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Old 01-08-2011, 10:30 PM   #61
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Originally Posted by Westernskies View Post
(snip)I've said this before and I'll repeat it here - I do feel we need to provide for those unable to work. There are people who genuinely need our help.

Unfortunately, we've taught a lot of others how to loot, and turned them loose in the welfare benefits supermarket.
I think what we have here is a parallel to the question sometimes asked about legal/judicial systems: is it better to punish a hundred innocent people rather than have one guilty person evade paying for their crime, or would it be preferable to let a hundred guilty people go free lest one innocent person suffer for a crime s/he didn't commit? In the case of welfare the question would be should some people who are genuinely unable to work be left destitute to make sure no slacker gets a dime, or is it better to pay some slackers rather to ensure that no truly disabled person lacks subsistence? I doubt that it's possible to design benefit qualifications so that all the genuinely disabled can get them but not a single person who isn't does. In the end I think it comes down to, what sort of a country do we, the citizens, want this to be? I don't want people who could work given incentives not to, but even less do I want people who can't work to lack even the bare necessities of life.

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(snip) I agree with your statement that "All things being equal though, those born into the middle class have a much better chance to succeed than those born into economically poor environments". That isn't going to change, nor should it. The folks who can offer their kids that middle class chance at success worked hard for it; we don't want to "deward" them in favor of those who made different choices that resulted in a different outcome. That's life; we don't all get a trophy just for showing up.
What "this shouldn't change" means though, is that the children of poor parents are punished for the bad choices that their parents made, before they themselves had any option of choosing one way or the other. My parents and grandparents, maybe even my remoter forebears, all made choices which made it much more possible for me to make good choices, and I think also made it more likely that if I did so I would be rewarded. As an example, I chose to show up at school every day rather than cutting classes. That was easy for me, because the schools where I lived (due to the smart choices of my parents) were safe to go to and the teachers were competent. A student in the inner city might make the same choice I did, but if her school is gang-infested and the teachers are inferior, as may easily be the case, what will she gain by doing so? A substandard education that doesn't prepare her to succeed in college, unlike what I got as a result of "just showing up". Sir Isaac Newton once said "If I have seen a little further it is by standing on the shoulders of Giants." To me, that's the real meaning of the "birth lottery". Yes, personal choice matters, but the choices of our ancestors can give us a huge head start in life, or mean that we come up to bat with two strikes already against us. The fact that I haven't achieved my own success (such as it is) by my good choices alone, makes me loth to conclude that people who are failing are doing so due solely to their own bad decisions.

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We need to give the poor the chance (via education and workforce opportunities) to make something better out of their situation, not make it easier to stay where they are (via failed multi-generational entitlement programs). (snip).
I agree that should be the goal, but how exactly do we go about doing it? It's all very well to say, "no money without work" but private sector employers can't be forced to hire the people who are currently on welfare—so does the government become the employer of last resort and the taxpaying public at least gets some return in the form of work on the money that's currently being paid out in benefits? Is there in fact enough work to be done in this country for every able-bodied person now on welfare to earn a living wage? How can a system be set up so it incentivizes people to move ahead to economic self-sufficiency but yet is is an adequate safety net for people who are truly incapable of supporting themselves? I don't know the answers to these questions, or if they even have answers. Suggestions anyone?
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Old 01-08-2011, 10:56 PM   #62
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Is there in fact enough work to be done in this country for every able-bodied person now on welfare to earn a living wage? How can a system be set up so it incentivizes people to move ahead to economic self-sufficiency but yet is is an adequate safety net for people who are truly incapable of supporting themselves? I don't know the answers to these questions, or if they even have answers. Suggestions anyone?
Of course, there's no finite amount of work that needs to be divided among available workers. Tasks that are not worth hiring people to perform at $10 an hour may make economic sense at $5 per hour. If labor is cheaper, more jobs are created. Also, many of the things created with that cheaper labor will also be cheaper to buy, which helps everyone.

Conversely, when handouts diminish the incentive to work at low wages, the number of available jobs decreases.

