Doug Ross: Don’t fear the fiscal cliff — fear the welfare cliff

Doug Ross – I dream of a day when vintage media covers the important issues, such as how the president’s policies are permanently condemning the nation’s poor to lives of misery.

I wrote last year about the way in which welfare programs lead to very high implicit marginal tax rates on low-income people. More specifically, they lose handouts when they earn income. As such, it is not very advantageous for them to climb the economic ladder because hard work is comparatively unrewarding… Thanks to the American Enterprise Institute, we now have a much more detailed picture showing the impact of redistribution programs on the incentive to earn more money.

…Needless to say, there’s not much reason to earn more income when living standards don’t improve. May as well stay home and goof off rather than work hard and produce… This is why income redistribution is so destructive, not just to taxpayers, but also to the people who get trapped into dependency.

And which candidate continues to press for more and more dependency?

[Does the name] Julia ring a bell … ? If you guessed Obama, pat yourself on the back. Why just yesterday he gutted theWork Requirements From Clinton-era Welfare Reform. As the chart indicates above, there is NO incentive to work and get off the government crutch and the Democrats are pushing forward with agendas to add more.

The problem for Obama and the Democrats is that eventually, you will lose many taxpayers as they give up the ghost and join those already on the teat of government. The reason will be that it is no longer worth having to work over 6 months of the year just to make enough to pay your taxes and then have only a few months of pay to spend on everything else.

Some call the inevitable result ‘Going Galt’. Professor Glenn Reynolds describes it as ‘Middle Class Anarchy’:

When the backbone of a country starts thinking that laws and rules are not worth following, it’s just a hop, skip and a jump to anarchy… 

TV has given us the illusion that anarchy is people rioting in the streets, smashing car windows and looting every store in sight. But there’s also the polite, quiet, far deadlier anarchy of the core citizenry—the upright citizenry—throwing in the towel and deciding it’s just not worth it anymore. If a big enough proportion of the populace—not even a majority, just a largish chunk—decides that it’s just not worth following the rules anymore, then that society’s days are numbered…