The University News » Forum, Opinion » Obama-Romney video wars: Mitt Romney makes a valid point about the 47 percent

Obama-Romney video wars: Mitt Romney makes a valid point about the 47 percent

September 24th, 2012 | 4 Comments

A video of Mitt Romney stating 47 percent of the country will automatically vote for President Obama, because they are dependent on government aid, was released last Monday.

This percentage refers to the share of Americans who do not pay federal income taxes, many of whom receive government financial assistance.

The video was secretly taped at a fundraiser dinner party in May, attended by contributors to his campaign.  He was clearly speaking to please them.

The video went viral, and Romney has been under public attack since then.  The Republican Party retaliated by sharing a video of President Obama speaking at Loyola University in 1998 about how he agrees with redistribution of wealth from the rich to the poor.

While many college students focus on issues of marriage equality, abortion, financial aid and health care, the real debate this election season is over the role the government should play in our lives.  Romney argues the government should be less intrusive than the status quo under President Obama.

To be honest, I was growing bored of the presidential campaigns.

I debated whether or not I should vote this November, being an average apathetic college student with little interest in politics until the leaked videos highlighted an issue I had been ignoring: government dependency.

While it is true Romney misspoke by lumping all 47 percent of people with no federal tax burden together, it brought greater public attention to the issue of the spread of money.

While Romney’s statement is still under public scrutiny, Obama seems to be off the hook when he shouldn’t be.

The 1998 video of President Obama highlights his approach to American government.  His 2008 presidential campaign showcased it again with his comments about spreading the wealth around.

Theoretically, redistributing the wealth of the upper class to those in poverty should make the nation more prosperous, but when put in practice (as it has been throughout history in places like Cuba, Eastern Europe and China), it has negative effects.

The redistribution of wealth is a basic principle of modern day socialism.  This country operates on the principle that you work for your money and the money you make is yours to spend however you’d like. This is capitalism.

In a letter to Joseph Milligan, Thomas Jefferson wrote, “To take from one, because it is thought his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to everyone the free exercise of his industry and the fruits acquired by it.”

Recently President Obama removed the Clinton administration’s 1996 work requirement for individuals receiving welfare through the Temporary Assistance for Needy Families (TANF).

With a Congress that would not sign off on President Obama’s work-free TANF program, he performed a bureaucratic maneuver around Congress, giving waivers to states that allows individuals to receive welfare without having to work, even though there are programs designed to help the unemployed find jobs.

Now the taxes the other 53 percent of the population pay can and will be used as easy money for TANF recipients who may or may not have a job.

Instead, we should place importance on the creation of new jobs and wealth, not the redistribution of the wealth an individual already has.  We should fuel the capitalistic U.S. that has been a world powerhouse for centuries.

Four years ago, President Obama promised to decrease unemployment and create jobs. Today, unemployment rates stagnate at more than 8 percent.

Granted, creating jobs is difficult in times of economic hardship, but enabling Americans to stay dependent on the government’s money—the money of others—instead of encouraging employment, needs to stop.

It only hurts our country in the long run.

mshea@unews.com

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Written by Meredith Shea

Filed under: Forum, Opinion · Tags: Mitt Romney, President Obama, Recently President Obama, TANF

4 Responses to "Obama-Romney video wars: Mitt Romney makes a valid point about the 47 percent"

1. dls97b says:

   September 26, 2012 at 12:24 am

   Hello Meredith,

   I think people who don’t understand the intricacies of our tax code might believe Romney. But Romney, as many conservatives do, only talks about federal INCOME tax most of the time.

   As a person who has made good money and a person who has received a $10 paycheck for one hour of work-training during a 2 week period, I can tell you that federal income tax is not the only tax there is.

   First off, on that $10, I paid 62 cents to Social Security and 15 cents to Medicare. Even the poorest of the poor pay 6.2% Social Security and 1.45% Medicare (not Medicaid) on every dollar they earn. That’s 7.65%

   However, when a worker makes $110,100 in a year, then they do not pay any more Social Security tax for that year. That’s only on wages – not on passive income such as investments, etc. So, rich people get a 6.2% pay raise courtesy of the federal government. They also don’t pay any SS or Medicare on personal investments. Remember, most of Romney’s income is from his investments.

   Further, that 7.65% is regressive, as is the state and local sales tax people pay. As is the property tax people pay – if they own property.

