Five Misconceptions About our Tattered Safety Net

Search form

Five Misconceptions About our Tattered Safety Net

Five Misconceptions About our Tattered Safety Net
Mon, 11/19/2012 - by Paul Buchheit
This article originally appeared on Common Dreams

How many people know that out of 150 countries, we have the 4th-highest wealth disparity? Only Zimbabwe, Namibia, and Switzerland are worse.

It's not just economic inequality that's plaguing our country. It's lack of opportunity. It's a dismissal of poor people as lazy, or as threats to society. More than any other issue over the next four years, we need to address the growing divide in our nation, to tone down our winner-take-all philosophy, to provide job opportunities for people who want to contribute to society.

Here are some of the common misconceptions:

1.Americans believe that the poorest 40 percent own about 10% of the wealth.

Most people greatly underestimate the level of inequality in our country, guessing that the poorest 40 percent own about 10% of the wealth, when in reality they own much less than 1% of the wealth. Out of every dollar, they own a third of a penny.

Factor in race, and it gets worse. Much of minority wealth exists in home values. But housing crashed, while the financial wealth owned almost entirely (93% of it) by the richest quintile of Americans has rebounded to lofty pre-recession levels.

As a result, for every dollar of NON-HOME wealth owned by white families, people of color have only one cent. Median wealth for a single white woman is over $40,000. For black and Hispanic women it is a little over $100.

2.Entitlements are the problem

No, they're not. The evidence is overwhelming. Social Security is a popular and well-run program. As summarized by Bernie Sanders, "Social Security, which is funded by the payroll tax, has not contributed one nickel to the deficit and, according to its trustees, can pay 100 percent of all benefits owed to every eligible American for the next 21 years." Dean Baker calls it "perhaps the greatest success story of any program in U.S. history."

Medicare, which is largely without the profit motive and the competing sources of billing, is efficiently run, for all eligible Americans. According to the Council for Affordable Health Insurance, medical administrative costs as a percentage of claims are about three times higher for private insurance than for Medicare. And it's just as popular as Social Security.

3.Welfare benefits are a drag on the economy

Critics bemoan the amounts of aid being lavished on lower-income Americans, making dubious claims about thousands of dollars going to every poor family. But despite an ever-growing need for jobs and basic living necessities, federal spending on poverty programs is a small part of the budget, and it's been that way for almost 50 years, increasing from 0.8 percent of GDP in 1962 to 1.2 percent of GDP in 2007.

Temporary Assistance for Needy Families (TANF) has dropped significantly over the past 15 years, leaving benefit levels far below the poverty line for most families. Ninety percent of the available benefits go to the elderly, the disabled, or working households.

For each family, current federal budgets pay about $400 per month for food, housing, and traditional 'welfare' programs. Food stamp recipients get $4.30 a day.

4.The American Dream is still alive - if you just work hard

The Horatio Alger tale has been a popular one for conservatives, but the OECD, the Economic Policy Institute, and the National Journal all came to the same conclusion: the future earnings of a child in the U.S. is closely correlated to the earnings of his or her parents. This lack of mobility is more prevalent in the U.S. than in almost all other OECD countries.

Only 4 percent of those raised in the bottom quintile make it to the top quintile as adults. Only about 20 percent even make it to the top half.

A big part of the problem is the severe degree of poverty for our nation's children. According to UNICEF, among industrialized countries only Romania has a higher child poverty rate than the United States. Just in the last ten years the number of impoverished American children increased by 30 percent.

Not unexpectedly, it's much worse for minorities. While 12 percent of white children live in poverty, 35 percent of Hispanic children and 39% of black children start their lives in conditions that make simple survival more important than the American Dream. Eighty percent of black children who started in or near the top half of U.S. income levels experienced downward mobility later in life.

5.Prison puts away the bad guys

Despite a falling violent crime rate in the U.S., there are now, as noted by Adam Gopnik, "more people under 'correctional supervision' in America - more than six million -- than were in the Gulag Archipelago under Stalin at its height."

