Tuesday, August 2, 2011

Conversations With Republicans: Spending and Welfare

Today at the car dealership, while awaiting the repairs from the annual dreaded task -- the state inspection -- I ran across a couple of local Republicans waiting for some work of their own to be completed. On the television was the discussion of the debt ceiling, as the bill had just cleared the Senate and was awaiting Obama's signature. They were having a lively chat about how important it was that we cut spending, and I decided to chime in.

First fact, and it's one that the media is finally picking up after the bill was passed -- deficit reduction during recessions harms economic growth. In the 1930s, FDR faced a similar situation. The country had spent significant amounts of money through the New Deal, including work programs such as the Works Progress Administration. He was pushed by conservative Democrats, Republicans, and a few trusted advisers that spending had to be reduced, and he did so. The economy collapsed, and the word "recession" was invented so as to not create panic over us re-entering the Great Depression. The cuts were reversed in 1938 through emergency spending, and the economy rebounded.

After hearing this information, they were a little hesitant to be supportive of this debt deal, but still felt we should cut spending. I asked them where they'd seek to cut, and one of them said that we shouldn't touch Social Security or Medicare, and we shouldn't touch military spending. I asked if he felt we should remain in Iraq and Afghanistan, and he stated that he didn't, he just felt that the troops are in harm's way and should be cared for. I suggested we bring them home, give them their GI Bills, and let them begin civilian careers -- and he thought this was a good idea.

They both shifted gears to welfare fraud -- too many people collect checks that shouldn't. They felt people use their TANF check to buy drugs, or they have more kids just to collect more benefits, or other kinds of fraud. They suggested drug testing for welfare recipients, and launching a deep investigation to find fraudulent welfare cases.

As I pay a bit of attention to such things, being a social work major, I informed them that fraud is about 2/10 of 1% of all cases in the state -- and it would cost more money to find the fraud than it would to allow it to continue. I asked if their concern was the morals or the money, and they said it was the money -- so by the end, they'd disposed of the fraud investigation. Still, drug testing was relevant.

I asked them why this was. I can't disagree with them being angry that people on welfare use state money to abuse drugs. If I knew someone doing this, I'd probably be angry with them, too. Still, I know the reality of drug addiction. Again, I asked them -- is this about money, or morals? This time, it was about the morals, they felt stolen from. Okay, hard to argue this, and I really wouldn't try.

But I did ask them, did they know that TANF checks go to parents with children? They did know this, and felt that women got pregnant so they could get more money. I asked them if they felt that they knew any woman who would go through nine months of pregnancy for an extra $1,500 or so a year -- and their eyes popped when they realized how little extra the woman would get. This argument, too, went by the wayside.

Then, back to substance abuse -- do they want the children starving? Well, of course they don't, they said. Do you want the children going into an already struggling foster care system, when that would cost the state money, and we know outcomes are better for children to remain with parents, even if they are dysfunctional? (Note: This is why DHHS works for 18 months to reunify children with parents.)

And so I suggested, maybe we should tie a positive drug test to required substance abuse treatment to keep the TANF flowing. I can't disagree with this as a "moderate" solution, we can combat a social problem and keep people fed at the same time. So, okay, we'll do drug tests and add a sensible condition to welfare. Fine by me. This is called being responsible with our money.

What I took away from this conversation overall was that these older, middle-class Republicans weren't so much concerned about spending as they were about spending badly. They were fine with the welfare checks, so long as most of them were being spent by people who needed the help and people weren't just using them to buy drugs. Helping the disadvantaged is a liberal message. Not spending taxpayer money on people who abuse that help is a conservative one. We can do both.

More on this conversation later this week.


Anonymous said...

Thanks for taking the time to educate. This is really the foundation for our social ills. Education will help to make a better society for those coming up through the system. Well informed or educated people are more likely to take the time to listen. Much of our media is filled with talking points but leaning to hard on way or the other. Moderation is the key to good policy.

Bruce Bourgoine said...

This is a really good post, engaging conversations with self-styled "conservatives" often causes some reflection that can be eye openers.

Bruce Bourgoine said...

We actually successfully spent our way out of the Great Depression. The first thing to note is that during the New Deal unemployment was greatly reduced because New Deal programs hired approximately 60% of the unemployed. Doing so initiated a significant jobs turn around.

World War Two followed and built on that base and also transferred many of those jobs to the private economy. I don't recommend war as our pathway out of the Great Recession but the critical point is that it was the extra heavy government spending that was what turned things around and we could do it today if we had the guts.

According to Nobel Prize winning economist Paul Krugman:

“From an economic point of view World War II was, above all, a burst of deficit-financed government spending, on a scale that would never have been approved otherwise. Over the course of the war the federal government borrowed an amount equal to roughly twice the value of G.D.P. in 1940 — the equivalent of roughly $30 trillion today.”

Intervention via heavy stimulus worked then and can now. In fact in the late 30's as you noted, a turn toward austerity measures of the type that today's GOP is pushing for was underway and started to result in a stall of job and economic turnaround.

I personally do not favor rebuilding a consumption growth economy narrowly serving wealth (the unfortunate path we are now trying to tread) but a sustainable broad life-enrichment economy. I favor job creative interventions that spark sustainable small enterprise as a foundation core along with addressing our very badly aged infrastructure. The World War II example is primarily to what degree stimulus can be used (we don't need $30 trillion but do need to think big) and is recognition that it can be economically of tremendous service in the long run - it built the middle class of the 40's, 50's, 60's, and 70's that Reagan began to dismantle in the 80's.