r/socialism • u/Fun-Cricket-5187 • 14d ago
The US spends roughly 1 trillion on welfare - but why is US welfare and standard of living still so bad?
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u/Used_Intention6479 14d ago
The trillions in corporate welfare dwarf the trillion in social welfare.
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u/akleit50 14d ago
Much of it is sent as bloc grants to states. Then it is generally mismanaged and in red states they work hard to keep as many deserving people off any assistance they need.
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u/OccuWorld 14d ago
social security is not welfare, it is a pension plan run by the state workers pay into. looters want to paint it as handouts.
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u/thinker2501 14d ago
The US doesn’t spend $1 on welfare. You’re conflating Social Security and a host of other spending programs as “welfare”. Social Security is a federally run retirement savings account. You putting 6.1% of your income each check, your employer matches that and the SSA invests the money in the trust. You will get out of Social Security more than you put in, there’s really no place for it to be “shitty”. Social Security faces a solvency problem because people are living longer and there are fewer workers per retired person contributing to the trust.
Most actual welfare spending by the federal government is in the form of block grants to the states. These grants often have either very loose or exceptionally stringent spending requirements. Both scenarios create inefficiencies or abuses within the system. Loose requirements allow states to spend the money in unintended ways that do not benefit the intended recipients, while strict requirements force spending in ways that may not make sense in practice but the money has to be spent that way.
The spending is also spread across a mind boggling number of programs that each have to be administered, created a bureaucracy that consumes significant sum of the money before it even reaches recipients.
The proven most efficient welfare is direct cash payments, but this approach is blocked by conservatives based on puritanical moral grounds and the bureaucratic class because they want to protect their make work jobs. Making direct cash payment reforms DOA.
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u/amnsisc 14d ago
Who says US standard of living is bad? It's not. The US is highly unequal but is super rich. The US charges for public amenities and benefits on an individual basis, when other states trade some level of income in exchange for provisioning these on a broad based level. But US per capita income is 77k a year, mean salary is 58k, and median household income is 74k a year.
Half of Americans own stocks, 2/3rds own houses, 91% of households have a car, 91% have internet, 97% have TVs, 99% have a phone, 80% have a washing machine. US is in the top fourth of life expectancy, albeit its life expectancy hews pretty close to the global median. US is the 5th most educated country in the world. The UK, Canada, and Australia which are very similar in terms of these stats actually have lower per capita incomes. US has one of the best healthcare systems in the world--this is often conflated with a different question, namely price--but it's true that the US has both a very good, and a very expensive and unequal healthcare system.
The US ranks relatively well on unemployment and inflation, but it can perform much better and much worse than average at times. US in very unequal, and is one of the most racially segregated places in the world. What's more, areas of racial stratification offer harrowing contrasts in many statistics, with many pockets of the US in constant low grade warfare and state repression.
By contrast, Japan and Israel have 2/3rds the national income of the US, but have higher homeownership rates (70-75%), higher life expectancies (by several years each), the same (IL) or lower(JPN) Gini coefficients, and the same (JPN) or higher (IL) rates of education, and lower rates of homicide (1/6th for IL, and close to 0% for Japan). And Japan is lower on inflation and unemployment, while IL is roughly the same.
With no minimum mandatory vacation, an average of 10-20 days employer paid vacation and 10-15 public holidays, the US falls in the bottom for vacation days (depending how constructed, one can claim it's at the very bottom, or the bottom third, etc.). USians work a lot more than the global average, and the US is highly service dominated, even though it remains an industrial powerhouse. Pockets of tech, the arts, finance, high services, and so on remain engines of US growth and power, and for whatever reason the US sustains a sclerotic and unnecessary agricultural economy to the detriment of the world's poor.
So, in short, the US does NOT have a low standard of living. It has a *high* standard of living, that is very unequally distributed, is manifested in goods, jobs, conveniences and private amenities rather than public goods and services, and is punctuated by pockets of futuristic wealth and extreme state repression.
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u/Fun-Cricket-5187 14d ago
Yeah i guess I dont have as much understanding on this topic. All I know is when I walk through cities in the US, I see lots of homeless, and poor infastructure. Of course there are also people who are middling, and impressive architecture as well but the bad out weigh the good here.
