A FRESH Start (Focusing Resources on Effective Sustainable Help)

 

 

Public assistance is something most Americans frown upon. However, individuals who are unable to generate steady income often need a slight push back on their feet. This is where public assistance is supposed to step in; unfortunately, it's a bit more complicated than that. There are several programs designed to help families in need and those suffering a setback. Some of the main ones I will cover briefly just to touch on their impacts and potential improvements. TANF or Temporary Assistance to Needy Families used to be known as "Welfare." States are given block grants from the Government to assist families who are in need. These grants are supposed to aid families on TANF, but the payments do not cover fair Market Rent in any state. 40% or less is actually covered by TANF in 17 states for a decent two-bedroom apartment. It's sad to say, but every recipient of TANF is literally unable to afford a modest place to live. Studies have shown that TANF benefits have decreased since 1996 after welfare reform, and 37 states are 20% below what they were before welfare reform. Compared with inflation; income has either remained the same or decreased, which is quite alarming. 

 

There have been attempts to combine different public assistance programs, but they just don't work. TANF falls behind the cost of housing, and it's not even enough to pull families out of poverty when it's coupled with SNAP. Approximately 46 million individuals in the U.S. benefit from SNAP, and the costs of SNAP is about 68 billion dollars per year, which is less than 2% of the federal budget. A common complaint about poverty prevention is that it focuses too much on relieving pain without helping to create self-sufficiency. However, how do we create self-sufficiency when our current public assistance programs keep low-income earners trapped? The objective is to help people return to work, ease the burden of having to meet government standards to qualify, and develop the skills needed to progress in the workforce. 

  

Our current solutions will not fix all of our issues; therefore, we need a modular approach to ending poverty. For instance, finding stable employment can be difficult, let alone finding decent and affordable childcare when you need it. Sometimes the job is seasonal or part-time and may not contribute to the help you need. It becomes far more challenging to find suitable work, the longer you are unemployed. Sometimes crappy work is far worse than receiving government assistance. Other times, people have health and social reasons why they can not find a job. Whatever the case, most people have particular problems that our current government programs can not resolve. Cash in hand is, therefore, always a good concept. You are allowing people to make life work for them, the best they know how to. 

 

The EITC (Earned Income Tax Credit) has been around for decades, and it gives thousands back to working Americans who live within the poverty line. This program has been the only proven method of reducing poverty. It provides money for working individuals; the more you work, the higher the result, up to a certain threshold. It is a financial incentive to work and earn more. Unfortunately, the majority of households are not benefiting from EITC as they make too much money. The amount of money is actually decreasing as earnings rise, eventually capping off a little over $50,000. In 2015, an increase in EITC of $1000 was discovered by the National Board of Economic Research to be linked to a rise of 7.3 percent increase in employment and a decrease in poverty for families of 9.4 percent. Supporters say the EITC alone has removed almost 6.5 million individuals from poverty and is the most efficient program in the U.S. to reduce poverty. In 2015, EITC, in combination with the child tax credit, allowed families in poverty to find the relief they needed. This cash incentive works very well because it directly boosts the income of those who need it the most, just like the UBI. Working families spend money in their communities when they have more of it to actually spend. Now imagine the EITC, Child Tax credit, an FJG, UBI, a customized Public Aid Framework, and Teleworking.

 

  • Step 1 - Raise the minimum amount earned from EITC by several thousand; this will drastically reduce poverty. The current proposal of a Federal Jobs Guarantee at a $15 per hour wage, plus Medicaid and SNAP, still does not meet the basic needs in most parts of the country. Therefore, raising the EITC and giving it to families each month as a "Cost of living" refund, coupled with a guaranteed Universal Basic Income of $1000 per month to every American adult. A guaranteed federal jobs program that will be great for those unable to find work and a fallback for those already employed; at a minimum wage of $15 per hour. A public aid framework tailored to the individual or family and a guaranteed dual income for families by allowing those who can, to telework This will ensure every American is out of poverty permanently. This will be writing the tax code in favor of ordinary citizens.

  • Step 2 - Extend the EITC into the middle class. 

  • Step 3 - Expand the benefits to people who are not precisely covered, childcare providers, stay at home moms, seniors, and college students, etc.

  • Step 4 - Incentives business to go green. Recommending that most employees telework. This will reduce congestion on roads and add to a better work-life balance that we all need. The goal is to enjoy life, not work ourselves to death, worrying about how to work ourselves to death to overpay for things that should be guaranteed to us. 

