Do the Math: People Don’t Choose to Be Poor or Unemployed

Long-Term Unemployment HistoryGod, I wish I were poor.

And unemployed. That’s the good life. Poor and unemployed.

I mean, just look at all the cool stuff you get. Medicaid and welfare. Food stamps and unemployment insurance. And don’t forget public housing.

This stuff is so awesome that it’s like a “hammock that lulls able-bodied people to lives of dependency and complacency, that drains them of their will and their incentive to make the most of their lives.” That’s what Paul Ryan says, at least, and as the Chairman of the House Budget Committee, he’s supposed to know these things, right?

According to Ryan and his fellow Republicans, if I have unemployment insurance, I’ll never want to work again. Senator Rand Paul says it will cause me “to become part of this perpetual unemployed group.” With an average benefit of $269 per week, I’ll be living on Easy Street.

This is a common belief. There’s an email making the rounds from a 54-year-old consulting engineer who makes $60,000 a year and has to pay $482 a month for health insurance under Obamacare, but that’s not his biggest complaint. He’s really upset that his 61-year-old girlfriend who makes $18,000 a year only has to pay $1 a month for health insurance.

He thinks she has it so easy that she can afford to pay more, but he’s wrong.

On average, Americans earning $18,000 a year pay more than $3,000 in taxes, so she really only has $15,000 leftover to pay her expenses. She lives in Monterey, CA, where the average rent and utilities add up to $15,000 a year. So, after paying taxes, rent, and utilities, she’s completely broke. She doesn’t have money for food, let alone health insurance.

The consulting engineer thinks people will choose her lifestyle over his. “Heck, why study engineering when I can be a schlub for $20K per year?” he asks. (Nice way to talk about your girlfriend, by the way.) To which I’d like to reply: If being a “schlub” is so attractive, why don’t you do it? Why don’t you quit your engineering job and join the “$20K per year” club?

For that matter, why don’t we all quit our jobs right now and start collecting unemployment insurance? How far do you honestly think we can stretch $269 a week?

I’ll tell you how far: It would cover less than half of the basic necessities for the average American family.

That’s why unemployment makes you more likely to have to borrow money from a friend, withdraw money from your retirement savings, and have trouble paying your medical bills, rent, and mortgage. It makes you more likely to have a stroke or heart attack, lose self-respect, have difficulty sleeping, and seek professional help for anxiety and depression. It makes you more likely to kill yourself, kill others, and drink yourself to death.

And if you’ve been unemployed for more than a few months, most employers won’t even look at your résumé. It doesn’t matter how qualified you are. It’s like you don’t exist anymore.

The last time it was this bad, with long-term unemployment close to 3 percent of the workforce, was the peak of the 1980-81 recession. Back then, the federal government kept extended unemployment insurance in place for almost two more years, until the long-term unemployment rate fell close to 1 percent. In fact, that’s been standard operating procedure for every recession in the modern era, including 1990-91 and 2001. But now, with long-term unemployment as high as it’s been since World War II, Republicans have killed the emergency unemployment insurance program, and they’re fighting Democrats’ efforts to restore it.

They don’t seem to care that there are 2.9 applicants for every job opening. They don’t seem to care that people on unemployment insurance actually spend more time searching for work than their fellow unemployed who are ineligible for benefits. They’re sticking to their story.

On the 50th anniversary of the War on Poverty, many Americans are still operating under the assumption that people choose to be poor and unemployed, that they’d rather be lazy than rich, that they can afford the basic necessities of life. But the numbers tell a different story.

I don’t wish I were poor. Or unemployed. And I sure don’t wish it on anyone else. If you did the math, neither would you.

==========

This op-ed was recently published in the South Florida Sun-Sentinel and the Huffington Post.

Obamacare Is Not a Reason to Give Up on Government Programs

Health Insurance Enrollment Under Obamacare

The biggest myth of the Obamacare debate goes like this: The failures of Obamacare prove that the government can’t be trusted to run our health care system.

This single myth is so powerful that it has become the rallying cry of every Republican who’s considering a run for the presidency in 2016. It has single-handedly brought the Tea Party back to the forefront of American politics. It has been uttered on every cable news channel everyday since HealthCare.gov launched on October 1.

And it is wrong on every possible level.

First of all, the premise is wrong. Obamacare cannot be a litmus test for government-run health care because Obamacare is not government-run health care.

Obamacare creates an online exchange where people can buy private insurance. The government merely sets basic standards that every plan has to meet and gives consumers a place where they can locate those plans. The rest is up to the free market.

This simple concept has been so twisted and misunderstood that many Americans actually believe that the government will have access to their medical records. This is completely false. Under Obamacare, the IRS only needs to verify that you have health insurance. It does not — and cannot — see any of your private health information.

The second problem with this myth is that it’s too soon to judge Obamacare. All new software goes through a trial period. It’s frustrating, but it’s inevitable — and temporary.

