Paul Ryan is confusing me

I'm very confused. Paul Ryan has just released an overhaul plan for federal programs that help the poor. Why has he done this? This is the same guy who was the only Republican (almost) to put together a budget, and that budget slashed poverty abatement programs. And now he's for giving the poor a lot more help than his budget envisioned? I'm trying to make sense of this.

• Perhaps Ryan wants to have a better poverty plan than "cut, cut, cut" prior to announcing his intention to run for president. That would make sense. Let's call this Option 1.
• Maybe Ryan always cared about the poor, but he got so wrapped up in being the budget guru that he forgot about it. Let's call this Option 2.
• Maybe Ryan is seeing others in the GOP, such as Mike Lee, taking a lead in poverty issues, and he doesn't want to lose his status as the top idea man. Let's call this Option 3.
• Maybe Ryan is just a juggernaut when it comes to policy. He sees a vacuum, and he's driven to do something about it. Let's call this Option 4.

Does this have anything to do with the midterm elections? Maybe, but I don't see how. A major overhaul of federal poverty programs isn't on the agenda of either party. That is part of what confused me--this doesn't seem to be connected to the upcoming elections.

I hate this sense of not knowing the strategy behind this proposal. Maybe it will become clearer. What's more likely is that the plan will fizzle, sort of like the Ryan budget did.

Oh, I just realized one additional option, which we'll call Option 5. Paul Ryan is incoherent in his thinking and ideas.

Good, Now I'm not confused anymore. I can always fall back on this option. Phew, that's a relief.

Image: huffingtonpost.com

Extras. A post containing an interesting graph showing how benefits phase out as income rises. A post about how we have only 3% chronically poor. Is Ryan's plan a big program for a small number? Some good points there, but I have lingering questions about all the non-chronically poor, such as the poor children, poor elders, and poor disabled that are also mentioned in passing. That sounds like it adds up to loads more than 3%.

Short: Arrested for a parenting decision

At a time when we have stressed parents trying to make ends meet, I don't think we should add to the burden by questioning non-dangerous parenting decisions. Here's a story. A mother had a shift at work, the 9-year-old daughter was bored sitting at the workplace and wanted to stay at the park instead. Mom said yes, and gave her a cellphone. On the third day of this arrangement, a budinsky parent called the cops or child services. Was the child incapable of looking after herself? There's no evidence of that. So why should the kid be whisked into foster care, and the mother arrested and charged?

Yes, there was the potential of danger, but children do transition from needing full-time adult supervision (minus bathroom breaks and sanity breaks) to being responsible for their own safety. Our laws are wrong if they represent the expectation that a 9-year-old needs the same supervision as a 9-month-old or as a 15-year-old. Please, let's not make it harder on our parents and our kids. Give them more leeway than was shown in this incident.

This is most likely the park. Looks nice.

Image: chronicle.augusta.com

Painful realization: Too many immigrants

Here is yet another painful realization. We have too few jobs and too many immigrants taking them. This is painful to say because I love immigrants and identify with them. My immigrant grandfather inspires me, and I'll never be half the man he was. I love the cultural diversity that immigrants bring, especially the differences from American norms. It's good to see how other people do it.

So it is with visceral pain that I acknowledge that the level of immigration, particularly illegal immigration, needs to be curtailed. We need to tighten up the borders, but more than that we need to crack down on businesses that employ illegal immigrants (and legal immigrants with special visas). This is going to be painful, especially to immigrants who have built better lives for themselves. They had very American hopes to work and prosper, and it's going to end for some even though they are good people. Yes, this will hurt good people. Make no mistake about it. However, good people are also being hurt by the lack of jobs, so it's not as though no one benefits.

I won't give a detailed proposal because I don't know the numbers well enough and, heck, any detailed proposal from an amateur wouldn't get a second look. However, I think we should have a certain number of guest workers. We definitely need immigrant workers for agriculture if we want abundance on our grocery shelves. We should also allow some of the 12 million illegal workers in the US stay to prevent a humanitarian disaster that would occur from throwing so many out of work all at once.

Many people don't want to face this. We hope everything will work out OK. Maybe we'll have amnesty for those hard workers who have been in the country for so long, or maybe we'll keep the status quo, which is better for the immigrants than returning to their home countries.