I've got 2 inches of snow in my driveway right now. I'd pay someone ten bucks to clear it, but no one's knocking at the door for that work. It's too much trouble. Things are different in much of the world, and as US labor rates decline due to pressure from other countries things will change here. That's too bad, as it will be a sign of decreasing societal wealth.
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Old 01-08-2011, 11:02 PM   #63
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Originally Posted by ERD50
I'll say, the numbers appear to be 'cherry picked' to show the peak of the effect.
You acknowledge that your argument is based on cherry picked numbers yet you still continue to make an argument?!? Unbelievable.
Yes, I still continue to make an argument. I said (in as many words) the numbers appear to be 'cherry picked' to show the peak of the effect. It doesn't invalidate the concept. It's not unusual to use the best numbers to illustrate a point. Less dramatic cases would still have a similar, yet lesser effect.

There isn't enough data in that article to tell us how wide-spread this is, but that didn't appear to be the intent in that short of an article. I see it as food for thought. And based on reports from some of the LE types here from 'the trenches', it appears to be pretty wide spread.

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Old 01-08-2011, 11:36 PM   #64
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Originally Posted by kyounge1956 View Post
is it better to punish a hundred innocent people rather than have one guilty person evade paying for their crime, or would it be preferable to let a hundred guilty people go free lest one innocent person suffer for a crime s/he didn't commit?
It shouldn't be an either/or. We should strive to have the best systems in place to help those who need it, and keep fraud at a minimum. It'll never be perfect, but we need to rigorously evaluate these programs. Remember, we have limited resources to provide safety nets - the fraudulent ones are stealing from those who need it. They are part of the problem.



Quote:
... the "birth lottery" ... personal choice
There have been long threads on this, and I've seen little common ground from the two sides (and the pig settles it). IMO, rather than go down that road again, we ought to review the concept that the article in th OP presents - Do some of these programs provide, or are so easily scammed, that there is too little incentive to reduce their use of OPM?




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I agree that should be the goal, but how exactly do we go about doing it? It's all very well to say, "no money without work" but private sector employers can't be forced to hire the people who are currently on welfare—
I think you are missing the point. If the govt provides for these people at a relatively high level, some will demand wages that exceed that level before they go to work. So the business might have low-level jobs at 1.5x min wage, but they can't pay 3x or 4x min wage for that work (they will go offshore). It's not a matter of 'forcing' business to hire, it's a matter of creating an environment for workers and business to come together to produce.


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Is there in fact enough work to be done in this country for every able-bodied person now on welfare to earn a living wage?
Again, think of the jobs that have been outsourced. Or UAW workers making a multiple of non-union workers doing similar work. That reduces jobs - companies automate or go offshore.

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How can a system be set up so it incentivizes people to move ahead to economic self-sufficiency but yet is is an adequate safety net for people who are truly incapable of supporting themselves? I don't know the answers to these questions, or if they even have answers. Suggestions anyone?
A few pop into mind. Yes, this is based on anecdotes, but I've seen/heard them from enough fronts (some you would not expect) to feel there is some merit to them. The programs should provide the very basics. No one accepting OPM 'needs' name brand sneakers, fancy cell phones, etc. Maybe we need a government run 'company store' where people exchange their 'script' for basic subsistence level products. And why not require significant hours of community service if they don't have a job (work at the 'company store')? Maybe this would be too tough to administer (but that would create more jobs!), but I think we could move towards that scenario.

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Old 01-09-2011, 12:19 AM   #65
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Of course, there's no finite amount of work that needs to be divided among available workers. Tasks that are not worth hiring people to perform at $10 an hour may make economic sense at $5 per hour. If labor is cheaper, more jobs are created. Also, many of the things created with that cheaper labor will also be cheaper to buy, which helps everyone.

Conversely, when handouts diminish the incentive to work at low wages, the number of available jobs decreases.

I've got 2 inches of snow in my driveway right now. I'd pay someone ten bucks to clear it, but no one's knocking at the door for that work. It's too much trouble. Things are different in much of the world, and as US labor rates decline due to pressure from other countries things will change here. That's too bad, as it will be a sign of decreasing societal wealth.
I said a living wage and intermittent day labor at sub-minimum wages falls far short of that. What does it matter how many more jobs are created, unless they pay enough to live on without government subsidies? People aren't going to get off welfare unless they can support themselves on what they earn—it wouldn't make any economic sense.

