" on the backs of public programs.

(P.S. The obvious solution to this abuse by Wal-Mart would be raising the minimum wage. )

(P.P.S. Needless to say, while particularly egregious, Wal-Mart is just one example.)

[7Wannabe5]

ffj said: So by the logic of both your posts then it would be acceptable to take something from both of you, because I felt I could repurpose it for the greater good. Let's pretend that every time you guys grow something in your garden, just as the fruit and vegetables ripen, someone comes along and rummages through your garden and helps themselves, leaving you guys with the leftovers, which isn't enough to justify the hard work you've put into the garden. When the thief is confronted, he explains that his family cannot afford food because he donates all of his money to the local orphanage, and since you two do not, then he has decided his moral compass allows him to steal your food for the higher cause in his imagination. How much longer do you guys suppose you will grow a garden? Probably not long.

In order to make this analogy work, the thief would have to be raiding my garden at a tax rate proportional to the productivity of my garden. So, if my garden was moderately bountiful, the thief might be taking 25% of my produce and indirectly transferring it in the form of cash to the local orphanage. When you are engaged in perma-culture, human theft is a natural vector you will encounter just like squirrels eating your hazelnuts and heavy winds with hail. A 25% "tax" at the boundary going to indirectly fund an orphanage would either have a neutral or positive effect on my gardening effort, depending on how many apricots I wanted to eat myself, etc. etc.

If you want to keep the benefits coming then I wouldn't abuse the system or the people who prop up the system with their hard work too much, because they may choose to opt out rather then fund other people's demands on their time and money.

I think they should opt out to a large degree. I think a universal work week of about 16 hours would be ideal. I believe there is currently too much wasteful production, as well as too much wasteful consumption. For instance, I might not choose to manufacture new t-shirts to sell for a charity when there are already tons of used t-shirts available on the market. Of course, there is some needful work that ought to be done, and more people who currently are unemployed or underemployed could work 16 hours/week at a high wage, if fewer people were willing to work 40 hours/week at a low wage. Ideally, this would leave one day a week for each citizen to volunteer at community work, 2 days for creative work and 2 days for complete relaxation. I think most people are kind at heart, so if they only worked 16 hours/week, they would spend about one day a week providing direct assistance to the most needy people in their community, so welfare programs administered by the government would then be less required. I think it is terrible that you were required to work 56 hours/wk for so many years. That probably had some long-term negative effects on your health. I hope you are taking very good care of yourself in retirement.

[theanimal]

Wal Mart Costs Taxpayers $6.2 billion in public assistance(Forbes)]

Walmart’s low-wage workers cost U.S. taxpayers an estimated $6.2 billion in public assistance including food stamps, Medicaid and subsidized housing, according to a report published to coincide with Tax Day, April 15.
....
“It found that a single Walmart Supercenter cost taxpayers between $904,542 and $1.75 million per year, or between $3,015 and $5,815 on average for each of 300 workers.”
....
“Walmart told analysts last year that the company has captured 18 percent of the SNAP market,” it reads. “Using that figure, we estimate that the company accounted for $13.5 billion out of $76 billion in food stamp sales in 2013.”
....
“More than 99 percent of our associates earn above minimum wage,” he said. “In fact, the average hourly wage for our associates, both full and part-time, is an average of $11.83 per hour.”
....
“The bottom line is Walmart provides associates with more opportunities for career growth and greater economic security for their families than other companies in America,” he said. “Our full and part-time workers get bonuses for store performance, access to a 401K-retirement plan, education and health benefits.”

Hargrove added that the number of Walmart employees receiving Medicaid is similar to the percentage for other large retailers — and comparable to the national average.

Wal Mart Corporate Taxes

Pretax income: $22 billion

Provision for income taxes: $7.1 billion

Net income: $14.3 billion

Tax rate: 32.4%

Sales budged less than 1% for the discount giant, but net income climbed 6.7%, helped by a slightly lower tax rate.

[7Wannabe5]

ffj said: You are much more of an idealist than me, that's for sure. I think we are down to ideologies at this point, and ours clearly differ. Thank you for a lively conversation and a willingness to discuss ideas. I know I can be heavy-handed at times.

No worries. Here's how I describe my ideology on my dating profile:

6) Politically, I might call myself a Compassionate Classical Liberal because, if the personal is political and vice-versa, I would like to live in a world in which I could do, think and say whatever I please, but everybody would still have to be nice to me.

AKA Sesame Street Anarchist

[jennypenny]

Whatever you think of Walmart's corporate policies or corporate welfare in general, I'm not sure what that has to do with personal behavior wrt SNAP or anything else beyond whether you choose to patronize the store? "They're cheating, so I'll cheat, too" is a pretty thin justification for anything. If you're mad that the system is being abused by others, how does adding to the drain on resources improve things or even make the point I assume you're trying to make?