Back in 2005, the same thing happened when the Bush administration launched the website for Medicare Part D. First, they had to delay the launch. Then, when they finally rolled it out, it didn’t work at all. Then they got it working, but it was too slow and full of inaccuracies.

Every major news outlet carried stories about the failures of Medicare Part D. According to polling data, the program was actually less popular than Obamacare is today.

Within a few months, the glitches were fixed. Medicare Part D now has a 90 percent approval rating. No one remembers the initial bugs in the system.

The third problem is that many of the so-called “failures” of Obamacare aren’t actually Obamacare’s fault. Remember that Obamacare wasn’t supposed to create one big national insurance exchange. Each state was supposed to create its own insurance exchange, but the Republican governors in half of the states refused to follow the law.

As I wrote back in May, “These Republican governors, who say the states are better at governing than the feds, ceded enormous power to the federal government, violating a core principle of their party’s ideology. And then they crowed that Obamacare was a failure because it required a massive federal bureaucracy — the very bureaucracy that they chose to create!”

What’s worse, these governors didn’t announce their decisions until 2013, so it’s completely false to assert that the federal government had three years to build a national online exchange. They really only had a matter of months.

The fourth problem with this myth is that Obamacare is not a failure. This week, the government announced that more than 500,000 Americans signed up for health insurance through Obamacare in its first month of operation.

Think about that. Obamacare, with all its kinks and snafus, has already improved the lives of over half a million people.

You’ve probably heard that 106,185 people have signed up for health insurance through the new online exchange, but even more impressive is the 396,261 people who got their insurance through Medicaid or CHIP.

In all the hubbub about HealthCare.gov, we seem to have forgotten the Medicaid expansion under Obamacare, and the media hasn’t bothered to remind us because…well, it’s going so smoothly.

And that brings us to the fifth and most fatal flaw in this myth: The biggest success story from Obamacare has been Medicaid, the one part of the law that actually is government-run insurance. To say that the government can’t be trusted is to say that the millions of Americans who benefit from Medicare and Medicaid and CHIP don’t count and don’t matter.

That’s an ugly thing to say, but if you listen closely, you can hear it all around you. Every time the government tries to help the less fortunate, there is always a contingent of Americans who oppose it. But that doesn’t mean we shouldn’t help them. And it certainly doesn’t mean we can’t.

==========

An abbreviated version of this op-ed was published in today’s South Florida Sun-Sentinel and Huffington Post.

Great Nations Pay Their Bills

Great nations pay their bills.

That, I believe, is what this debate boils down to. That is what our founding fathers would tell us if they saw us toying so dangerously with the federal budget and the debt ceiling.

The national debt has always been controversial. The current government shutdown is only the latest episode in a long history of divisive debates over paying the nation’s bills.

Consider, for example, what John Adams’s wife Abigail wrote to her daughter Mary in 1792: “I firmly believe, if I live ten years longer, I shall see a division of the Southern and Northern states, unless more candor and less intrigue, of which I have no hopes, should prevail.”

She wasn’t talking about slavery. She was talking about government debt. And she wasn’t alone.

“With the South filled with debtors and the North creditors,” says the historian Ron Chernow, Thomas “Jefferson feared the country would break apart along sectional lines.”

You have to admit, that really puts things in perspective. Today’s debate may be polarized, but no one seriously expects half the nation to secede because of it. And yet, in the early days of the American experiment, that’s how controversial the national debt was.

After the American Revolution, the new government had a lot of bills to pay. Fighting the mighty British Empire wasn’t cheap. The federal government had racked up $54 million in unpaid bills, and the states owed another $25 million.

There were many in Congress who believed that the government should default on its debt rather than pay the bills. They knew that they’d have to raise taxes to pay the bills, and they believed that taxing and spending were the first steps toward monarchy.

Sounds familiar, no?

George Washington disagreed. During the war, Washington had marveled at the British army’s seemingly inexhaustible supply of money. A great military, he believed, depended on the government’s ability to spend as much as necessary, and that required tax revenue and solid credit — two things that were sorely lacking on the American side.

By the end of the war, investors were fed up with the Americans. The new state governments had refused to collect enough taxes to pay the interest on the debt they had accumulated. The financier Robert Morris warned Washington that investors “who trusted us in the hour of distress are defrauded.” It’s “madness,” he lectured, to “expect that foreigners will trust a government which has no credit with its own citizens.” He begged the federal government to begin collecting taxes to repay their loans.

“With respect to the payment of British debts,” Washington concluded, “I would fain hope…that the good sense of this country will never suffer a violation of a public treaty, nor pass acts of injustice to individuals. Honesty in states, as well as in individuals, will ever be found the soundest policy.”

In other words, when a gentleman gives his word, he honors it. Great nations pay their bills. He did not, however, have an easy time convincing Congress of that.