Lower pay in this country might make the resulting products cheaper, but unless the cost of labor here goes down to Chinese levels, American-made goods still wouldn't be as cheap as imports, so driving wages down won't "help everyone". Specifically, it won't help the people with jobs created because the price of labor (their labor) has been pushed down to rock bottom. They won't see much of a drop in their basic living expenses for clothing, fuel and food, because a lot of what they'd be buying is imported, and less expensive labor in the US won't affect the prices of imports. But perhaps what you have in mind is not incentivizing people to get off the dole voluntarily, but a unilateral benefit cutoff that would deliberately send wages into free-fall. I hope that's not what you mean. IMO, doing so would move the US toward a society with only rich people and poor people and hardly anyone in between. That's certainly not the sort of country I thought this was supposed to be.
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Old 01-09-2011, 03:56 AM   #66
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is it better to punish a hundred innocent people rather than have one guilty person evade paying for their crime, or would it be preferable to let a hundred guilty people go free lest one innocent person suffer for a crime s/he didn't commit?
It shouldn't be an either/or. We should strive to have the best systems in place to help those who need it, and keep fraud at a minimum. It'll never be perfect, but we need to rigorously evaluate these programs. Remember, we have limited resources to provide safety nets - the fraudulent ones are stealing from those who need it. They are part of the problem.
Agreed it isn't a pure either/or. What I don't know is whether it is possible to reduce fraud any further and still have all the intended recipients receive benefits. The current system may be far from perfect but maybe it is in fact the best that can be done, unless the goal is to reduce fraud to the minimum possible even if that results in denying benefits to some of the people for whom they were really intended.

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"birth lottery"...personal choice
There have been long threads on this, and I've seen little common ground from the two sides (and the pig settles it). IMO, rather than go down that road again, we ought to review the concept that the article in th OP presents - Do some of these programs provide, or are so easily scammed, that there is too little incentive to reduce their use of OPM?
Well I don't want to draw down the wrath of the pig, so I won't say any more about the birth lottery. I'm grateful that my exposure to these sorts of programs was relatively brief (although it seemed endless at the time) and many years ago. I do remember that I had to demonstrate, by coming into the Unemployment office with a list of jobs I had applied for, that I was actively looking for work, in order to continue getting unemployment benefits. I don't know if that's still required. Maybe things have gotten more lenient since the 1980's. I also remember it was the most miserable two years of my life so far. If having to experience repeated rejection by potential employers plus being treated like dirt by the people in the "Employment Security" office (maybe I was just projecting the fact that I felt like dirt onto them) in return for barely enough money to live on doesn't incentivize people to get off of unemployment I don't know what would. I certainly wanted out as fast as possible.

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I agree that should be the goal, but how exactly do we go about doing it? It's all very well to say, "no money without work"
I think you are missing the point. If the govt provides for these people at a relatively high level, some will demand wages that exceed that level before they go to work. So the business might have low-level jobs at 1.5x min wage, but they can't pay 3x or 4x min wage for that work (they will go offshore). It's not a matter of 'forcing' business to hire, it's a matter of creating an environment for workers and business to come together to produce.
What I meant was, what if private sector employers have no job openings available at all? That was my experience in the 80's—matters never progressed as far as negotiating over wages, there was essentially no work to be had in my field. When I finally did find a job it was doing something else, and I've never worked again in the profession I got my degree in. Right now unemployment is officially standing at nearly 10%, and if people working part time because they can't find full time jobs plus those who have become discouraged and stopped looking were added it would probably be well into the double digits. Where is a low-skilled worker with no employment background going to find any job at any wage in this environment, when well-qualified people with good work histories are hitting a brick wall in their job search? That is what I meant by you can't force employers to hire.