However, some groups support amnesty or the status quo for reasons baser than love for immigrants. Business owners like cheap, reliable labor. Democrats look forward to more Dem-leaning voters. Too bad. What they want isn't for the overall good of the country, so it shouldn't matter.

Image: zimbio.com

Who pays taxes?

Do lower income people pay their fair share of taxes? Look at this graph from the Heritage Foundation, a conservative think tank:

Image: heritage.org

Wow, the lowest 20% of earners pay almost nothing in taxes. The top 20% bear, let's see, 69% of the tax burden. How horribly unfair.

Until you look at this graph:

Image: mayfieldeconclass.blogspot.com

Here we see that the top 20% may pay 69% of taxes, but they also suck up 50% of all the income. The richest fifth get half of the pie. How much of the pie do the lowest fifth get? Just 3%. How much of the tax burden should we expect them to bear?

Before you complain about how little some folks pay into the system, look at how little is paid to them.

The New Year of Inequality

Welcome to another election year. Even though it's only a mid-term election, it's going to be nasty because all elections are nasty now.

The Dems have a major vulnerability in the various troubles of Obamacare, but that's not enough for an entire campaign season. It's too bad for the conservatives who thought they could run non-stop bashing Dems on Obamacare and Benghazi. Those really aren't enough for a campaign when the economy is weak and people need jobs. Somehow, when you or someone in your family needs a job, that trumps political talking points. Maybe because people do have a sense of the real priorities.

The Dems see this, or perhaps they desperately want to talk about something other than Obamacare. They decided that they're going to talk about inequality--the fact that some people are making millions in this economy while you or someone close to you struggle to find a job. The argument has a lot of potential, but also some risks, like "what can you (the Dems) do about it?"

Lies, Damned Lies, and Exaggeration

Before looking at what the Dems actually say on the issue, it's fun to look at how the GOP characterizes what the Dems really want:

• Dems are just stoking envy, that most terrible of sins. 
• This is class warfare, I tell you!
• This is a prelude to confiscating wealth.
• Well, maybe they won't seize wealth, but they'll end personal savings.
• They'll nationalize healthcare, banks, the auto industry, and... No, wait, they already did. 

It never ceases to amaze me how conservatives shoot themselves in the foot with such exaggerations, and then do it again in the next election cycle too.

What do "they" really want?

So what are the Dems actually saying they'll do about inequality? To start, they want to extend unemployment benefits beyond the standard 20-some weeks. They want to maintain social programs like food stamps at the higher levels enacted as part of the stimulus. They want to enact higher minimum wages, both locally and nationally. They want to maintain healthcare for all, so you can still see a doctor even if you can't find a job. Maybe they still want universal pre-K, or perhaps that was just last year's failed social agenda item. I doubt they'll revive the half-trillion-dollar jobs program, which was 2011's failed agenda item.

The Dems aren't saying how they'll fund the programs that aren't already funded--that's a return to type for the Dems. One exception is the new progressive mayor of New York City, Bill de Blasio. He wants to fund pre-K through a minuscule tax on the wealthy of NYC. The wealthy in NYC already pay higher federal taxes, higher state income taxes, and even city income tax. Why worry about taxing them even more? After all, INEQUALITY!!!!!!  (Rhymes with BENGHAZI!!!!!!)

Sorry for all the snark. Briefly, I support an increased minimum wage, healthcare for all rather than a return to the pre-Obamacare mess, but not a national pre-K program or maintaining the bonuses to social programs given out in the stimulus. I think one year of unemployment insurance is the maximum people should receive, not year after year.

From the Party of the 1%

Somehow, a few in the GOP realized that they might have some vulnerability on the inequality issue. It is hard to dismiss it purely as envy when what people want are jobs, not to throw the rich out of their mansions and behead them. Some in the GOP thought that Romney lost the presidential race over his 47% remark--I disagree, but it doesn't help when the billionaire Koch brothers are on one side of the GOP's internal war and the Chamber of Commerce and establishment/CEOs are on the other side. The GOP could stand to appear more compassionate, both for the 2014 election and the next general election (thanks, Atlantic Wire, for pointing this out).

So this was the week that the GOP trotted out their ideas for anti-poverty initiatives. They include no minimum wage increase, a reworked Earned Income Tax Credit (questionable whether it would be better), repeal of Obamacare (because it's part of every GOP domestic proposal), turning anti-poverty programs into block grants, and more school vouchers.