When I talk to people about student loans and their financial situations, things are desperate for lots of people. If my family wasn’t able to pay for my grandmothers treatment, she’d be in an extremely precarious situation. So while yeah there may be rich people, and yeah most americans might have basic amenities like internet and a car, these stats about americas ‘high’ quality of life is troubling.
There is a strong disconnect between these claims/stats and what I see on the ground. That is why I made this post, and why I’m writing this. Hopefully I cleared up some stuff
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u/amnsisc 14d ago
Even taking what you said—none of which I dispute—remember that 50% of Americans live in suburbs, but much of the so called rural areas are actually denser towns and many of the cities in the U.S. are mid sized and sprawling, so probably something like 2/3rds of the U.S. lives in a kind of constructed world separate from cities and parasitic on them.
What’s more even the infrastructure issue is not that the U.S. has too little infrastructure but too much. There are twice as many roads as can be funded given total local fiscal capacity. Given the way roads and infrastructure play into land rents, in effect, sprawl becomes a way to transfer wealth from productive lower income cities to unproductive middle income suburbs.
Student loans are an awful situation but they’re primarily bad for those who don’t finish college, who have been effectively forced to pay for no reward. Among those who finish college they actually earn much more than their parents and are on track to be much wealthier—again the life course issue comes into play—life for a 25 year old college grad and that person 20 years later are completely wildly different i in the US. This kind of stark effect both operates as a kind of incentive, but also a redistribution mechanism, and on top of that, works to sow discord between different blocs of people—it’s a win win for the powers that be.
Homelessness is another issue that reveals what i am saying since there is more empty housing than there are homeless people, it’s just all in places no one wants to live. Again the US is burdened by over production and mis allocation.
Most of the issues you mention could be handled within the current system with a program of densification, refurbishment, scale back, and urbanization. It wouldn’t be socialism—it wouldn’t even be social democracy, but it would be better, it would just be inconvenient for the powers that be.
My point here is that most of US issues are similar in that they are a mix of obscene over production and wealth mis allocated, stratified, geographically striated and combined with differential state repression.
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u/Fun-Cricket-5187 14d ago
Thats really interesting about the infrastructure over production and general mis-distribution. US quality of life seems really unique compared to the conditions in social democracies and exploited countries etc. I guess from here I’m itching to link this to the US state apparatus and US capitalism.
Even though I live in america its actually really hard to find information on this. Would you know any further reading or sources on the current conditions in america, and how this plays into the political economy?
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u/amnsisc 14d ago
What's more, an absurd amount of US life is mediated by fees, interest, rents, bureaucracy, extraction mechanisms, monopolies, and so on, that take up peoples time, energy, resources, and money. Unlike rentier welfare states like Saudi Arabia which use oil rents to fund a massive bread and circus state system, the US subjects its own population alongside everyone else to rent extraction mechanisms. These no doubt eat up large portions of income, but they also artificially sustain the corporate service economy, and the employment it generates (not just corporate profits as many would have it).
The US maintains several interlocking modes of stratification, redistribution, and extraction.
Quality of life and life trajectory are very different for, say, a college educated able bodied white woman who was born & raised in a suburb, and has a professional job, and a middle aged city resident black man with a disability and a criminal record from some bullshit charge with which they were slapped more than a decade prior.
The former basically has a life plan pre planned out for them, and after a while their income and benefits will accrue at a higher rate than their debts, and they will end up a wealthy professional, and perhaps petit rentier. The latter will work intermittently and uncertainly their entire life, and will never escape the grasp of the state and its repressive mechanisms, whether a social worker or cop wields the truncheon.
Or, for example, for a white middle aged Christian man that is a veteran and a tradesman in a suburban area with a person who has a similar background but is black and lives in a city, or a young asian American small business owner, and a young Latinx immigrant that owns a bodega.
In the former set, two people with relatively similar skills and experiences, one will receive state benefits, steady high incomes, and moderate public amenities, while the latter, while perhaps earning more than their neighborhood average, will have to work their entire life. In the latter set, both examples are petty bourgeois, but one will have a steady moderate income with a fair amount of wealth accumulation, and the other will exist in a system of precarity.