------

This biggest objection I have* is using assistance to fund whatever your lifestyle is, and then calling it an ERE** lifestyle. One of the most frequent and most annoying objections to ERE is the accusation that anyone who retires young must be 'milking' the system, on welfare, or living off of someone else (spouse, parent, etc). Not true! To my mind, the biggest selling point of ERE is the freedom it affords people. Taking jacob's advice to develop diversified resources and a resilient lifestyle grants a person unqualified freedom. Agency and control are key components. I don't think a large bankroll is required--relying too heavily on a large bankroll can make a person's lifestyle more fragile. That said, I don't think relying on programs designed to help people without resources or 'agency' is a useful strategy either because it simply shifts the reliance from a personal bankroll to the government's. It also changes the nature of the ERE'r from a producer to a consumer, which removes another key component of ERE.

The rules change a little when it's a program forced upon you. IlliniDave mentioned this earlier. ACA and SSI are two programs that a person must participate in, so a strategic approach is sensible and warranted. Jacob asked about whether the $40 would matter if it was a line item on a tax return instead. I would say the distinction is important because I'm forced to pay taxes, so again, if I have to play the game, I'm going to learn how to play it well.

What I personally like most about ERE is how it combines my need to be independent with my desire to limit my use of natural resources as much as possible. I can ignore those accusations of being a drain on society and hold my head high knowing that my lifestyle guarantees that I'm not a burden to my family, community, or environment. If anything, my lifestyle removes waste and excess from the system, leaving more resources available for those who are stuck in it. If you see this as a moral argument, then I'd argue that the moral baseline comes from ERE and not any personal feelings on the subject. Either way, the fundamentals behind ERE are unassailable and easily defended when one stays on the producer side of the equation.


* in general, not directed at anyone in particular

** apologies to jacob for any deficiencies in my definition of ERE

[JL13]

If you spit in the eye of a welfare recipient and still shop at Wal-Mart, you are a hypocrite.

Can you elaborate on this?

Wal-Mart offers the lowest prices compared to most retailers. Wal-Mart pays the lowest wages out of most retailers. Wal-Mart employees receive the highest government benefits compared to most retailers.

Essentially, the government benefits are shared by the three players: the employee who gets some in the form of wages/benefits, the owners get some in the form of additional profits, and the customers get some in the way of lower prices.

If you shop at Wal-Mart, then you are receiving a low price only because of the government benefits paid to it's employees. Without them, wages would (in theory) be higher and prices would move in lock step.

The customer at Wal-Mart is a welfare beneficiary.

[Spartan_Warrior]

"beyond whether you choose to patronize the store"

That actually is the point I was making, more or less. If you have a problem with welfare, you'd best not patronize Walmart and other corporations that abuse the hell out of it. Otherwise, it is hypocritical to complain about individuals taking foodstamps while personally perpetuating the much more massive abuse by corporations.

I also pointed out that the particular focus on welfare for humans/individuals, both within this thread and in the larger discourse of American politics, is rather myopic, and that anyone who is so concerned about it should be as much or more concerned by corporate welfare.

I don't disagree that there is no moral argument that corporate welfare "justifies" individuals taking welfare (but I might disagree that the latter even requires moral justification.)

However, there is perhaps an amoral game-theory argument:

"if I have to play the game, I'm going to learn how to play it well."

If you're paying the taxes that support the program, it seems to me you ARE playing the game... and if you're not, the game is playing you.

The fundamental disconnect might be that I don't see how welfare amounts to anything BUT "line items on a tax return". At which point, not taking the benefits if you meet legal requirements becomes no more or less moral than taking or not taking every tax deduction you feasibly can.

Economic arguments (regarding program sustainability, funding, et cetera) and pragmatic arguments (regarding personal freedom, nuisance of bureacracies, et cetera) should be differentiated from moral arguments.

No question from me, I would not pitch welfare as part of the ERE concept if I were Jacob. I also wouldn't pitch it as teaming up with Wall Street to get out of working for a living so you can pay less in taxes and save the world from climate change... doesn't mean these concepts have no place, just that they are politically touchy. We don't have to call the kettle black as long as it cooks. Discussing how welfare can fit into individual situations does not seem like a black mark on the ERE brand to me. There is also a difference between taking benefits and relying on them. I don't rely on my property tax deduction, but I sure take it.

ETA: Clarifying remarks. I still don't think I'm being very clear, but oh well. TL;DR: I'm not justifying individuals taking welfare because Walmart does so, but I strongly question why the former gets so much more attention and denigration than the latter. I would also assert that anyone who disagrees with welfare would do well to avoid corporations who proliferate it to a far wider extent than any individual could.