 

Let's talk about the typical household. Most parents are salary earners in either a 2-parent family or a single-parent family. Giving cash to families is the only compelling option to help them make the choices they feel are necessary to get out of or away from poverty. Coming up with the perfect idea to end poverty is tricky. Several steps need to happen, and different components need to work together for it to work effectively. Take into account the cost of childcare and development programs, which is around $8.6 billion per year and serving about 824,000 families per month. About 4.5 million individuals receive housing assistance; rent/mortgage accounting for 30 percent of the family income and costing $40 billion annually to maintain. Around 75 million Americans are covered by Medicaid and cost approximately $458 billion a year. These numbers seem staggering, not to mention several other programs that aid those in need. However, it is a serious problem because these numbers do not account for those who do not qualify for public assistance. Those who make just a little too much could fall through the cracks because they are only one paycheck away from being in poverty. No one should have to choose between providing for their family and being a good parent.

 

The reason we have such a difficult time ending poverty is because of how we view the problem. Supply and demand and GDP are the measurements we currently use to measure our country's success; however, a fresh way of measuring the economy is needed. The average wage in 1979 was approximately $43K, compared to $45K in 2018. The U.S. economy grew about three times its size between 1979 and 2018. Most profits have gone to top earners, and some claim that globalization and technology have added to this economic divide. All this was triggered by the free market's "invisible hand." As globalization took place in the United States, employees were forced to compete with overseas employees and software. This ultimately sped up the wealth gap and essentially cemented low-income earners to the bottom. 

 

Researchers argue that better schooling and training would boost salaries, make earners more competitive, and thus reduce the skills gap created by globalization. The most important factors are ignored by modern opinion, and that is, without people building the rules and legislation, markets can not exist. Capitalism worked well for so many individuals not so long ago, and some claim this is part of what is known as a countervailing power. The power of Wall Street, the large companies, and the wealthy were checked by this countervailing power.

 

 All of these forces were introduced in the New Deal; labor unions, state and local banks, farms cooperatives, and small retail chains. All of this balanced the U.S. system. Since the 70s, these forces have been demolished, and the system has become unbalanced, with economic inequality growing and salaries sitting idle. The rules of financial gains are determined by money coming from large companies, Wall Street, and the wealthy. These laws create more cash at the top, and it stays there.

 

For instance, tax cuts or loopholes for big businesses, the rich and financial sectors, and the bank bailout, compared to the little or no aid to homeowners during the great recession. The growing obstacles to the unions Like the Right-to-Work legislation, the erosion of anti-trust laws, and the rise of massive corporate influence in politics. There is a struggle against establishment now, and the public knows the game is rigged. Tyrannical politicians use anger to target racial and ethnic minorities to steer them astray. This is why progressives are the only solution to Authoritarian power. The question is, how do we build new countervailing power and move toward modern progressive economics?

 

  • Speak on politically powerful economics. It is not a battle between a free market and Government that the choice is made; the question is who can and for who can organize a free market.

  • The political decisions have led to stagnant salaries, employment insecurities, increased inequality, and rising wealth at the top.

  • Efficiency and economic growth are the most significant objectives. But policies can make the rich even richer if no one else is worse off, and that won't fix our problem. If economic gains continue upwards and nothing trickles down, that growth will be pointless.

  • Stop assuming that improved education and training are all that is necessary to get ahead. Americans require better education and training access, but not merely a skills gap is the fundamental issue. It is an unorganized market, which promotes more earnings and wealth to the top instead of widely distributing it.

  • Stop redistributing the earnings from the wealthy to lower-income households. Instead, reorganize the market so that it can be fairly distributed.  

  • The goal is not to create more jobs; the issue is a scarcity of good jobs. 

  • The economy cannot generate widespread prosperity without a large and growing middle-class whose spending fuels the economy.

    • To achieve this, a multi-racial, multi-ethnic middle class, working-class, and poor alliance needs to be formed.

    • Provide an impressive series of thoughts about what countervailing power should do. For example, a Universal Basic Income, so that no one is impoverished. A guaranteed job so that everyone can get ahead. Recommending telework so that a guaranteed dual income is available for most families. A progressive wealth, VAT and capital gains tax to help pay for these and other basics, increasing the bargaining power for workers by strengthening unions. New forms of a corporate organization, so workers have a stronger voice. Revamped anti-trust laws so that concentrations of economic power are broken up. Eliminate the connection between big money and politics, and close the revolving door by reforming election finance.

    • Voting changes so votes can not be suppressed and Democracy Dollars to give to every American citizen, for each federal election.

    • Strengthen the leadership that improves our country. Get out and support your local non-profits, run for office, organize and mobilize, create unions, strive for better roads and schools, fair taxes, use churches to demand better treatment of the poor. Connect to other organizations and start a movement, build, and develop a team.