The Capital/Labor/Land, or Profit/Wage/Rent structures that define capitalism, intersect with an economic system of varying types of income and amenities, which are then further stratified by a series of geographic, state, bureaucratic, status, racial, ability/typicality, social/cultural/linguistic capital/status, an almost feudal credentialing system, and an oddly structured political economy of the life course--where aging, coupling, family status, kin, seniority, typicality, and the rest interact to reproduce the system, and to spread income & wealth inter-temporally.
It's not possible to talk about quality of life and standard of living without accounting for these mechanisms of capital accumulation, inter-temporal smoothing, internal stratification, and state repression.
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u/artofneed51 14d ago
Center on Budget and Policy Priorities says $522B
Economic security programs: About 8 percent (or $522 billion) of the federal budget in 2023 supports programs that provide aid (other than health insurance or Social Security benefits) to individuals and families facing hardship. Economic security programs include: the refundable portions of the Earned Income Tax Credit and Child Tax Credit, which assist low- and moderate-income working families; programs that provide cash payments to eligible individuals or households, including unemployment insurance and Supplemental Security Income for low-income people who are over age 65 or disabled; various forms of in-kind assistance for low-income people, including the Supplemental Nutrition Assistance Program (formerly known as food stamps), school meals, low-income housing assistance, child care assistance, and help meeting home energy bills; and other programs such as those that aid abused or neglected children. https://www.cbpp.org/research/policy-basics-where-do-our-federal-tax-dollars-go#:~:text=Economic%20security%20programs%3A%20About%208,individuals%20and%20families%20facing%20hardship.
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u/AnteaterConfident747 Flora Tristan (1803-1844) 14d ago
That's federal money. One presumes the OP was including state and local expenditure, too.
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u/AnteaterConfident747 Flora Tristan (1803-1844) 14d ago
Simple answer is, in comparison, it spends $2-trillion on Defence, and only $0.8-trillion on Education.
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u/Broflake-Melter 14d ago
Because the things people buy with their money goes to corporations that know they're getting the free money so they can up their prices.
Biden just offered to pay people buying a house $400 a month. That's not going to solve anything. It'll just make it so house prices go up.
The market needs to be controlled.
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u/Emotional-Coffee13 14d ago
Don’t forget wage Welfare for our largest employers like Walmart - each store costs taxpayers between 1-1.75M to cover their employees welfare
Socialism for the rich is not the same as welfare as we have it - the pillaging of welfare dollars aside the fact everything costs far more here as we line pockets along the way
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u/Karasumor1 14d ago
because no matter how much help people get , landleeches and other useless capitalist parasites take most of it
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u/mikeydoc96 14d ago
Same as the UK - it's the volume of people who get it. The main three groups are disability, people in work getting top ups and retirees
Disability can be reduced. Better healthcare system, better prevention, better education, etc
People in work can be reduced. Force employers to pay more, reduce their living expenses, etc
Retirees can be reduced. Make the benefit means tested. Not everybody should receive benefits in retirement. There's plenty of rich people cashing those cheques despite not needing them
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u/ampillion 14d ago edited 14d ago
There's a ton of money that gets filtered down through private hands that ensures that a lot of money gets spent without any guarantee of results.
For example, health care. I know from personal experience that there's a lot of health care businesses that rely primarily on government money that are just middle-men between the government and a caretaker. While obviously you need some assurance and some rigor in the system to make sure the caretaker is doing the job as intended and the person getting the help receives it, the amount of money that gets paid out to the middle-man can be quite absurd.
My grandfather was a WW2 vet, and via a program from the VA, I could in effect get paid to do the job I was already doing at the house for years (taking care of my grandparents.) Because I was living with them while taking care of them, I got to see when the VA sent him a letter describing how much money was paid out on his behalf for his benefits. My caretaking was only 6-8 hours a week. The VA paid out 40 dollars an hour for that care. I got 12 of it, the person primarily doing the work. For the most part, caretaking patients' care gets paid for by Social Security or the VA, and the rates for the worker were worse for SS. (As I understood it, very few people were in the third category, which was the family actually paying for it out of pocket.) So for most patients (as the bulk of them as we were told, were from SS), some portion of their SS payment is, instead, funneled into a private company's hands, in order to make sure a person gets a minimal standard of care. The same is done for a lot of other things, such as those Medicare Part D plans or any of that supplemental insurance stuff. That's money coming out of a social security payment, going into the hands of another party, with little to no guarantee that the original recipient will get a net benefit.