   What a regressive tax mean is that if the sales tax a person paid was calculated as a percentage of a person’s income – and not as a percentage of the purchases – a lower-income person’s total annual sales tax would equate to a higher income tax rate.

   Conservatives love to talk about the progressive nature of our federal INCOME tax system. But they never seem to talk much about the very regressive nature of Social Security tax, Medicare tax, sales tax and property tax.

   I’d guess (and would love to see data on this) that a lower-income person who does not pay any INCOME tax still pays a significant portion of his INCOME on the regressive taxes mentioned above.

   Sincerely,

   a tax preparer and an economist wannabe

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2. cdc55 says:

   September 26, 2012 at 10:43 am

   Dear Meredith,

   There are so many facets of your argument that are just plain wrong, but to deal with all of them appropriately would require a thesis length paper. Alas, I will try to hit a few of the worst offenses.

   1.) Where is it stated that 47% of Americans are “dependent”? Should we just take Mitt at his word? More importantly, however, we need to define what dependent means. Does dependent on “Government” (a nice ambiguous term) mean those who recieve Social Security and Medicare, in which case you say to let your grandparents starve and have their ailements untreated (even though they paid into the system)? Or do we better define “dependent” as college students who finance their education with State (like subsidized, i.e. lower tuition, for state residents) and Federal (Pell Grants, Stafford Loans etc) assistance? If that’s the case, then practically none of us can say anything, and if we do we’re foolish.

   2.) If you listened to President Obama’s 1998 speech at Loyola, you should have noticed that he said he believed in redistribution so that everyone has a shot. So really, it sounds like he is talking about equal opportunities for minorities and women! He’s no “modern day socialist”.

   3.) Your notions of capitalism and socialism are bizarre. Capitalism isn’t the system by which we pull ourselves up by our bootstraps. Perhaps the system you describe is more akin to Jefferson’s agrarian ideal (he deplored capitalists), but it isn’t capitalism. Instead, capitalism has many many many forms, all of which are prefaced on the idea that owners of property have privileged status above all others. So basically, if you don’t own property, or can’t sell your labor to a capitalist (like in a recession): YOUR SCREWED.

   4.)Your concept of redistribution is all wrong too. In Maoist China, all rights were taken away, it was feudalism 101. The United States “redistribution” scheme, also called Social Security, Medicare/caid, and Unemployment insurance have been FANTASICALLY successful. Now, unlike before the Great Depression, if you become unemployed you won’t starve!!! YAYYY “Socialism”. Plus, with the advent of that socialist overreach called Medicare, your grandparents might not have to go bankrupt because some capitalist insurance company won’t cover them. What about public education? Score another one for the redistribution team (UMKC is a public institution as well).

   5.) I’ll admit that there are some offenders of the welfare scheme. They suck taxpayer money out of the system and then blame society. No, I’m not talking about single, working mothers. I’m talking about Exon Mobil, GE, Romney- the list goes on and on. They get huge tax subsidies from the government on top of the Bush/Obama tax cuts, and yet, those capitalist heros haven’t gone on huge hiring sprees. In the old days, those subsidies were called Corporate Welfare, and if there is any country with capitalists dependent on the Nanny State, it is America.

   So,before you blame Obama (he has no real power to create jobs-the Government does own industries) about unemployment and dependence, take a long look at the Capitalist Heros and ask them why they’ve been asleep on the job. There are millions of people willing and able to work, and yet they go jobless because of those corporate welfare queens.

   In conclusion, I think if you’re concerned about spending other people’s money, you should pay back your parents with interest, and step away from the dark side of the force and join us progressives on the light side. But, what would I know, I’m just an economics graduate assistant-a ward of the state!

   Thanks,

   Christian – Economics iPhD Student.

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3. Brian Werner says:

   September 26, 2012 at 12:00 pm

   Meredith,

   A few points of contention with the piece “Obama-Romney video wars”.

   1. While Romney may be against using the government to help the poor he has happily supported the conservative nanny-state that uses government programs to distribute income upwards.

   2. As “The Spirit Level” by Wilkinson and Pickett documents with extensive data, countries with higher levels of inequality, such as the United States, do much worse on a host of social indicators such as crime and life expectancy. Countries like Denmark have succeeded using high taxes and generous social benefits, while Japan has been successful by limiting income inequality in the first place.

