Welfare and Usury

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American History

Welfare

Welfare is a concept seen from the U.S. Constitution itself, which specifically authorizes Congress in Article 1, Section 8 to "lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States." However, the current system of government handouts is a recent invention. What the U.S. government did in the past was allow settlers to declare land of their own under Homesteading Acts, which they were then responsible for settling and caring for. The Republican Party advocated for public works since the time of Lincoln, government-funded work programs to increase employment. For example, in the Republican Party Platform of 1860, the GOP called for spending on river and harbor improvements as well as a transcontinental railroad.[1]

Even by the time of Franklin D. Roosevelt, whose administration pioneered what would become today's wide-reaching welfare system, public works were by no means a government giveaway. FDR implemented public works programs, paying millions of Americans to do government jobs such as digging ditches, repairing roads and bridges, cleaning up public buildings, planting trees/conservation, teaching public seminars, and painting murals. While Social Security has become a massive drain on the Treasury, when FDR created it it was actually intended as a government fundraising measure. Social Security originally gave money only to those who lived longer than average (at the time life expectancy was 62) so for over half a century the program continued to bring in more funds than it spent. FDR, however, did not foresee how lifespan would increase, and today the U.S. government is paying for 18 more years of life under Social Security than when the program was designed.

Usury

The Republican Party has always been pro-business. The 1900 Republican Party Platform, for example, called for a Department of Commerce (the Democrat Platform that year called instead for a Department of Labor), the gold standard, military spending, and civil rights reforms.[2] The Republican Party Platform of 1860 similarly called for tariffs to protect U.S. business, spending reduction, civil rights reforms, and business-friendly policies. The Democrat Party Platform of 1856, by contrast, criticized Republican associations with banks and business, called on Congress to protect slavery, and expressed a desire for "free seas and progressive free trade throughout the world."[3]

However, that did not stop the early Republican Party from breaking up big businesses to protect small businesses, or what was known at the time as trustbusting. The Republican Party led the way in stopping monopolization to protect the vital aspect of market competition that ensures greater economic growth, higher employment, and equal and fair opportunity for small businesses. For example:

  • Republican Presidents Teddy Roosevelt (1901-1909) and William Howard Taft (1909-1913) were perhaps best known for their practice of trustbusting, as they broke up numerous megacorps, including those in the banking, steel, and railroad industries.
  • Even earlier, Republicans in Congress as well as President Benjamin Harrison (1889-1893) passed the Sherman Antitrust Act of 1890, which would prove the tool which Roosevelt and Taft would later use to stop monopolies. This followed after passage of the Interstate Commerce Act of 1887 by a Republican Congress and President Grover Cleveland (1885-1889 and 1893-1897).

Today, CEO pay has grown far above historical levels. Over the past 30 years CEO pay has been growing 127 times faster than pay of the average worker.[4] CEO pay relative to the average worker was 35:1 in 1978 and by 2000 it had risen to 300:1, an 800% increase in just 22 years. In 2010, the rate was 343:1.[5] In fact, 25 of the top 100 highest-paid CEOs received more money than their company paid in federal income taxes.[6]

Today 80% of Americans live on just 3% of America’s land. According to research by Edward Wolff, the wealthiest 1% of Americans own 40% of the nation’s non-home real estate, and the wealthiest 10% of Americans own 82%. As reported by Christopher Ingraham, “the 100 largest landowners have holdings of 40.2 million acres, an increase of nearly 50 percent. Their holdings are equivalent in area to the entirety of New England, minus Vermont.”[7]

Solutions

Welfare

Welfare programs should be work-contingent (i.e. public works based), so that programs are self-supporting as much as possible, similar to those used by FDR. As the Apostle Paul states in 2 Thessalonians 3:10, if someone refuses to work they should not eat. Furthermore, public works programs should be labor intensive to create jobs as effectively as possible per dollar spent.