In his first State of the Union, Washington declared that “an adequate provision for the support of the public Credit is a matter of high importance to the national honor and prosperity.” A few days later, his Treasury Secretary Alexander Hamilton proposed to Congress that the federal government not only raise enough taxes to pay off its debt but also to pay off all the states’ debts as well. Even more controversial, he suggested that they pay the entire face value of the debts, not the low prices that they were currently selling for in the market.

James Madison rose in the House of Representatives to denounce Hamilton’s proposal. It would reward speculators who had purchased the government bonds from hapless war veterans, he argued, and create a dangerously large Treasury bureaucracy.

In the end, Hamilton won, but not before creating many enemies. The investors who stood to gain from his policy lived mostly in the industrial North, while the indebted landowners of the South were suspicious of bankers and their “paper assets.” The debate over Hamilton’s proposal was the beginning of a rift that eventually led to our modern political parties.

Not long after Congress approved Hamilton’s plan, government bonds tripled in value. “The progress of public credit is witnessed by a considerable rise of American stock abroad as well as at home,” boasted Washington.

Still, radical dissenters tried to thwart this goal. In western Pennsylvania, a group of outraged farmers rebelled violently against the new tax the government had placed on whiskey, a product created from their grain. But Washington wouldn’t stand for it. If “a minority…is to dictate to a majority,” he warned, “there is an end put at one stroke to republican government.”

Apropos wisdom for today, wouldn’t you say?

Eventually, the Whiskey Rebellion was quelled, and all the debts were paid off — state and federal — at face value. The American government went on to become the most trusted investment in the world. To this day, it is widely considered the crowning achievement of Hamilton’s career — and one of the most important acts of this new nation.

Our credit is our reputation. It is our word. It is, quite literally, our bond with the investors of the world. To abuse it is not only to invite economic disaster; it is, more importantly, to sever the promise our forefathers made to us and the promise we make to the world. When other nations are in distress, they turn to us. We are the beacon in a sea of uncertainty. We are the deep pockets when all others have gone empty.

We are a great nation. Let’s start acting like it.

==========

This op-ed was published in today’s Huffington Post. An abbreviated version was published in the South Florida Sun-Sentinel.

The Federal Government Didn’t Lose the War on Poverty. It Retreated.

U.S. Poverty Rate, 1959 to 2009

In 1904, half the population of New York City lived below the poverty line.

Half. Can you imagine? The poor were so numerous that they nearly outnumbered everyone else.

Today, less than 20 percent of New Yorkers live in poverty. That’s still a serious problem, but it’s a far cry from 50 percent.

Clearly, we did something right.

But in today’s political arena, we don’t talk about what we did right. We talk about what we’re doing wrong. We spend so much time talking about our problems and failures that we seem to have forgotten our nation’s great victories.

This historical amnesia is a dangerous mistake. It poisons our hearts with pessimism. It blinds us to the lessons and solutions we need. Most New Yorkers have no idea how prevalent poverty used to be — or how their predecessors made it go away.

And they’re not the only ones. “We have spent $15 trillion from the federal government fighting poverty,” said Rep. Paul Ryan on Fox News last month, “and look at where we are, the highest poverty rates in a generation, 15 percent of Americans live in poverty.”

Ryan is speaking on behalf of millions of Americans who believe that the War on Poverty was a failure, when in fact it’s one of the greatest success stories in our nation’s history.

If Ryan thinks 15 percent is high, he should go back a hundred years when the poverty rate was three times that. Back then, the government didn’t officially measure poverty, but historians have reconstructed close approximations based on the cost of living and the distribution of household income in those days. Thanks to their calculations, we now know that 44 to 45 percent of Americans lived in poverty in the early 1910s.

A generation later, after the Great Depression and World War II, the poverty rate had fallen to 22 percent.

Can you imagine? They cut the poverty rate in half — from 44 percent to 22 percent — in only a couple decades.

As far as wars go, that’s an astonishing victory. It should be celebrated alongside Gettysburg and Normandy. It should be commemorated and committed to our children’s memories. It should be studied by our civilian leaders in the same way that battlefield strategy is studied by our military leaders.

On this particular battlefield, the strategy that paid off was the New Deal, President Franklin D. Roosevelt’s ambitious series of programs that created jobs for the unemployed, Social Security for the elderly, regulation for the bankers, a minimum wage for the workers, and legal protections for the labor unions.

But the war was not over. One in five Americans still lived below the poverty line. And so, on January 8, 1964, President Lyndon B. Johnson stood before Congress and made it official: “This administration today, here and now, declares unconditional war on poverty.”

Congress proceeded to embark on the Great Society, patching the holes left in Roosevelt’s New Deal. They expanded health insurance with Medicare for the elderly and Medicaid for the poor. They increased Social Security benefits and education funding for poor school districts. They established civil rights and a permanent food stamp program. They invested in urban redevelopment, rural development, and public transportation.