What We Need More Than Anti-Poverty Plans

Neither the Dem nor the Republican proposals sound very effective to me. A wage increase puts a bit more money in workers' pockets, unless it costs you your job, but that doesn't happen often. As for block-granting anti-poverty programs like food stamps, housing subsidies, etc., I don't care strongly. None of these programs seem to help people get out of poverty, they only help them endure it.

What's really needed are a lot of jobs with decent pay, but that is what our economy has been exporting for four decades. The Dems don't have a plan to change it, neither do the Republicans, and neither do I. When wages are so much lower in other countries, no one is going to have a good plan.

I wish we could be Germany or Sweden, having a mixed economy of high-margin, high-quality goods and good-paying jobs. But I don't think we can do that. That niche may not be large enough to accommodate a nation of 300 million. So I wonder whether we're actually on our way to being a middle-income country like Brazil.

Maybe we were always bound in that direction. When factory owners encouraged lots of immigration, they weren't trying to turn them all into middle-class consumers. No, they wanted cheap labor. So we accidentally became a rich country, but we've always had a large pool of cheap labor. If there weren't enough cheap American-born workers, we managed to bring cheap workers in, legally or illegally. So being part of a pool of cheap, excess labor is more our birthright than being a rich country. Ironically, they don't teach you that in school or say it on the campaign trail.

If we really want to be a rich country, we may have to change in fundamental ways, including ending our tradition as a nation of immigrants seeking the American dream. I don't think any of our candidates will get close to that particular discussion. It's probably political suicide to say the American dream is over.

Image: frumforum.com

Why do Democrats love tax increases?

So the Democrats got a substantial tax increase on the wealthy at the beginning of the year. That should be enough for the fiscal health of the country, right?

Not according to most of the Dems out on speaking tours these past few weeks. From Obama on down, they are saying that the federal government needs even more revenue. If that's true, we have to wonder why the Dems didn't get that extra revenue in the fiscal cliff negotiations. Here some speculative ideas about why the Dems want that revenue:

1. The Dems want to set the precedent that all deficit reduction will be a mixture of spending cuts (cuts below the current baseline, which is in an upward trajectory) and revenue increases.
2. Dems want to kill off the GOP preferred method of deficit reduction, which is by spending cuts only, with no revenue increases except from economical growth.
3. Dems want to force the GOP to capitulate to the Dem's preferred deficit cutting approach, and thereby humiliate the GOP.
4. Dems don't want to be humiliated by the GOP if it ends up that government can be cut significantly without huge gaps opening up in the social safety net.
5. Dems are concerned about the growth of income inequality and the reduction in broad, well-paying employment, and they want to even out the inequity using taxation to supporting public provision of standard benefits.
6. Dems are protecting their loyal constituencies of government workers and those who received federal benefits.
7. Dems honestly believe that the cuts will be devastating to government services that we depend on, so the sequester is too deep.
8. Dems always want to raise taxes and spend more on government programs, and they don't even remember why.

Obviously I don't know the talking point reasons the Dems give for needing higher revenue, and I'm getting more and more exasperated as I try to figure out the reason. If you're wondering why I can be so nasty to the Dems just 4 months after supporting Obama's reelection, I'll remind you that the GOP proposals were even more dangerous and ridiculous.

I may be getting the government I voted for, but I never had a chance to vote for the government I really want. (That's true for lots of people--just ask a libertarian.)

Image: democrats.org

Short: A tragedy in NYC

A nanny became deranged and stabbed two children, killing them. On the surface, it is a mystery why she did it. However, the New York Times article captured some fascinating details, especially the contrast in the living conditions of the wealthy family versus that of the nanny.

As a scientist who has also studied a bit of sociology and came away thinking that it was much more than just polemical trash, I appreciate the descriptions of the nanny's living conditions: she earned extra money selling cheap jewelry door to door; she started behaving strangely after her dream of having her own apartment was shattered.

In contrast to her struggle is her employers' wealth, but also their reserve. Only one neighbor in the building was quoted, and she didn't even know the children's names. I'm not trying to hint that there is some sort of cosmic justice in this tragedy, because killing innocent children is not just. But I sense something about the rich and the poor--I'm just not sure what it is.

Image: people.com

Stupid voters

This is a perennial favorite in election years. If we could only eliminate the stupid voters, we'd have much better elections. The latest stupid voter is presented in a video where she declares she'll vote for Obama because he gave her a cell phone.