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How can a system be set up so it incentivizes people to move ahead to economic self-sufficiency but yet is is an adequate safety net for people who are truly incapable of supporting themselves? I don't know the answers to these questions, or if they even have answers. Suggestions anyone?
A few pop into mind. Yes, this is based on anecdotes, but I've seen/heard them from enough fronts (some you would not expect) to feel there is some merit to them. The programs should provide the very basics. No one accepting OPM 'needs' name brand sneakers, fancy cell phones, etc. Maybe we need a government run 'company store' where people exchange their 'script' for basic subsistence level products. And why not require significant hours of community service if they don't have a job (work at the 'company store')? Maybe this would be too tough to administer (but that would create more jobs!), but I think we could move towards that scenario.

-ERD50
I hear these stories about fancy sneakers and the like too. Are these run of the mill welfare recipients or are they extreme and atypical examples? What percentage of the total number do they make up? And where exactly is the money to pay for these thing coming from? Is it actually public money, or are the goodies coming from somewhere/someone else, as in the case of tryan's tenant? I don't think it's possible to say, because this person has nice shoes or a pretty ring, they must be scamming the system. Maybe the shoes were on sale, or from Goodwill, the ring from a boyfriend.

Maybe your "company store" idea, or something like it, would work. It could also go horribly wrong, and turn into something like a Victorian workhouse from one of Charles Dickens' books—forced labor on a starvation diet. As for requiring "community service", if you mean people would have to do some work to get their welfare check or other benefits, that's more or less what I meant by "the government becoming the employer of last resort", but once people are doing necessary work and getting paid for it IMO they are no longer welfare recipients but employees. I don't know if even this much could be done without running afoul of the 13th amendment. Working in the "company store" might be a way to segue into regular retail sales (I think this is what Goodwill aims to do with the people that work in their stores). In Seattle, there is a program called, IIRC, "Fare start", which introduces people into restaurant work. I don't think it's a government agency, but it could be. The tricky part would be to arrange all the programs or benefits so they don't work at cross purposes to each other, and also so that as a person moves toward greater economic self-sufficiency, the amount of benefit they lose is always smaller than whatever the increase was in their wages. If earning more from employment ever results in a net decrease in income (which I think may sometimes be the case under current systems) that's penalizing someone who is moving in the right direction, and to be avoided like the plague.
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Old 01-09-2011, 07:09 AM   #67
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People aren't going to get off welfare unless they can support themselves on what they earn—it wouldn't make any economic sense.
I think you've made the choice too binary--there's no set income level at which people are suddenly able to support themselves. There are various levels of comfort and convenience. The "acceptable" level has shifted upward over the past 50 years due to the (very flukish and not-to-be-repeated) post war wealth growth in the US. Before the war, people (rich and poor alike) spent a much higher percentage of their income on food than we do today. People did what they needed to do to get by--it was very common for people to rent out rooms in their homes (we see that far less frequently today, it seems to me), and extended families lived together in much smaller homes than we have today. Vacations were more rare, shorter, and more local. That's the way much of the world still lives, and that's where we're headed, too, as we compete in the global marketplace and that competition drives down wages here (and improves them in some very poor areas--this whole thing is a net positive for the world). There are no laws (wage supports/minimum wage laws, tariffs, taxes, etc) that can prevent this, but some can accelerate it. So, in this environment, I'll turn your implicit question around: is it right for the government to provide a standard of living to people who are not working that is higher than the standard of living of someone who works? If so, then we're saying it's okay to take taxes paid by a poor family and give the money to a more wealthy welfare recipient. Aside from basic fairness issues, I think we can see what behavior that will incentivize.
Remember, too, that in years past private charities played a bigger role and government played a smaller one in providing support for the poor. That model has a lot going for it.
Still, government, through the forced contributions of citizens, can be used to help able-bodied people. I'd suggest it's better if this help encouraged them to work rather than discouraged it. Actually, the example in the OP highlights but also distorts the actual picture (as examples often do). A non-disabled person with no children would enjoy far lower levels of assistance than that shown in the illustration, it's the kids that drive the numbers up. That brings up the whole question of govt incentives to have children out of wedlock--no reasoned analysis by the recipient would induce them to do this (the costs of raising a child far exceed the govt benefits), but I think many of these people aren't reasoning clearly.
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Old 01-09-2011, 11:05 AM   #68
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That brings up the whole question of govt incentives to have children out of wedlock--no reasoned analysis by the recipient would induce them to do this (the costs of raising a child far exceed the govt benefits), but I think many of these people aren't reasoning clearly.
Let's turn this around. Who has more powerful incentives to see to it that she does not bear a child- some 24 year old law student with an IQ of 115, or some 24 year old welfare client with an IQ of 115?