   3. The government does not need to take money from one person to give it to another. The federal government (and the FED) creates the money so it can choose to give money to welfare recipients (both the poor or the corporate kind) and it doesn’t have to take it from someone else.

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4. Christian Spanberger says:

   September 29, 2012 at 1:22 am

   There are a couple of issues in this piece that I want to address from an economic perspective. I will try to keep these in the order they were raised in the comment and will leave those aside that have already been discussed by my fellow economics students.

   1. Redistributing wealth is the defining feature separating socialism from American capitalism. Redistributing wealth has also been unsuccessful in promoting prosperity throughout history.

   The Republican party has seemingly succeeded in associating every kind of policy designed to help the poor with terms like class warfare and socialism as practiced in the countries mentioned in the comment.
   Now as a starter, I see no reason why we should evaluate redistributive policies only according to socialist countries of present and past times. Non-socialist countries have made extensive use of policies that can be described in this way as well. (In fact, this seems to be what the author of the comment argues against, so I do not understand why she does not just evaluate the success of such policies in the US).
   If we want to evaluate such policies now, we would need to define what we understand by ‘prosperous’. If we narrow our focus solely to economic growth as shown by the change of the gross domestic product (GDP) of a nation, then the answer will be unclear. Ask three economists and you will get five answers. In my opinion, it is likely to have an positive effect as, to put it simply, redistributive policies tend to move income from folks who use a comparatively small amount of income for consumption to people who spend a large portion. Consumption expenditure makes up roughly 70 percent of US GDP, so changes to consumption are of vital importance to economic growth. Additionally, if companies are faced with robust sales, they are likely to be upbeat about the future and will tend to invest more, which is another important part of GDP. Lastly, one might also note that the evolution of large scale redistributive policies in the US is historically associated with a.) getting the US out of the Great Depression and b.) leading to a long period of robust income growth.
   Apart from that, one might add that it has to be asked what constitutes prosperity. If we do not only concentrate on the quite arbitrarily selected measure of economic growth but have a look at social figures as well, one can see that (e.g. Fullbrook 2012) countries with more redistributive policies than the US are healthier, more educated, and have a higher degree of gender equality besides the more obvious effect of more income equality (which, in itself, is a positive thing if we consider negative psychological effects of inequality on individuals (Wilkinson/Pickett 2009).

   2. People are unemployed, because they are lazy. Taking away their welfare benefits will make them more self dependent by working.

   Two things are to be said about this: first, we are currently experiencing the worst economic crisis since the Great Depression. The problem here is certainly not a lack of supply of, but demand for labor. Secondly, the notion that large numbers of people would willingly be content for a prolonged period of time with a lifestyle that is associated with an income in the amount that the US welfare system pays is just beyond me. In fact, the famous Cato Institute studies (e.g. 1995, 2012) purportedly showing that there is no incentive to work is largely negated by the ubiquity of people actually receiving welfare and working. If we want to reduce welfare spending and get people to live dignified lives with stable employment, we need to make sure that employment opportunities associated with incomes sufficient to let people live such a life actually exist. As long as the private sector does not provide these jobs, we might have to look elsewhere.

   3. Whatever income people receive by participating in the economy is the amount that they deserve.

   I am not sure whether the author of the comment actually shares this notion (her application of the Jefferson quote leads me to think that this is indeed the case though), but since this idea has also been a prominent one in the political debate of the past couple of months I am tempted to include it anyway.
   Completely setting aside the issue of power relations within the economy and assuming that the income to the individual forthcoming through the market process is, in fact, the “just” one, there is still the issue of the economic and social conditions you are born into. Mitt Romney did not “build that” all by himself, his career was, to a considerable degree, made possible by his father’s wealth.
   The so often cited ‘American dream’ is, apart from a few chance events, largely a myth. There is hardly any country in the Western hemisphere that has less upward social mobility than the USA (NYT/De Parle, 2012), meaning nothing else than the education and income of your mother and father is an excellent predictor of the education and income of yourself. So if you want to provide every American with equal opportunity at achieving success, there is no way around at least a certain degree of redistribution.

   I think it is important that we as an academic community do not let us get fooled by blatant ideology and instead try to stick to the facts and endeavor to find out why things are how they are and what should or should not be done about it.

   Regards,

   Christian Spanberger

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