10 August 2009

(Un)Welfare (Non)State

Slideshow over at CNBC.com that shows the 15 Biggest Welfare States of the U.S. of part of A. I'll save you the prolonged suspense: California is Number One with a whopping 3.3% of its population on public assistance.

Wow, 3.3% of the population. Around here We call that the country club set.

By best estimates (in other words, a merging of several economic studies based on inadequate statistics distorted through politcal lenses), some 31% of Puerto Ricans depend entirely on public assistance. Now 31% may be a bit high by some estimates, but by many others, it is quite low. And for the purposes of this blog, it proves a point: We are the perfection of the do-nothing welfare state.

An observation: Puerto Rico's population is at about 3.95 million, so 31% of that is (don't worry, I'll do it) 1,224,500 welfare recipients. As of July 2008, California had 1,212,893.


Now I'll define a welfare state as one where the government provides unencumbered financial support to its citizens to compensate for sub-standard income. Under that (admittedly) broad definition, it doesn't matter if the person receiving monies is homeless, unemployed, disabled or pregnant: what matters is that they receive government money that they don't have to earn or pay back. And Puerto Rico is the perfection of the "free government money disaster."

How else could We end up with more welfare recipients than a state with 36.8 million residents, some 9 times larger than Us? Sure, it has one of the top 10 economies in the world, but are We so incompetent, so blind, so lacking in the determination to engage in true progress that We will suck this badly?

Oh yeah.

"Puerto Rico's drastic economic decline can be blamed on many factors, but the most prominent link is the unintended consequences of an expanding government role in the provision of welfare services. Economic indicators show that the Commonwealth's economic collapse coincides with a sharp rise in the amount of federal transfer payments being made to citizens. Transfer payments going to individuals have increased exponentially, from a meager $69 million in 1968 to over $8 billion in 2002. Disability, unemployment, and welfare payments received by citizens now account for one-fifth of the island's personal income. This massive social spending, which began in the 1970s and continues today, has resulted in severe domestic disinvestment in the economy. Domestic capital investment has declined from 32 percent of GDP in 1970 to 16 percent in 2000. This means that the Puerto Rican government, rather than supporting the creation of jobs and market incentives, relies primarily on tax-induced revenue and foreign investment for any growth in the island's GDP. 

In changing the focus of the island's economic activity from production to distribution, the Puerto Rican bureaucracy has crowded out community solutions and business incentives. The results of these policies have created labor distortions, private disinvestment, and have left a large segment of the population without the skills or ambition necessary to achieve economic mobility. As Puerto Rico has shown, when public solutions replace market forces, the loss of privately-produced goods and services can lead to economic stagnation and decline."

That quote is from a 2006 Bobbi Whitlock piece in the Independence Institute, warning Colorado about expanding welfare. The economic miracle of Puerto Rico, the London School of Economics showcase that the future Asian Tigers studied closely, is now the Island of Idleness Rewarded, the Land of Lollygagging Lardasses brought to you by Acephalic Administrations in 1972, 1976, 1980, 1984, 1988, 1992, 1996, 2000, 2004 and 2008.  

Attract foreign investment? No, Let's beg Uncle Sam for some extra money!

Business incentives? No, Let's make more laws that will create more fees and taxes!

Economic development? No, Let's hire family, friends, donors, freeloaders and sex partners for the government payroll and call that job growth!

What's left of Our economic miracle is what's left after any miracle: the dust of what once was. The nations that once studied Us have left Us, literally, in the dust. And it's Our fault.

We are not a welfare state, simply because We are not a state and true welfare would be a step up from the destitution and ruin We have made of Our economy. Change is possible, it always is, but to make it happen, We may have to get rid of the 31%, or 40% or 50% or even 70% who'd rather do nothing in exchange for nothing more than a beggar's handout.

Maybe California will take them.

The Jenius Has Spoken.

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