16 February 2012

But Wait, There’s More

My earlier post on expanding safety net recipients has an addendum:

While the findings are not directly comparable because of differences in methodology, the new study suggests that the recent recession did not cause any significant increase in the share of benefits flowing to the poor, as might once have been expected.
The study found that older people received slightly more than half of government benefits, while the nonelderly with disabilities received an additional 20 percent. These benefits are not means-tested - indeed, better-paid workers get more in Social Security.

My general point from before still stands, as removing illegal immigrants, reducing immigration, and cutting down the guest worker program will cut the labor supply, making American workers more desirable to employers, and thus reducing unemployment, which in turn reduces safety net spending.

What’s more depressing is that a good portion of safety net spending has increased because the Boomers have finally decided to claim their government benefits.  The only way to reduce this spending is to cut the benefits (which hilariously is more likely under Obama than Romney, at least if Romney is to be believed) or kill the recipients.  On the hand, we’ll reduce government entitlements; on the other hand, the Boomers will be dead.  Frankly, this is not a bad choice to have.

One thing’s for sure:  with the increase in federal safety spending being due to changing demographics, this trend is unsustainable.  The end of this trend will not be pleasant.

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