As seen from a 2007 report by the University of Massachusetts’ Institute for Policy Studies (Pollin and Garrett-Peltier) the following numbers of jobs and total wages/benefits were created in each government sector per $1 billion of federal spending:

  • Tax Cuts for Personal Consumption: 10, 779 jobs, $504.6 million total wages
  • Defense: 8,555 jobs, $564.5 million total wages
  • Construction/Infrastructure: 12,804 jobs, $693.7 million total wages
  • Health Care: 12,883 jobs, $730.1 million total wages
  • Mass Transit: 19,795 jobs, $880.1 million
  • Education: 17,687 jobs, $1,309.3 million

As Garrett and Peltier conclude,

“How can spending on education generate both higher average wages as well as more new jobs per $1 billion in spending? The answer is straightforward. For one thing, the high average wage reflects the fact that a large proportion of people in the sector operate with relatively high credentials and skills, and their incomes reflect this. In addition, education is a relatively labor-intensive industry. This means that, compared with the other industries we are examining, for every $1 billion in new spending in education, proportionally more money is spent on hiring new people into the industry and relatively less is spent on supplies, equipment, buildings.”[8]

Obama's Stimulus and related Democratic spending was designed to enrich a few corrupt Democrats, not create jobs for working Americans. In the words of the Wall Street Journal, the Stimulus was "a 40-year wish list... that manages to spend money on just about every pent-up Democratic proposal of the last 40 years. We've looked it over, and even we can't quite believe it. There's $1 billion for Amtrak, the federal railroad that hasn't turned a profit in 40 years; $2 billion for child-care subsidies; $50 million for that great engine of job creation, the National Endowment for the Arts; $400 million for global-warming research and another $2.4 billion for carbon-capture demonstration projects. There's even $650 million on top of the billions already doled out to pay for digital TV conversion coupons."[9]

Usury

Ultimately, monopolization of land or wealth, as with business, endangers the market and overall prosperity. If all the wealth is concentrated in the hands of an ever diminishing few than the best and brightest cannot contribute to the economy, and small businesses which should grow to bring new products and ideas are prevented from ever starting. Competition is what makes the free market work, which is why monopolization is so dangerous. When there are more businesses competing, there will be more employment, more prosperity, and more innovation.

As such, those who don't own land should be allowed to purchase an acre of undeveloped land from those who have 100 acres or more for $1,000, and from those who have 1,000 acres or more for $500. Furthermore, caps on CEO pay at publicly-traded companies in relation to company earnings are needed to restrain CEO pay to historical levels (perhaps on average 50:1 relative to the average worker). Any equation should be based relative to company earnings so that higher-earning companies can pay their CEOs more. Furthermore, privately-traded companies should be able to pay their CEOs as they please, since the CEO founded the company and used their own money to invest in start-up costs and employee hiring; as opposed to publicly-traded companies where CEOs appoint a Board of Directors that they can coerce into paying them out of shareholder funds.

The Biblical View

For a discussion on wealth in general, see Psalms 112:1.

Support for Welfare

Fields

The Bible in the Old Testament actually supports a form of welfare. Farmers were commanded to only harvest their fields once, and leave a portion for the poor, namely widows, orphans, and immigrants.

Leviticus 19:9-10 And when ye reap the harvest of your land, thou shalt not wholly reap the corners of thy field, neither shalt thou gather the gleanings of thy harvest. And thou shalt not glean thy vineyard, neither shalt thou gather every grape of thy vineyard; thou shalt leave them for the poor and stranger: I am the Lord your God.

Leviticus 23:22 And when ye reap the harvest of your land, thou shalt not make clean riddance of the corners of thy field when thou reapest, neither shalt thou gather any gleaning of thy harvest: thou shalt leave them unto the poor, and to the stranger: I am the Lord your God.

Deuteronomy 24:19-22 When thou cuttest down thine harvest in thy field, and hast forgot a sheaf in the field, thou shalt not go again to fetch it: it shall be for the stranger, for the fatherless, and for the widow: that the Lord thy God may bless thee in all the work of thine hands. When thou beatest thine olive tree, thou shalt not go over the boughs again: it shall be for the stranger, for the fatherless, and for the widow. When thou gatherest the grapes of thy vineyard, thou shalt not glean it afterward: it shall be for the stranger, for the fatherless, and for the widow. And thou shalt remember that thou wast a bondman in the land of Egypt: therefore I command thee to do this thing.