 

 

Let's take a look at the proposal, Federal Jobs Guarantee, which is an excellent plan. However, it builds on the assumption that the Government will approximately guarantee 13 million jobs to those who are unemployed. This would be all work in infrastructure, and that's nothing new. Donald Trump, Bernie Sanders, FDR, and Barrack Obama all suggested this concept. The simple idea is to recruit several million people to build roads, bridges, parks, etc. My concern is, If you have no plan to make this work permanent, people will end up doing project work and become stressed because they know this work will soon end. 

 

FJG is said to eradicate poverty by providing an initial minimum salary of around $24,000 or an hourly wage of about $11.83. This is the poverty rate for a household of 4. This also contradicts the minimum wage increase of $15 that most support. The Federal Government pays roughly 12 dollars an hour, but $15 an hour is paid for by the private sector. Aside from that, workers will be able to move ahead in the program and earn up to an estimated salary of around $32,000; wages will rise with inflation to ensure workers have buying power. As inflation increases, the minimum program salary will also increase to satisfy the national minimum wage.

 

What happens here is cash will be injected into the economy by government spending, and inflation will increase. This indicates that the minimum salary must be updated if we are following the program guidelines. While the program aims to provide consumers with a foundation, increased negotiating power, and provide those who can not find jobs with income. FJG will also boost business costs, which will raise consumer prices by compensating for the additional expenses of wage increases. If they are unable to do so, they may be laying off employees to keep sensible costs. The federal jobs program is where laid-off employees will go as wages continue to increase for price inflation due to the Government'sGovernment's regulation of wage competition. Certain things within this proposal need to be changed so that we do not create a problem trying to fix a problem. 

 

Now let's see how the Government plays its part to help Americans. You rarely hear people complain about welfare programs lining the pockets of wealthy corporations and taxpayers pay for these programs. Taxpayers are projected to save about $39 billion over ten years if these welfare programs were stopped. The fossil fuel industry is one group receiving subsidies that we pay for. They default on their tax bills for the costs of petroleum explorations and mining expenses every year. Billions in subsidies for conglomerates of agriculture, pharmaceutical, technological, and defense companies are paid for by taxpayers as well. 

 

States and local governments distribute corporate welfare as well, with no conditions. In 2013, the State of Washington supported Boeing by giving them $8.7 billion to keep its workers in Washington and to expand within the state. The following year, Boeing laid-off over 12,000 employees. It is projected that state and local tax cuts cost local schools $26 billion in missed annual income. These tax breaks do not generate jobs; companies only transfer jobs from one state to another. They spend hundreds of billions on lobbying and campaign contributions, which ultimately leads to workers having to use public assistance. This ends up causing other Americans to finance public support through taxes.

 

It costs taxpayers when corporations receive special handouts from the Government. To compensate for these subsidies, loopholes, and hidden breaks, we have to pay more in taxes. For the rich, its socialism, for everyone else, capitalism. Socialism means doing nothing to conservatives and getting something back. For example, this describes General Motors' recent federal contracts of $600 million and tax breaks of $500 million. Corporate welfare often goes into the CEO's pockets, and by the end of 2019, GM plans to lay off more than 14,000 workers and shut down seven plants. Banks that are "Too Big to Fail" saved approximately $21 billion from Trump's tax cuts, while bank workers lost their jobs. These banks also enjoy hidden annual payments of roughly $83 billion. These subsidies give a tremendous advantage to Wall Street banks and leave no room for the average citizen. Americans need a piece of American pie, too, and stronger safety nets. It is not socialism; it is its fairness.

 

This is how we can do it,

  • Workers are consumers, and they account for 70% of all U.S. economic activity.

  • People in the top spend much less of their income than people in the bottom.

  • There is not enough purchasing power to keep the economy moving when most of the economic gains go to the top. 

  • A larger share of total income must go to the middle class and the poor to have sufficient demands for goods and services. 

  • This reform requires a higher minimum wage, higher EITC, lower-middle-class and poor taxes, financed by higher wealth and capital gains tax, a VAT tax, higher bargaining power with unions, incentivized telework, a tailored Public Aids Framework and a Universal Basic Income.

  • These changes don't hurt the wealthy. They'll do better with a smaller share of a fast-growing economy from the one we've got now that's barely growing. Never underestimate your power as a consumer. We need to make things moving, boycotting businesses if we have too. Make noise, or suffer in silence. 

