The United States is in recovery? Not according to the Washington Times which reported today that Federal welfare spending has increased by 32 percent since President Obama took office. Benefits have soared after many Americans lost their work opportunities and their savings during the recession and now have to depend on public assistance.
According to the Times, the Federal Government spent a whopping $746 billion in 2011. Add to that figure the amount the states spend and it balloons even higher to $1.03 trillion (amounts provided by estimates from the Congressional Research Service and the Senate Budget Committee).
So when either party considers budget cuts serious consideration will have to be given to welfare programs which have topped Social Security and military defense spending.
Many recognize the amount of money that is now given out through welfare as a fundamental shift in support to the under-privileged. Welfare, once seen as a temporary type of support, is for many a permanent support system. Sen. Jeff Sessions, the ranking Republican on the Budget Committee, sees this as a real problem and has argued that the goal of welfare should not be for the Federal Government to see how much they can spend, but to encourage American to find work and become financially independent.
The story is complex and Americans have historically been known to be a generous group. But when welfare, which totaled $563 billion in fiscal year 2008, has grown 32 percent to reach $746 billion in fiscal year 2011, it is clear that this trend is unsustainable. As we take more and more taxes from the rich and middle class and shift it to the lower class, the middle class will eventually become the lower class.
What’s the biggest challenge facing Americans? Many would argue that it is providing affordable healthcare to its citizens. We see that here too. Medicaid, the federal-state health care program for the poor, has also seen significant increases. In fact, spending for Medicaid is up $82 billion from 2008. $296 billion in federal spending is currently spent on Medicaid, which now makes up 40 percent of all low-income assistance in 2011.
The second biggest increase is the food stamp program which has almost doubled since 2008 and makes up for about 20 percent of the total amount that has been spent on welfare programs since 2008.
What’s the solution? Many would argue that the real solution involves creating new job opportunities and creating real incentives for welfare recipients to go to work. If current Federal welfare programs create disincentives for those who want to enter the workforce and those who work will lose more money by working a job than through a government handout, this is clearly a strong disincentive to work.
And unfortunately, according to the experts, “less work and lower earnings can translate into greater dependency on the government — and zero or even downward social and economic mobility for those mired in poverty.”
If you are facing a financial crisis there you may have several options to alleviate your financial crisis. Talk to a bankruptcy lawyer for more information.
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