Feasts

There was also another commandment to feed the poor directly at certain times, most specifically 3-year intervals.

Deuteronomy 14:28-29 At the end of three years thou shalt bring forth all the tithe of thine increase the same year, and shalt lay it up within thy gates: And the Levite, (because he hath no part nor inheritance with thee,) and the stranger, and the fatherless, and the widow, which are within thy gates, shall come, and shall eat and be satisfied; that the Lord thy God may bless thee in all the work of thine hand which thou doest.

Deuteronomy 16:10-11 And thou shalt keep the feast of weeks unto the Lord thy God with a tribute of a freewill offering of thine hand, which thou shalt give unto the Lord thy God, according as the Lord thy God hath blessed thee: And thou shalt rejoice before the Lord thy God, thou, and thy son, and thy daughter, and thy manservant, and thy maidservant, and the Levite that is within thy gates, and the stranger, and the fatherless, and the widow, that are among you, in the place which the Lord thy God hath chosen to place his name there.

Deuteronomy 26:12-13 When thou hast made an end of tithing all the tithes of thine increase the third year, which is the year of tithing, and hast given it unto the Levite, the stranger, the fatherless, and the widow, that they may eat within thy gates, and be filled; Then thou shalt say before the Lord thy God, I have brought away the hallowed things out of mine house, and also have given them unto the Levite, and unto the stranger, to the fatherless, and to the widow, according to all thy commandments which thou hast commanded me: I have not transgressed thy commandments, neither have I forgotten them.

Requirement to Work

The Bible did not condone giving to those who refused to work as clarified by the Apostle Paul:

2 Thessalonians 3:10: For even when we were with you, this we commanded you, that if any would not work, neither should he eat.

Interest/Usury

Jesus' Parable

Jesus in the New Testament used a parable describing Himself as a Lord who expects His servants to invest what they have wisely so that He will receive back what He provided them with interest.

Matthew 25:26-28 His lord answered and said unto him, Thou wicked and slothful servant, thou knewest that I reap where I sowed not, and gather where I have not strawed: Thou oughtest therefore to have put my money to the exchangers, and then at my coming I should have received mine own with usury. Take therefore the talent from him, and give it unto him which hath ten talents.

Luke 19:22-23 And he saith unto him, Out of thine own mouth will I judge thee, thou wicked servant. Thou knewest that I was an austere man, taking up that I laid not down, and reaping that I did not sow: Wherefore then gavest not thou my money into the bank, that at my coming I might have required mine own with usury?

Therefore it seems that not all interest is unjust, Biblically. As Adam Smith observes in "The Wealth of Nations":

The lowest ordinary rate of interest must, in the same manner, be something more than sufficient to compensate the occasional losses to which lending, even with tolerable prudence, is exposed. Were it not more, charity or friendship could be the only motives for lending.[10]

Unjust Usury

Nonetheless, the Bible repeatedly condemns unfair lending to the poor, not only in the Old Testament but the New Testament as well. Clearly there is a degree of lending that is unjust and abhorrent to God.

Nehemiah 5:5-11 And there was a great cry of the people and of their wives against their brethren the Jews. For there were that said, We, our sons, and our daughters, are many: therefore we take up corn for them, that we may eat, and live. Some also there were that said, We have mortgaged our lands, vineyards, and houses, that we might buy corn, because of the dearth. There were also that said, We have borrowed money for the king's tribute, and that upon our lands and vineyards. Yet now our flesh is as the flesh of our brethren, our children as their children: and, lo, we bring into bondage our sons and our daughters to be servants, and some of our daughters are brought unto bondage already: neither is it in our power to redeem them; for other men have our lands and vineyards. And I was very angry when I heard their cry and these words. Then I consulted with myself, and I rebuked the nobles, and the rulers, and said unto them, Ye exact usury, every one of his brother. And I set a great assembly against them. And I said unto them, We after our ability have redeemed our brethren the Jews, which were sold unto the heathen; and will ye even sell your brethren? or shall they be sold unto us? Then held they their peace, and found nothing to answer. Also I said, It is not good that ye do: ought ye not to walk in the fear of our God because of the reproach of the heathen our enemies? I likewise, and my brethren, and my servants, might exact of them money and corn: I pray you, let us leave off this usury. Restore, I pray you, to them, even this day, their lands, their vineyards, their oliveyards, and their houses, also the hundredth part of the money, and of the corn, the wine, and the oil, that ye exact of them.