A decade later, the poverty rate bottomed out at 11 percent.

For the second time in half a century, the United States had cut the poverty rate in half — from 22 percent to 11 percent. And just as before, this extraordinary victory faded from our memories, and the policies that spawned it faded from our favor. We allowed labor laws to go unenforced, public investment to decline, and the minimum wage to stagnate even as the cost of living soared. We deregulated banking, and we stopped trying to get enough jobs for the unemployed or enough education funding for poor school districts.

So it’s no surprise that the poverty rate rose to 15 percent during the Great Recession. A century of progress has been forgotten.

Eliminating that final 15 percent is one of the great tasks before us in the 21st century. As we craft new solutions, let us not forget to preserve the old ones — and to honor the memory of those who worked so hard to give us so much.

==========

This op-ed was published in Friday’s South Florida Sun-Sentinel.

The Republican Riddle: What the States Know That the Feds Don’t

Screen Shot 2013-10-07 at 3.00.13 PM

I’m going to tell you a riddle. It’s a paradox of sorts, and it’s confounding some of the brightest political minds of our time. Here it is…

The Republican Party has lost the last two presidential elections. In the House of Representatives, they lost the majority of the nation’s votes. In the Senate, they’re outnumbered 55 to 45.

The future looks even dimmer. The youngest generation is more liberal than its immediate predecessors, and they’ve been turning out in record numbers. The electorate is becoming more educated and more diverse — two liberal trends that don’t show signs of stopping anytime soon.

And yet, at the state level, the story is completely reversed. Republican governors outnumber Democrats 30 to 20, and they control a majority of state legislatures.

How can that be? What are Republican politicians doing right at the state level that they aren’t doing at the federal level?

I’ll give you a hint: They aren’t who they say they are.

The answer to this riddle is the greatest act of hypocrisy in modern politics. It’s a magic act, really. An illusion. Don’t be fooled by appearances. Look at what they do, not what they say.

Republican politicians say they want smaller government. They say the states are better at governing than the feds. They say we can afford tax cuts. They say we need tax cuts.

But their actions tell a different story.

Take Obamacare for example. The Affordable Care Act instructed the states to set up exchanges where people could purchase affordable health insurance that they weren’t getting from their employers. Twenty-six governors declined, choosing to let the federal government do it for them. Of these twenty-six, twenty-four were Republican.

These Republican governors, who say the states are better at governing than the feds, ceded enormous power to the federal government, violating a core principle of their party’s ideology. And then they crowed that Obamacare was a failure because it required a massive federal bureaucracy — the very bureaucracy that they chose to create!

The dirty little secret of Republican politicians at the state level is that they love the federal government. They need it. They depend on it.

In fact, Republican states receive far more federal spending, relative to the taxes they pay, than Democratic states. For every dollar they put in, Republican states get $1.46 back. Democratic states get $1.16. Of the 22 states that voted for John McCain in 2008, 86 percent received more federal funding than they paid in taxes, compared to only 55 percent of the states that voted for Barack Obama.

Then the Republican politicians have the temerity to brag that their states have lower taxes. Well, of course they can afford lower taxes: The feds are picking up the tab!

What they don’t tell you is that they’re spending just as much money. They’re just being subsidized by the Democratic states!

It’s no surprise, then, that Republican state governments are more popular than Democratic ones. They have lower taxes and more federal funding — both of which are very popular.

Thus the riddle is solved: At the state level, Republicans are cynically and diabolically riding to victory on the wings of a big federal government while claiming to be doing the exact opposite.

At the national level, meanwhile, they’re just starting to learn how to play this game. In Washington, Republicans really have been trying to shrink the federal government, so much so that they threatened to default on the nation’s debt and blow up the global economy if the President didn’t agree to cut spending on everything, including retirement programs.

It wasn’t until they realized that the spending cuts were extremely unpopular — because, you see, the public actually needs the services that the government provides — that they backtracked and claimed that they never supported them in the first place. And when the President finally proposed cuts to retirement programs, they attacked him for even considering such an idea…even though they basically forced him to do it.

But the award for worst hypocrisy surely belongs to Oklahoma Senators Jim Inhofe and Tom Coburn, who went all-out to prevent sending federal aid to Hurricane Sandy victims and then demanded that the federal government send aid to their home state in the wake of the recent tornado disaster.

Maybe they’re finally starting to figure out what state-level Republicans have already discovered: The government is an essential part of our social fabric. It does important things, and someone has to pay for those important things. You can’t cut spending without hurting people, and you can’t cut taxes without cutting spending or blowing up the deficit.

There’s no such thing as real magic. Anyone who says differently is trying to trick you.

==========

An abbreviated version of this op-ed was published in today’s South Florida Sun-Sentinel.