"Typical Stupid Voter for X"

Some people claim that this woman is a "typical Obama voter" but I doubt that so highly that I'd love to place a large bet on it. I doubt that 50% of Obama voters got free cell phones... or food stamps or housing vouchers. You can't win state-wide or nation-wide elections on a give-away platform in this country. However, a talking point for conservatives is the 47% vs the 53%. If you believe that the 47% automatically vote for Obama, all you have to add is 3.1% of self-supporting stupid liberals, and you (Obama and other liberals) are a winner. If this was true, it should scare the crap out of conservatives because those are hard numbers to defy. However, the GOP doesn't act overly scared about these demographics, so maybe they know that this talking point is an exaggeration.

But I digress. The point I want to make about stupid voters is that they are a strawman argument. It's so easy to find a picture or video of a stupid voter, then blast the strawman emblem you selected. If each side is represented by its dumbest advocate, we'd be hard pressed to choose. But that's not the way it really is. Instead, we decide based on the strongest arguments and the best advocates, not the worst ones.

We are still left with the problem of whether the stupid should be allowed to vote. The answer might be easy if you think the stupid voters are predominately on the other side. (I personally think the stupid are probably evenly divided. If it wasn't true, one party would gain a sustained advantage by not being the "stupid party" but that hasn't happened. Ergo, the stupid are evenly divided.)

 The Miracle of Testing

I look at this issue operationally: how would we check for stupidity and filter out the stupid from those who deserve to vote? We could reinstitute literacy tests and maybe add some math in there too. I don't think I object to that on principle, but I worry that once you institute a test, people start tinkering with it for other purposes, like winnowing out the voting pool. Also, what should the functional level actually be? I can see that basic reading comprehension at third grade level, but not a requirement for a higher level, like 10th grade. But I can see a lot of demagoguing that third grade or sixth grade is too low, and it should be higher. However, once you make it higher, you are definitely going to get bias effects.

These effects occur because the test authors are typically educated white middle class suburban college graduates, and they write questions that they can answer. Plenty of average or near-average inner city voters or rural voters might not pass such a test. Do we really want to disenfranchise those people? (I'm safe because I'm in the white-middle-class-suburban-college-graduate-demographic-who-will-write-the-test-questions, but occasionally I think about other people.)

If there is to be a minimal intelligence required to register to vote, then it better really be minimal, even frighteningly minimal. As I said before, the temptation to raise the standards would be present all the time, and it would be hard to continually resist it. Maybe that's why I think stupid voters should continue to be allowed to vote, because tinkering with this is an invitation onto a sure slippery slope. So let the stupid vote! It's easier than eliminating them and only them.

Image: sodahead.com

Sanctions hurt the poor here

Not in Iran, Iraq, Syria, or Libya...

In Texas. The Texas legislature wanted to put sanctions on Planned Parenthood, so they eliminated funding and took the double hit from the loss of federal grants for family planning too. Clinical sites are closing and fees are being instituted or raised.

Some poor women may shift some of their small but existent disposable cash to pay for contraception. But for others, having to travel further and raise the extra $60  for the 3- or 6-month supply of pills will prove impossible, and nature will take its course. By this time next year, Texas may or may not see the results of this policy in birth rates, maternity hospital fees, child health program sign-ups, and adoptions.

We don't know the outcome yet. But it didn't have to come to this. In the fight over Planned Parenthood, someone could have blinked. Texas could have backed down, or Planned Parenthood could have separated into two organization: one that handles abortions and another that handles everything else.

If PP had done that, it would have been a capitulation to anti-choice forces and an abandonment of part of its mission. Still, I hope they considered it. If both types of services remain available through separate, that's not a huge sacrifice to make. Instead, both Texas and PP decided to sacrifice free or subsidized care for poor women.

Well, it's probably wrong to say Texas or PP sacrificed. The government of Texas (elected officials and public employees) and PP (the governing board and employees), and the strident pro-lifers behind the "kill PP" movement, are most likely still covered for the contraceptives they need and want. The real sacrifice is borne by those poor women who are pushed back into the bygone days of no contraceptives with all those stresses and uncertainties. We, the decision makers, are safe.

How far is the clinic?

Sources: NYT, Reuters, local Amarillo station

Update 3/16/12. Texas is suing the federal government over the loss of federal funding for its programs. Texas paper, Baltimore paper.