 

 

How about the spending? Well, since 2001, the budget for the Pentagon has risen from $456 billion (adjusted for inflation) to over $700 billion in 2018. Military and National Defense-related spending now consumes a considerable amount of the discretionary budget. In 2019, the Base budget total is $554.1 Billion, War budget, $173.8 Billion, Nuclear budget, $24.8 Billion, Defense-related activities $9 Billion, Homeland Security $69.2 Billion, International Affairs $51 Billion, Intelligence budget $80 Billion, the total comes out to about $881.9 Billion.  

 

The U.S. spends more on the Military and National Defense budget than China, Saudi Arabia, Russia, India, the United Kingdom, France, Japan, Germany, South Korea, and Brazil combined. Some say there is a need for military spending to create more jobs for America. We already have a plan for a jobs program that is aiming to develop the projects we need. Such as modern roads, highways, school facilities, water, and wastewater facilities, and safe power. 

 

The military-industrial complex is the main reason for the rise in Pentagon spending. Since getting into office, Trump has raised the military budget by $200 billion. It might have been wiser to invest that cash in other ways. For example, 

  • It would cost about $70 billion per year for tuition-free and accessible schools, with about $3 billion remaining for the states to cover.

  • The Children's Health Insurance Program (CHIP) - $14 billion per year

  • Expanding internet access to rural America would cost about $79 billion per year

  • Low-income housing would cost $40 billion per year

 

Currently, our tax system does not work for us either. Cutting taxes on wealthy and large companies does not contribute to more jobs, a trickle-up and middle-out economy will. Trickle-down economics doesn't work because cash flows internationally. Corporations and the wealthy whose taxes are cut spend their additional money wherever they get the highest return. At its core, the productivity of America depends on the productivity of its workers; achievement and growth depend on education, health, infrastructure, and investments in the middle-class and low-income. 

 

There is always an argument about increasing taxes on top earners. This is important and must be increased because we have a massive deficit in the budget. Bill Clinton raised taxes on high earners in 1993, for those earning $250,000 or more per year from 31% to 39.6%. Conservatives said this would cause a financial catastrophe, but 23 million jobs were created, and the country flourished for eight consecutive years. This was the longest economic expansion in the history of the United States, and the federal budget had a surplus. George Bush reduced taxes from 39.6 percent to 35 percent in 2001, while also decreasing capital gains and dividends. Conservatives said this would help the economy, but it barely grew, and instead, it collapsed in 2008.

 

If we do not fix these issues now, we will have less public healthcare, fewer investments in public schools. We will pay more in taxes to offset what the wealthy are not paying. The rich don't pay nearly as much as they used to pay in taxes. They're getting a lower rate now than at any point in the last 50 years. Before 1981, the tax rate was 70% or more, the rich paid at least 52%, even with deductions and tax credits. Now, the rate is down to 35%, but they pay less because much of their income is in capital gains. The rich do not create jobs; the real job creators are the middle class who's spending creates jobs. Inequality in income is so high because the nation's wealth continues to travel to the top and not the middle class, which is one reason why unemployment is still high. The economy does not deteriorate because of a wealth tax. It does because the wealth gap creates a vicious cycle; It's not class warfare, it's only common sense. 

 

Conservatives say too much has been wasted on stuff like welfare, food stamps, and so on. However in 2016, the Government used the Discretionary Budget to spend 4% on foreign aid and international affairs, 3% on science and technology, 3% on natural resources and the environment, 3% on public transportation, 2% on community and regional development, 5% on law enforcement and the entire Department of Justice system, 5% on the CDC and NIH, 6% on public aid, 7% on education, 7% on veterans benefits, 1% on all other services and 54% on the Military. Social Security, Medicare, Medicaid, and the Affordable Care act are all required spending, we've paid and continue to pay for these services when we're paid. So if conservatives do not cut from the discretionary budget, they're going to trim from the required spending.

 

 

Maybe with a few tweaks here and there, our economy could actually work for everyone.  

 

Goals:

 

  • Must be able to work in some capacity or volunteer

  • Will be available to all those who need assistance, no income cap.

  • The program will be specifically tailored to the individual and or family. 

  • The program will only last four years or until you can comfortably live on your own, whatever comes first. 

  • Help create publicly funded senior assisted living homes

  • Homes for the disabled 

  • When you make more, assistance will slowly decrease to just enough where you can get by. This will help motivate you to make more, to the point where you require no support. 

  • The program will provide training to high-value projects and steer enrollees into the field if they are looking for work. 

  • Wages will increase steadily with inflation

  • Hot-swap rules to make them work for the individual and family

  • Paid family leave, Universal and reliable childcare, Preschool for all. All financed by employers and taxpayers.

  • EITC cash raised by several thousand and given as a monthly stipend.

  • Business incentives to allow employees to telework. This will guarantee dual income for families who can telework.