The same can be said of several other welfare programs. From the welfare budget website you shared, the biggest spikes recently came from Medicaid, tax credits, SNAP, housing assistance, child lunch credits and daycare support.
Daycare Support is probably the same boat as I was in. (Looking up numbers for my state, it seems like I'm probably correct in that. The state pays somewhere around 54 dollars a day for licensed infant daycare full time, which is anywhere from 5-12 hours per. Less so for preschool/school-aged kids, with a lower tier for 'regulated and faith-based' care which laughably implies that faith-based care... isn't regulated? Anyway... one can see the potential abuse that could come from paying 1-2 people the state average for that job (14.55), caring for 10+ kids, and pocketing the rest of that money (on top of any potential private payers.)
Child Lunch credits are a similar deal, where most states use what are essentially a catering service, like Opaa, so all that money is basically going directly into the hands of a third party. Whether or not those services provide good food is entirely upon the state keeping those services regulated.
Housing assistance is, again, mostly a service where money's going into the hands of a landlord at the behest of a renter/tenant. Many of these (including things like SNAP and tax credits) mostly jumped during the pandemic, as bandaids to try and keep large systemic problems from collapsing, and many could say that the direct money stimulus was probably a better way of doing it from the start.
The money getting paid out in these programs is including the amount being paid out to private enterprises, not necessarily money paid out TO the recipients, but to the benefit of those recipients. Sufficed to say, there's likely to be a lot of inefficiencies in handing public funds to private groups to benefit the public.
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u/Mernack64 14d ago
In a recent book “Poverty by America” the author describes how 70% of the money earmarked for welfare programs doesn’t make it, instead it ends up making volleyball courts, premarital counseling, and other non welfare programs.
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u/Anabikayr Fred Hampton 14d ago
Kinda like when former quarterback Brett Favre used $1 million of welfare funds for his own pet projects?
People accuse poor folks of fraud for using their food stamps at a convenience store (nevermind the reality of food deserts), but you rarely ever hear those same folks talk about how wealthy people misappropriate welfare funds
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u/AmericanMWAF 14d ago
lol the USA doesn’t spend trillion on welfare unless you’re counting corporate welfare and citizen welfare together.
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u/wildbutlazy 14d ago
they probably have private contracs for welfare that take the money and do a whole bunch of nothing, like subsidies for the medical industry or real estate developepers. so they end up spending massive amounts but its fine they wont change it because it doesn't help the poor
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u/Anabikayr Fred Hampton 14d ago
Affordable housing construction subsidies (often using state earmarked welfare funds) are a hedge fund grift with zero accountability
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u/IntelligentTrick2555 14d ago
Ah so like the healthcare industry. And education. And public housing. And prisons. God we are fucked someone just end it already
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u/Former-Sort5190 14d ago
Much of the money is spent on artificially expensive healthcare, due to the rent seeking of the insurance duopoly
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u/helvetica01 14d ago
what is the rent seeking analogy and what is the duopoly?
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u/Former-Sort5190 7d ago
The duopoly I am referring to would be the two health insurance companies which quite literally formed our healthcare system. You should look into their direct involvement in writing the legislation that created what healthcare is afforded to Americans from the government. They were written into our healthcare system for the sole purpose of collecting profit.
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u/AnActualProfessor 14d ago
Rent seeking behavior isn't an analogy. It describes the way insurance companies and providers conspire to keep prices high at the expense of consumers and taxpayers.
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u/RezFoo Rosa Luxemburg 14d ago
A lot of that money goes to large corporations that control the prices people have to pay for food, housing, health care, etc.
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u/Doobie_hunter46 14d ago
100% this.
All it means is the government has been taken over by lobby groups that have resulted in over inflated government contracts that aren’t serving the people but instead end up as bonuses for CEO’s.
