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curity constitutional by offering a new, sweeping understanding of the constitution’s “general welfare” clause in Article 1, Section 8: “The Congress shall have Power To Lay and collect Taxes … (to) provide for the common Defence and general welfare.”
General welfare had always been understood to be about implementation of explicit authorities enumerated in the Constitution. Now general welfare could be just about anything the congress wanted to do.
Helvering v. Davis and Social Security opened the door to today’s modern welfare state.
Social Security was the nation’s first “transfer payment” program, in which one set of taxpayers could be taxed and that revenue used to transfer to others for purposes that congress deemed in the “general welfare.”
Per economist/blogger Scott Grannis, transfer payments now tally up to about $4 trillion annually, almost two-thirds of the federal budget. They now constitute over 20% of Americans’ disposable income, compared to 5% in the 1950s.
In case some still think Social Security is an investment retirement program, please think again.
It is a welfare state transfer program, in which taxes those working now pay are used to make payments to those currently retired.
Shortly after Social Security became law, there were more than 40 working and paying taxes for every retiree. Today, because of increasing life spans and decreasing birth rates, there are three. The Congressional Budget Office says that Social Security revenues will fall short by 23% of obligations by 2034.
The welfare state idea does not even have an American pedigree. It has its roots in 19th-century European socialism.
Our fiscal problems today are not about accounting but about principles. We need to restore American principles of ownership and freedom.
This would be a great boon. Particularly to lowincome Americans that social welfare programs are supposedly helping. Per the Committee to Unleash Prosperity, if a single person earning 45% of national median income could invest 10% of their income in a diversified stock/bond portfolio over a 40-year working life, rather than paying Social Security taxes, they could purchase an annuity at retirement worth $37,784, compared to $11,923 that they would get from Social Security.
With all the cries about the wealth gap in the country, per the Federal Reserve, only 34% of Black households, and 24% of Hispanic house, own stocks, compared to 61% of white households.
By restoring American principles of ownership and freedom, we can fix our fiscal problems and make every American healthier and wealthier.
Star Parker is president of the Center for Urban Renewal and Education and host of the weekly television show “Cure America with Star Parker.” To find out more about Star Parker and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www. creators.com. COPYRIGHT 2023 CREATORS. COM