It’s not Welfare, It’s Production Demand Subsidy

Like Dave Johnson and others have said, rich people don’t create jobs because they have surplus money; they create jobs because they see added demand for their goods or services. If they get more money, but demand is stagnant, why create more jobs? They’re not running a charity. They will be doing fine with the jobs already on the books!

Actually, government entitlement payments, such as Food Stamps and Medicaid, help to create added demand for their goods and services. So do government insurance and annuity payments, like Medicare, Social Security, and unemployment benefits.

But Republicans hate the idea of entitlement payments and government insurance and annuities, because that means the government is giving money to people who are not producing. Even if the non-producers need it to survive, the thought galls them. At the same time, Republicans love the idea of the government giving money to subsidize producers. Even if the producers are don’t need it to survive, it is justified in the minds of Republicans. The subsidies to oil companies and agribusiness farms come to mind.

So here is a thought: maybe Republicans will accept Progressive programs if they are presented from the point of view of the producers of goods and services. We could say, for example:

Medicare and Medicaid = “Patient Provider Subsidies”
and
Food Stamps, Unemployment and Social Security = “Production Demand Subsidies”

Do you see the difference? The new phrase shows that the real concern is for the welfare of the providers, not the unproductive elderly, disabled, jobless and poor.

Ronald Reagan used this principle back in 1982. He was persuaded by advisors that the country’s roads and bridges needed government investment, and the best way to do that was by increasing the Federal gasoline tax. But he couldn’t simply say that he was imposing a “gas tax increase”. Politically [and perhaps psychologically], he had to call it a “user fee” increase.

So, let’s take that a step further. We could call taxes “Homeland Security insurance fees.” It’s certainly true that the government needs tax revenue to insure the security of country, in its broadest sense -- militarily, economically, socially, etc. And what happens in any system of insurance when you have more assets to insure? You pay more than those who have fewer assets to insure. Thus, your “HSI” fees will by rights increase as the value of your assets increase. And when the costs of insuring the security of the country go up, your “HSI” fees will also have to go up.

Republicans understand the power of wording. They use it all the time, in the service of producers. Maybe if we speak their language from their point of view, we can get some action out of this Congress.

A Republic AND a Democracy!

When I first saw Conservative bumperstickers shouting, “A Republic, Not a Democracy!,” I could not understand what the fuss was about. Were they saying that Democracy was bad? Impossible! Ronald Reagan reportedly said that “Democracy is worth dying for, because it's the most deeply honorable form of government ever devised by man.” Were they saying that the USA was not a democracy? George W. Bush would disagree. He once said that Philadelphia was “the city where America's democracy was born.”

To understand the slogan, I had to survey the Conservative blogosphere. There I discovered that the slogan was derived from two propositions: that a “Republic” is materially different from a “Democracy;” and that the delegates to the U.S. Constitutional Convention had sought to create a “Republic,” as opposed to a “Democracy.”

The first proposition is said to be a matter of definition. A “Democracy” is “a government in which the supreme power is vested in the people and exercised by them directly or indirectly through a system of representation, usually involving periodically held free elections.” A “Republic” is “a government in which supreme power resides in a body of citizens entitled to vote and is exercised by elected officers and representatives responsible to them and governing according to law.”

I read these definitions and conclude that a Republic is a form of indirect Democracy. But Conservatives read these definitions and conclude that a Democracy is based on the sovereignty of the people collectively, whereas a Republic is based on the sovereignty of individual citizens. Put another way, Conservatives argue that a government in which “the people” exercise power through elected representatives is materially different from a government in which “a body of citizens entitled to vote” exercises power through elected representatives. I think they are ignoring the fact that, in a Democracy, “the people” in whom supreme power resides amounts to the “body of citizens entitled to vote.” No vote, no power. That is why American women demanded the right to vote. That is why Southern Whites created laws to disenfranchise non-White voters.

As for the second proposition, the delegates to the Constitutional Convention sought to create a “Republic,” as opposed to a “Democracy,” on the basis of practicality. Delegate James Madison explained that, “in a democracy, the people meet and exercise the Government in person; in a republic, they assemble and administer it by their representatives and agents.” It was based on this definition of "Democracy" that he argued in favor of a Republic, because only a small territory would permit remote citizens to assemble and participate directly in their government. In the end, however, Delegate James Wilson declared that he would describe the Constitution thus: “In its principles, Sir, it is purely democratical....”

I conclude that Conservatives are bellowing “A Republic, not a Democracy!” simply because they refuse to acknowledge responsibility for the American people collectively. Probably because their fellow Americans include Blacks, Hispanics, homosexuals, liberals, Democrats, Muslims, atheists, intellectuals and other people they hate. Personally, I don’t care if they hate me. But don’t say the Constitution justifies Conservative policies of hatred and privilege.

Happy 4th of July, fellow democrats!

Alex Budarin