Ha
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Old 01-09-2011, 12:14 PM   #69
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Old 01-09-2011, 12:41 PM   #70
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Regarding hitting the birth/brain lottery. I have known plenty of "dumb" people. Worked for, with, and at times qualified to the rank myself. Wealth and security isn't about smart, it is about frugal, honest, and hard work.
I see a lot more corporate welfare, and welfare for the wealthy, than poor. Every tax break stemming from campaign donations certainly qualifies. Take our example of only paying long term capital gains of 20% while blue collar Joe pays 33%. What is the end tax rate on the tax-free muni's? How much of our investments returns come from the incentives that are given to business.
There are many ways to use street smarts and abuse the system. I don't excuse welfare queens but I am not so naive to not see the other abuses that cost a heck of a lot more.
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Old 01-09-2011, 12:55 PM   #71
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Take our example of only paying long term capital gains of 20% while blue collar Joe pays 33%.
Please explain.
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Old 01-09-2011, 01:44 PM   #72
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Simply put, my wages are taxed at a higher rate than my investments. Why is my labor taxed high, while my passive income low? I am in a middle tax state. My labor taxed self is subsidizing my investment self. The 33% is my last-dollar-earned taxes. I am middle class, but discovering that ca$h IS king. The 70% "number" that is quoted as the percentage of retirement income needed to equal work wages is in my own case, largely from tax advantages.
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Old 01-09-2011, 01:51 PM   #73
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Simply put, my wages are taxed at a higher rate than my investments. Why is my labor taxed high, while my passive income low? I am in a middle tax state. My labor taxed self is subsidizing my investment self. The 33% is my last-dollar-earned taxes
Because if your investment income is based on dividends, then it is taxed twice. Once when the corporation earns it, then again when it is paid to the owners (shareholders).
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Old 01-09-2011, 02:03 PM   #74
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Agreed it isn't a pure either/or. What I don't know is whether it is possible to reduce fraud any further and still have all the intended recipients receive benefits.
Well, we can't know for certain, but I think it is reasonable to assume things could be done significantly better than they are. I haven't met too many big programs (public or private) that couldn't be improved.

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What I meant was, what if private sector employers have no job openings available at all? That was my experience in the 80's
You are back to either/or/binary thinking. If we are talking about lower wage positions, clearly a business could hire 10 people at $15/hr, or 15 people at $10/hr (I'm keeping it simplistic - ignoring benefits, hiring costs, etc). If it is hard to get people to take the job at $10/hr, they will probably end up hiring fewer of them at $15/hr. So there are 5 jobs that didn't exist before. Just like you may select chicken over beef at the grocery store, businesses do have options (choose not to expand, automate, go offshore, move their $ into a less labor-intensive business, etc). Happens all the time. I've lived it.


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I hear these stories about fancy sneakers and the like too. Are these run of the mill welfare recipients or are they extreme and atypical examples?
Allow me to answer this more fully later, when I have more time. Yes, my info is anecdotal/illustrative and therefore weak. However, if I give you the full background, I think you'll get a sense of why I weight it as I do. I'm not sure how we could get data on it, but maybe we can. I want to choose my words carefully on this.

And I want to say Thanks! for the civil discussion.


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This appears to me to be a 'straw man'. Maybe I missed it, but the only posts I saw with this kind of thinking were from the side trying to defend these programs as they are, and they attempted to put those words in the other side's mouth (i.e. "People are actually claiming that a minimum wage worker wouldn't take a $60k job if offered? Seriously?"). If I missed it, please quote the posts that gave this impression from those looking for change.

Two other observations:

1) It seems that one side here could be viewed as defending the status quo, and resistant to change/reform. I've been told that was bad with regards to other things?