Update 4/15/12. More details on Planned Parenthood closings in Texas.

Whipping Boy: The Working Poor

 

This talking point makes me really, really angry. But first, let's correct an error--lots of lower income people pay no income tax, but they do pay: social security tax, medicare tax, sales taxes, property taxes, state income taxes, excise taxes, gasoline taxes, thruway tolls, etc. They haven't been given a get-out-of-taxes-free Monopoly card.

The big complaint stems from two aspects:

1. Some people have such low incomes that their deductions (same as your deductions, not different ones) totally wipe out their income tax liability.
2. Some people have such low incomes from working that they benefit from tax credits that reimburse even more than they paid in from income tax payroll deductions. These credits include the Earned Income Tax Credit, Making Work Pay Credit, and Child Tax Credit. In many cases, these credits pay back even more than the person paid in social security tax and Medicare tax.

I don't think critics dislike the standard deduction and exemption amounts, because they are based on estimated costs of subsistence living in this country. So let's focus on the credits.

• Making Work Pay Credit is small, about $400, and is part of the stimulus to get more money in the pockets of most lower and middle class working people. I like it, but it wasn't meant to be long-term, but I'm not going to defend its continuation.

• The Child Tax Credit is a family-friendly support to low and middle income families that support children under age 13. Kids are expensive, and low income families struggle to support them. These tax credits make it a bit easier to stretch your $380 weekly paycheck to help pay your bills and still have some money left to buy your kids new shoes from a store instead of searching vainly for decent shoes that are the right size and not hideous looking from the Salvation Army thrift store. The Child Tax Credit maxes out at $1000 per child, up to $2000. Families making under, say, $25,000 yearly really need this extra help, but the credit has been extended to families making up to $110,000 a year to sweeten it for the middle class. If the credit should go, take it away from the top first, and maybe keep for the under $50,000 a year people. 

• The largest target for the critics is the Earned Income Tax Credit. Here is potted history per Wikipedia: it started under President Ford. The amount paid out increased under Presidents Reagan, Bush 1, and Clinton. Reagan in particular expanded this credit (actually a subsidy) to make low-wage work pay more than welfare. Not because welfare was so generous, but because many low wage jobs pay so little, but require a family to take on more expenses such as transportation, slightly better clothing, child care, etc. The Earned Income Tax Credit maxes out about $5700, but that is only for families with under $50,000 income. 

Critics who are offended by these subsidies are hard-hearted, and perhaps hypocritical. They bash people on welfare, then bash them again when they work. I guess they have no idea how hard it is to be a low-wage worker. These subsidies, particularly the EITC, may be what keeps people in the workforce, contributing their labor to the economy, instead of on welfare or on the street. I personally know workers who put their refunds aside to pay for auto repairs, just to ensure that they can continue to get to work.

Skin in the Game

The outcry arises because these worker don't have "skin in the game" because they don't pay income tax. The argument is that they don't care about income tax rates because they don't pay. There is some logic in this argument, but it isn't strong. Anyone can be accused of caring only about their own tax rate, and not about any other tax rates. Many times this is true. Lots of people want their own rates low, and everyone else's higher. This isn't a vice you can pin only on low-wage workers, because it applies equally to middle class, upper middle class, well-to-do, and the rich.

I suspect that this is a dog-whistle that goes along with the conservative talking point that the Democrats are trying to increase the number of people dependent on the government. However, low-wage workers aren't getting a free ride. They work AND they pay payroll taxes, which are a huge contributor to the federal budget (40% in 2010).

Make Them Pay

If you want to make life harder for the working poor, by all means, protest the EITC. But maybe it should be the last program you try to eliminate since it gives recipients the most control over how they allocate the money. If you want to reduce government spending, you may want to target direct welfare, medical payments, food stamps, rental subsidies, public schooling, social programs, training,  and higher education first.

If you're angry that some people pay less tax than you do, get over it. EITC recipients will never contribute as much to federal revenue as middle-class workers who pay both payroll and income taxes. They just don't earn nearly as much, so they don't have the money to contribute. But what should they do, just disappear? Work 80 hours a week just so that they can pay more? I think only a selfish lout would demand that.

[Original post accidentally deleted, then reconstituted from salvaged bits. What a pain. An instance where one wrong move creates a ton of new work.] 

Update 10/11/11. Read my thoughts on a fairer tax code.