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]

Taking the bull by the horns - Bart. LCCN2010645511

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,

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

Antitrust Laws

Monopolization runs counter to laws passed by Congress such as the 1890 Sherman Anti-Trust Act, 1914 Clayton Antitrust Act, and 1887 Interstate Commerce Act. Past Republican Presidents such as Teddy Roosevelt, William Howard Taft, Benjamin Harrison, and Grover Cleveland all opposed monopolization in favor of protecting small businesses and market competition.

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.

Land Purchase

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.

Interest Prohibition for Poverty Line

There should be a prohibition on charging the poor interest, with poor defined as those below the poverty line, consistent with Biblical teachings in Exodus 22:25-27; Leviticus 25:35-37; and Deuteronomy 23:19-20.

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.

Feasts

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

Requirement to Work

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

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.

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

Unjust Usury

Nonetheless, the Bible repeatedly condemns unfair lending to the poor specifically, 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.

Usury, Charging the Poor Interest

The following verses show that, while charging interest in general is not wrong, charging it to the poor specifically is. It should further be pointed out that, in Israel at the time, such a commandment applied specifically to Israelite poor, not all those who were poor (cp. Deuteronomy 23:20).

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.