Psalm 15:5: He that putteth not out his money to usury, nor taketh reward against the innocent. He that doeth these things shall never be moved.

Proverbs 28:8: He that by usury and unjust gain increaseth his substance, he shall gather it for him that will pity the poor.

Ezekiel 18:13: Hath given forth upon usury, and hath taken increase: shall he then live? he shall not live: he hath done all these abominations; he shall surely die; his blood shall be upon him.

Ezekiel 22:12: In thee have they taken gifts to shed blood; thou hast taken usury and increase, and thou hast greedily gained of thy neighbours by extortion, and hast forgotten me, saith the Lord God.

James 5:5-7 Go to now, ye rich men, weep and howl for your miseries that shall come upon you. Your riches are corrupted, and your garments are motheaten. Your gold and silver is cankered; and the rust of them shall be a witness against you, and shall eat your flesh as it were fire. Ye have heaped treasure together for the last days. Behold, the hire of the labourers who have reaped down your fields, which is of you kept back by fraud, crieth: and the cries of them which have reaped are entered into the ears of the Lord of sabaoth. Ye have lived in pleasure on the earth, and been wanton; ye have nourished your hearts, as in a day of slaughter. Ye have condemned and killed the just; and he doth not resist you. Be patient therefore, brethren, unto the coming of the Lord. Behold, the husbandman waiteth for the precious fruit of the earth, and hath long patience for it, until he receive the early and latter rain.

References

  1. Peters, G. & Wooley, J.T. (1860, June 2). “Republican Party Platforms: Republican Party Platform of 1860.” The American Presidency Project, University of California, Santa Barbara.
  2. Peters, G. & Wooley, J.T. (1900, June 19). “Republican Party Platforms: Republican Party Platform of 1900.” The American Presidency Project, University of California, Santa Barbara.
    Peters, G. & Wooley, J.T. (1900, July 4). “Democratic Party Platforms: Democratic Party Platform of 1900.” The American Presidency Project, University of California, Santa Barbara.
  3. Peters, G. & Wooley, J.T. (1860, June 2). “Republican Party Platforms: Republican Party Platform of 1860.” The American Presidency Project, University of California, Santa Barbara.
    Peters, G. & Wooley, J.T. (1856, June 2). “Democratic Party Platforms: Democratic Party Platform of 1856.” The American Presidency Project, University of California, Santa Barbara.
  4. Kavoussi, B. (2012, May 2). “CEO Pay Grew 127 Times Faster Than Worker Pay Over Past 30 Years: Study.” The Huffington Post.
  5. Liberto, J. (2011, April 20). “CEOs Earn 343 Times More Than Typical Workers.” CNN Money.
  6. Anderson, S. et. al. (2011, August 31). “Executive Excess, 2011: The Massive CEO Rewards for Tax Dodging.” Institute for Policy Studies.
  7. Ingraham, C. (2017, December 21). “American Land Barons: 100 Wealthy Families Now Own Nearly as Much Land as that of New England.” Washington Post.
  8. Pollin, R. & Garrett-Peltier, H. (2007, October). “The U.S. Employment Effects of Military and Domestic Spending Priorities.” pg. 5. Institute for Policy Studies. Political Economy Research Institute. University of Massachusetts, Amherst.
  9. (2009, January 28). “A 40-Year Wish List.” The Wall Street Journal.
  10. Smith, Adam. "The Wealth of Nations. Volume 1. 9.19.