Entitlements

My last post on Millionaires and Billionaires made me realize that there are other loaded terms that get abused by politicians and ideologues. Others that come to mind are trickle-down, socialists, entitlements, etc. Each of these words has an objective meaning but they also stand-in for 4-letter words used to provoke and injure. So I thought I would continue this line of thinking by concentrating on entitlements this time.

Let’s begin with a definition. Wikipedia defines 'entitlement' as "... a guarantee of access to benefits because of rights, or by agreement through law." I like that definition – it is general. I signed a lease agreement entitling the landlord to a monthly payment. I am entitled to various things including a toilet that functions. We enter into explicit and implicit contracts all the time.  I pay taxes to the City of Bloomington and feel entitled to some degree of police and fire protection.

I see that I am putting some of you to sleep so let’s move on to a discussion of thermodynamics. Just kidding. While the definition of the word entitlement is pretty boring it gets a lot more heated when we start using it as a curse word. You are a lousy entitlement. You are dumber than two entitlements. No, that's not what I mean either. Somewhere along the line we used to classify government spending as expenditures on goods, services, and transfers. A government transfer is defined as a payment from the government’s budget to an individual. The word transfer literally meant the government was not paying for a good (Boeing aircraft) or a service (a teacher provides a service of education). Instead it was transferring money to an individual because a law provided that persons should receive money from the government. Many of these transfers were in the nature of welfare legislation which provided that people meeting eligibility requirements of the laws would receive payments from the government because they were old, sick, poor, etc.

Some people interpret the word transfer payment as a transfer of money from the rich to the poor. But that is not the real meaning. For example, any time the government pays for a good or a service, we don’t call that a transfer because we are taking money from the rich (or anyone else) and giving it to Boeing or Larry’s Wonderful Consulting Company. So why would you call it a transfer when the government took money from some people and gave it to the poor, old, and sick. All government spending is the same in the sense that tax payers are asked to give up money so it can go to people who provide goods and services and to people who are eligible for government assistance.

Notice that all this government spending is guided by the legislated laws of the land which presumably are consistent with the Constitution. While you might not agree with government spending on any particular program no one type of spending is any less legitimate than another. So maybe you don’t like defense spending. Or maybe you are very much against your local government paying a consultant to estimate the economic impact of owl habitats. You might think that the government pays poor people too much money. Whatever, if you don’t like it you can vote for people who will make legislation that is more compatible with your views. Until that time, it is what it is.

Still awake? Sorry. Do some pushups and drink a Cass. Maybe that will help.

Somehow the above terminology got sidetracked. Somehow we started using the word entitlement. Notice that in the strict sense of the definition, this is not a bad word to use for any kind of government spending. The strict sense of the word implies that legislation requires responsibilities of the parties. In the case of government spending a defense bill approves money to Boeing. Another bill allocates funding be spent on various service providers. Another bill sets funding for Medicare. These bills create an entitlement just like a lease creates an entitlement. There are good leases and bad leases. There are good bills and bad bills. But notice that citizens are entitled to what the bills support. To say that spending on Medicare is an entitlement means absolutely nothing. Spending on battleships, office machines, soldiers, policemen, teachers, poverty and social security are all entitlements.

So how did we get from there to here? Congressmen shout about entitlements as if they were the expenses of government employees on lavish hotels, illegal drugs and prostitutes. Entitlement has become the latest curse word to throw at liberals. Just like millionaires and billionaires, throwing out these words is meant to denigrate a group of people. It stereotypes and misleads. Millionaires and billionaires is often meant to indicate that high income high wealth people don’t do their fair share for the country. Entitlement conjures up an image of laggards who demand excessive support from the government to not have to work or be responsible citizens.

My liberal friends hated what I said last week because they felt I was being unfair to them. Sure they want millionaires and billionaires to pay more taxes but my liberal friends don’t use these words in the hateful manner in which I alleged last week. But for every one of you there is another Democrat who intends the worst stereotype. This week my conservative friends will be howling mad. They don’t have this awful image of people who receive entitlements – they will explain they are just saying that the current laws don’t serve their ends. But for every one of you, there is a Republican who holds and expresses these negative stereotypes of people who receive government transfer payments.

Thanks to a good retirement system and personal saving I am both a millionaire and a receiver of entitlements. So I get personally offended when I hear people use those words in obvious negative tones. I started working at the age of 18 and have been paying into the Social Security and Medicare systems ever since then. I don’t feel entitled to anything except in the same way I feel entitled to a good toilet. The law says that by virtue of reaching an old age, by making those payments for nearly 50 years and having to pee 12 times a night I should receive these government expenditures. I personally don’t give a hoot about moral debates that might argue whether or not I am entitled to these payments. I am entitled because the law says I am entitled. That’s all there is to it. If a hobo is similarly entitled to a rent subsidy, a food coupon, or an outright payment, so be it. If the law says it, then they are entitled.

So what am I saying? I am saying what I say over and over. This use of colorful stereotypical words and phrases is like yelling unkind names at the basketball team that just beat you. Maybe it makes you feel better but the truth is what you need to do is huddle with the coach and figure out why you lost and come up with a better strategy for winning the next game. Calling names is not only useless but it might actually harm you by making the other guys want to beat you even more. You Democrats please stop talking about millionaires and billionaires. You Republicans stop moaning about entitlements. What you both want is relief from this horrible economic malaise. The only way to accomplish that is being realistic, open and objective about the source of our current problems and work to create majorities that will support programs that directly create remediation. Pointing fingers and demonizing the rich or poor just ain’t going to cut it.