Incredibly, almost half of the inmates in federal prisons were jailed for drug offenses. Between 1980 and 2003, the number of drug offenders in prison or jail increased by 1100% from 41,100 in 1980 to 493,800 in 2003.

Outrageously, African Americans constituted 53.5 percent of all persons who entered prison because of a drug conviction. In the nation's largest cities, drug arrests for African Americans rose at three times the rate for whites from 1980 to 2003.

In Washington, D.C., it is estimated that three out of four young black men will serve time in prison. In New York, with 50,000 marijuana arrests per year, 90% are black or Latino. In Seattle, the 8% black population accounts for 60 percent of the arrests. Over the last ten years Colorado police have arrested Latinos at 1.5 times the rate of whites, and blacks at over 3 times the rate of whites. Newly passed marijuana laws reflect the beginnings of a backlash.

Perversely, this is all happening as studies by the Substance Abuse and Mental Health Services Administration find that both black and Hispanic adolescents use drugs LESS than the general population, and as a study by the National Institute of Health shows that the prevalence of marijuana use in colleges and universities was highest for white students.

The Greatest Misconception: The rich are being "soaked"

Redistribution has not spread the wealth, it has concentrated the wealth. Conservative estimates say the richest 1% have doubled their share of America's income in 30 years. It's worse. From 1980 to 2006, the richest 1% actually TRIPLED their share of after-tax income.

The real problem is tax avoidance: lost revenue from tax expenditures (deferrals and deductions), corporate tax avoidance, and tax haven losses could pay off the entire deficit. But the very rich refuse to pay. They have their own safety net in the House of Representatives.

Article Tabs

We must shift the national plan of action – taking the climate justice fight to the extraction hot spots, from Appalachia to Alaska and from the heartland to the coastal rigs and carbon export terminals.

It’s the first time one century has wrecked the prospects of the millennia to come, and it makes us mad enough to march – for those generations yet to come, our children, grandchildren, and their children.

The Rolling Jubilee group that grew out of Occupy Wall Street has purchased and eliminated a portfolio of private student loans worth millions at Corinthian Colleges in California.

Our window of opportunity to mitigate the climate crisis is narrow – and while it sometimes feels like an impossible burden, history shows people-powered movements like ours have succeeded before.

The solution to climate change is a system change – grounded in human rights and ecological stewardship, where communities and workers are in charge of investment priorities ensuring the right to live and work with dignity.

Organizers haven't been shy about their underlying intentions: using the September march in Manhattan as a platform on which to build an international environmental social movement unlike any previously seen.

Posted 4 days 21 hours ago

If you're planning to take to the streets in New York City or elsewhere this week, know that today's IMSI technology used by police or the FBI could greatly affect the privacy of your cell phone and protest communications.

Posted 2 days 21 hours ago

Shifting toward community-based renewable power is a strong thread running through Scotland's Radical Independence Campaign, and a free Scotland could inspire other countries to relinquish their fossil fuel addiction.

Posted 3 days 17 hours ago

"We know it is fraud. They know it is fraud. We look to anyone brave enough to stand up and defend the rights of the people," says homeowner defender Sherry Hernandez.

Posted 4 days 22 hours ago

Using social media and alternative news networks, activists and citizen journalists have found new ways to tell Americans the real story – it's immediate, it's personal, its electronic and its everywhere.

Posted 2 days 21 hours ago
Washington’s Revolving Door Is Hazardous to Our Health

We’ve seen how Washington insiders write the rules of politics and the economy to protect powerful special interests. But as we enter the holiday season we’re getting a refresher course in just how that inside game is played.

It is frustrating (and terrifying) to devote so much of our effort to preventing fossil fuel expansion rather than actually reducing emissions, but springtime brings some good news from the northwest coast.

Police Can Record Video Inside Your Home Without A Warrant

A federal appeals court ruled last week that police can secretly videotape a suspect’s home without a warrant.

A massive land grab has once again turned our homes into dangerous financial products.

With the conflict over two coal export terminals brewing on the horizon and an incumbent mayor making big climate promises, Seattle is emerging as the center of a new climate showdown.

Sign Up