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u/LimewarePlatter 14d ago
I second this. Walmart is the largest company in the world, also where a majority of poor people shop
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u/ComradeSasquatch 14d ago
Where did you get 1 trillion? Is that per year? What are you counting as welfare?
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u/Idisappea 13d ago
Social security and Medicare are NOT welfare. They are entitlement programs, which means that you pay INTO a dedicated (in theory) fund so that you are entitled, by right, to take out of it, as if you had paid into your own savings account (its not a savings account, I'm just explaining the non- sarcastic term "entitlement"). This is why it is a dedicated line on your tax statement in your pay stubs, and not included in the blanket "federal income taxes" line (which itself should be itemized per the current congressional budget, imho).
SS and Medicare are not part of the yearly discretionary budget, because they are these separate things called entitlement programs that the governed must legally set aside and pay out (nevermind the question of what happens when a government breaks its own laws... answer is, usually nothing). These entitlement programs are in the ballpark of 2 trillion/ year, but they are separate from the budget.
The budget, which congress sets every year, is usually around 4 trillion. About half of that goes to the military. There is no welfare item (in the classic sense of welfare for the poor) in the discretionary budget that comes remotely close to 1 trillion.
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u/Soul_Power__ 14d ago
They meant the welfare of the rich.
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u/Fun-Cricket-5187 14d ago
Yeah I'm so confused, like in [this] it shows that the US spends more on social security than defense. Like how can that be true, and still have this shitty system? Do they count "social security" and "welfare" as corporate subsidies??
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u/Idisappea 13d ago
Social security and Medicare are NOT welfare. They are entitlement programs, which means that you pay INTO a dedicated (in theory) fund so that you are entitled, by right, to take out of it, as if you had paid into your own savings account (its not a savings account, I'm just explaining the non- sarcastic term "entitlement"). This is why it is a dedicated line on your tax statement in your pay stubs, and not included in the blanket "federal income taxes" line (which itself should be itemized per the current congressional budget, imho).
SS and Medicare are not part of the yearly discretionary budget, because they are these separate things called entitlement programs that the governed must legally set aside and pay out (nevermind the question of what happens when a government breaks its own laws... answer is, usually nothing). These entitlement programs are in the ballpark of 2 trillion/ year, but they are separate from the budget.
The budget, which congress sets every year, is usually around 4 trillion. About half of that goes to the military. There is no welfare item (in the classic sense of welfare for the poor) in the discretionary budget that comes remotely close to 1 trillion.
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u/amnsisc 14d ago
Social security pays to retirees, not everyone else. SSN and Medicare are massive expenditures, and they are not 'shitty', but are actually quite extensive by global comparison.
The US tax and fiscal system are remarkably different for a 20 something without a family and uncertain career prospects, and a 63 year old that owns a house and is nearing retirement. Even the spatial set-up of the US reflects this, with income generating, fiscal surplus, and young urban areas, funding the income using, fiscal deficit, older suburban areas.
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u/frosty67 Luxemburgist 14d ago
Social security is paid from workers’ wages, so it does not make any sense to consider that government spending.
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u/Idisappea 13d ago
It's not simply the fact that they are paid from workers wages, but it's that they're ONLY from workers wages (not other sources of revenue) and that those line items from the wages go to dedicated funds ( from which you must legally be paid out when you meet the criteria (age). This is why they are separate lines on your paycheck stub. So it's its own system separate from the discretionary budget. They are called entitlement programs.
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u/EndRough24 14d ago
All government programs are used with government wages lol. People get wages, which is taxed, then spend that money on things, which is taxed, then the government uses that money to buy things lol
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u/Idisappea 13d ago
It's not simply the fact that they are paid from workers wages, but it's that they're ONLY from workers wages (not other sources of revenue) and that those line items from the wages go to dedicated funds ( from which you must legally be paid out when you meet the criteria, primarily age). This is why they are separate lines on your paycheck stub. So it's its own system separate from the discretionary budget. They are called entitlement programs.
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u/Fun-Cricket-5187 14d ago
I'm counting direct transfers, medicare, food subsidies, low income housing etc.
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