In 1965, just 22 percent of all federal spending was transfer payments. Today it has doubled to 44 percent. That means that nearly half of all federal spending is simply government taking money from one person and giving it to another.
Or look at it another way: In 1965, transfer payments from the federal government made up less than 10 percent of wages and salaries. As recently as 2000, that percentage was just 21 percent. Today, transfer payments are more than a third of salary and wages. Worse, if one includes salaries from government employment, more than half of Americans receive a substantial portion of their income from the government.
Conservatives often criticize transfer payments to the poor, and for good reason. At the federal and state levels combined, we spend nearly $1 trillion per year on anti‐poverty or means‐tested programs that do more to promote a permanent underclass than to eliminate poverty. But the modern welfare state is much more than programs for the poor. It includes middle‐class welfare, such as Social Security and Medicare, which are the real drivers of our future national insolvency. We think of Medicaid as health care for the poor, but as much as two‐thirds of Medicaid spending goes to pay for long‐term care such as nursing homes for the elderly, much of it for middle‐class people sheltering assets. And the modern welfare state also includes corporate welfare, the military‐industrial complex, and others living off the taxpayer’s dime. The Export‐Import Bank is as much welfare as TANF.
This is the road we are now on. The welfare state started with small programs targeted toward a small number of genuinely needy people. But as politicians figured out the electoral benefits of expanding programs and people realized they could let others work on their behalf, those programs grew until the point at which, today, every problem in society prompts calls for government action, response, or funding.
At the same time, as Governor Christie also noted, this implicitly tells people, “stop dreaming, stop striving.” We demonize those who do succeed, damning them as part of the evil “1 percent.”
This is the real danger of the welfare state. It’s not that it will bankrupt us — though it will. It is that it slowly and insidiously destroys our national character, saps our will to be great, and makes us content with the way things are rather than how they could be. We have seen where this road ends. As Governor Christie warns, it “will not just bankrupt us financially, it will bankrupt us morally.”
Biblical exegesis tells us that the Israelites needed to wander for 40 years in the desert after being released from bondage in Egypt because they couldn’t begin to build a new nation until a new generation grew up that hadn’t been raised in bondage. Those raised in slavery were not trained to think for themselves; they had become dependent on their masters to provide for them. Indeed, when they encountered hardships, many cried for a return to bondage.
Just look to Europe today. The welfare states of Europe are imploding, collapsing under the weight of promises that can no longer be met. Their citizens riot in the streets at the prospect that their government benefits might be reduced.
If anyone wants to know what this next election is really about, Governor Christie just told us.