2) I never noticed that the OPM acronym for "Other People's Money", when pronounced out loud, sounds like Oh-Pea-Em, which sounds like Opium. Just coincidence I guess, but I do think that Other People's Money could be addictive in it's own way. (edit/add: A google of the terms brought 4,400 hits. so I guess I'm just slow)

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Old 01-09-2011, 02:03 PM   #75
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Let's turn this around. Who has more powerful incentives to see to it that she does not bear a child- some 24 year old law student with an IQ of 115, or some 24 year old welfare client with an IQ of 115?

Ha
A valid point. I'd argue that in either case "Daddy" should be paying some bills. If Mom doesn't want to press for child support, then that's her business (if she's awarded child support, she should get the full support of the government in her claims against him). But if Mom gets a nickel in government assistance ("welfare," food stamps, EITC, etc) because of his kid, now it's everyone's business to recover damages from Daddy. If Daddy's broke, he can work on the government farm nights and weekends to help pay us back. Momma's raising the kid, we're paying for much of it, he shouldn't be out carousing with his pals without consequence.

Maybe this will encourage some thought during amorous moments.
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Old 01-09-2011, 02:36 PM   #76
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A valid point. I'd argue that in either case "Daddy" should be paying some bills. If Mom doesn't want to press for child support, then that's her business (if she's awarded child support, she should get the full support of the government in her claims against him). But if Mom gets a nickel in government assistance ("welfare," food stamps, EITC, etc) because of his kid, now it's everyone's business to recover damages from Daddy. If Daddy's broke, he can work on the government farm nights and weekends to help pay us back.
I think what some baby mamas do with deadbeat daddies is to not list them on the birth certificate, and if pressed for a name, they say "I don't know, some dude I met at a club and had a one night stand with. There were so many guys during that crazy and tempestuous time in my life that I can't recall the details." Guy is off the hook from the State's collection efforts, and he may still send the occasional birthday present and $100 here and there (when his scratch off cards hit pay dirt).
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Old 01-09-2011, 02:42 PM   #77
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Originally Posted by eridanus View Post
It's obviously better to do it now if you're making a purely economically rational decision.
I have stated in this thread previously that some (most??) of these government handout programs are means tested. Since I already have a substantial net worth, I would not qualify for most of these benefits today. And I'm married to my children's mother, so I can't do the baby-mama-gets-welfare-and-I-work-for-the-luxuries-while-clandestinely-living-with-my-baby-mama. Besides, that would be fraud, something I don't want to be a party to.

Once I'm ER'd, my adjusted gross income will be low enough to qualify for low five figure government handouts every year. Assuming they remain non-means tested. DW and I may decide to both go to part time work, and/or have one of us leave the workforce to ESR AND get some government bennies.
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Old 01-09-2011, 03:14 PM   #78
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Originally Posted by FUEGO View Post
Once I'm ER'd, my adjusted gross income will be low enough to qualify for low five figure government handouts every year. Assuming they remain non-means tested. DW and I may decide to both go to part time work, and/or have one of us leave the workforce to ESR AND get some government bennies.
Fuego, here's a handy guide to make sure you don't leave any cheese on the table...
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Old 01-09-2011, 03:56 PM   #79
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Lots of discussion so far, but I couldn't find any references to an obvious error in the "calculation". He has Medicaid/CHIP at $16,500 for a family with one adult and three children. But he doesn't have any group health insurance subsidy for the $60,000 job.
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Old 01-09-2011, 04:12 PM   #80
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Originally Posted by Independent View Post
Lots of discussion so far, but I couldn't find any references to an obvious error in the "calculation". He has Medicaid/CHIP at $16,500 for a family with one adult and three children. But he doesn't have any group health insurance subsidy for the $60,000 job.
Do some research on that - see below. The article mentions 177M covered - that probably includes dependents as there is about 100M workers in the USA.
And we know that not all 100M are covered so the workers with coverage is lower than the percentages.


Rise in Cost of Employer-Paid Health Insurance Slows - washingtonpost.com

The percentage of people covered by employer-based health insurance fell to 59.7 percent in 2006, down from 60.2 percent in 2005. It was 64.2 percent in 2000.
About 177 million people had employer-based coverage last year, census figures show. That is 2 million fewer than at the turn of the century, even though the overall population has been increasing.


HEALTH INSURANCE COVERAGE
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