Reducing Inequality and Poverty in America - Feldstein, Proj. Syndicate

https://www.project-syndicate.org/commentary/reducing-inequality-in-america-by-martin-feldstein-2016-08?utm_source=Project+Syndicate+Newsletter&utm_campaign=5e8f6bcd07-Stiglitz_Reform_Divorce_Europe_28_8_2016&utm_medium=email&utm_term=0_73bad5b7d8-5e8f6bcd07-93854061

...The United States government now spends more than $600 billion a year on programs to help the poor. That’s about 4% of America’s total GDP. Half of those outlays are for health programs, including Medicaid and the health-insurance subsidies under the 2010 Affordable Care Act (so-called Obamacare). The other half are for a complex range of programs including food stamps, housing subsidies, the Earned Income Tax Credit, and cash relief.

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To put that 4% of GDP in perspective, the federal government’s total revenue from the personal income tax is less than 9% of GDP, implying that nearly half is spent on these means-tested programs. Spending on these programs also exceeds that for defense (3.3% of GDP) and the 3.3% of GDP spent on all other nondefense discretionary programs....

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Many of those who are poor, or would otherwise be poor, are also aided by Social Security benefits for retirees and survivors, and by Medicare for the disabled and those over age 65. Because eligibility for benefits under these programs does not depend on income or wealth, the amounts spent for these programs are not included in outlays targeted at the poor....

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