A Nation of Takers: America's Entitlement Epidemic by Nicholas Eberstadt

Author:Nicholas Eberstadt [Eberstadt, Nicholas]
Language: eng
Format: epub
Tags: Politics
ISBN: 9781599474359
Publisher: Templeton Press
Published: 2012-10-18T22:00:00+00:00

PART II

Dissenting Points of View

Have We Become

a “Nation of Takers”?

William A. Galston

NICHOLAS EBERSTADT assembles a host of empirical trends to prove a moral conclusion: the growth of the entitlement state over the past half-century has undermined the sturdy self-reliance that has long characterized most Americans, replacing it with a culture of dependence that not only distorts our government but also threatens the American experiment. This claim raises two large questions: Do these trends represent a full and fair account of what has taken place since 1960? And do they warrant the conclusion Eberstadt urges on his readers? After some brief reflections on the former question, I devote the bulk of my remarks to the latter.

WHAT HAS HAPPENED

IN THE PAST HALF-CENTURY?

As far as I can tell, Eberstadt’s charts and statistics accurately represent the trends on which he focuses. But they are not the whole truth. In the first place, Eberstadt’s accounting does not include all of the public policies that constitute entitlements as he defines them. Tax expenditures—special deductions and exemptions from, and credits against, otherwise taxable income—now constitute more than $1.1 trillion annually and they disproportionately benefit upper-income families. In an article published in the Weekly Standard, Andrew Hanson, Zackary Hawley, and Ike Brannon give an example:

Someone with a $1 million mortgage who earns over $300,000 a year could see the government essentially giving him a $20,000-a-year subsidy for his home, while a homeowner making $70,000 a year with a $150,000 mortgage would not receive a penny, since his puny deduction (under $2,000) would be less than the standard deduction.

But suppose we consider only the list of entitlement programs on which Eberstadt focuses. Based on his presentation, one might imagine that U.S. households have become far more dependent on public programs in recent decades. This seems not to be the case, however. A Congressional Budget Report (CBO) report released in October 2011 found that government transfers did not grow as a share of household market income between 1979 (a cyclical peak in the economy) and 2007 (another such peak) but rather oscillated between 10 and 12 percent. From the beginning to the end of that period, Social Security was unchanged at 6 percent of market income; health-care programs (primary Medicare, Medicaid, and the Children’s Health Insurance Program) rose from under 2 percent to a bit less than 4 percent while all other transfer programs declined.

There was a change in the distribution of these transfers, however: the share going to the poorest households declined significantly. In 1979, households in the lowest income quintile received fully 54 percent of federal transfer payments, but by 2007 that figure had fallen to only 36 percent—a reduction of one-third. Put another way, during that period, households with low-wage or nonworking adults got less, while households in the middle and upper middle classes got more. If there is a problem of growing dependence, these figures suggest that it is located more in Middle America than in the ranks of the poor and near-poor. This possibility raises

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