American Generosity vs Entitlements

cropped-bob-shapiro.jpg   By Bob Shapiro

Many people doubt the generosity of Americans, especially Americans. They don’t want to depend on the generosity of strangers to provide food for the hungry, shelter for the homeless, medical care for the medically indigent, or education for the poor. For them, if we don’t force all those American versions of Scrooge to cough up tax dollars, those in need won’t be provided for.

So, let’s look at some numbers:

  • 65 Million Americans on Medicaid
  • 50 Million Americans on Medicare
  • 50 Million Americans on Food Stamps (SNAP)
  • ALL children have access to a Public Education
  • 50 Million Americans on Social Security
  • 23 Million Americans in the Women, Infants, & Children Program
  • 20 Million Americans getting SSI Benefits
  • 17 Million Americans living in subsidized housing or receiving Section 8 or other assistance.
  • 2+ Million Americans on Unemployment
  • 3½ Million Americans getting Veterans or Railroad Benefits

Obviously there is a lot of overlap, but the picture is clear. There is a lot of tax money going to provide benefits for the needy.

Even with all this, Americans still contributed about $335 Billion in 2013 to various charities – of THEIR choice.

Charitable Giving Stats Chart

Americans are amazingly generous, even with massive tax money redistribution to help the needy!

One interesting observation from the chart above is that charitable giving rose on average a little over 2% a year, in inflation adjusted terms, in spite of the growth in government entitlement programs. That 2+% growth matches the growth in the US Economy over that time. When times were considered good, as in the late 90s, giving went up much faster, and during Recessionary years, giving generally went down.

Clearly, Americans have been giving charity based on what they have to give, and not necessarily based on their perceptions of need. If we want Americans to donate larger amounts, we need to get them more money in their pockets available to give.

One way to put more money into Americans’ pockets is to help the US Economy grow more quickly. An Economy growing at 4½% a year (the 19th Century average) doubles in about 16 years, while an Economy growing at 2% would require about 36 years to double.

Rule of 72

It’s reasonable to expect American charitable giving to double (in real terms) in 16 years, if we eliminate all the stupid policies, regulations, and bureaucracy which hold the US Economy back. Or, we could just continue on our current path and hope the US Economy finally exits the Great Recession and returns to the lousy 2% growth allowing charitable giving to double in 36 years.

A second way to allow Americans to have more money to give away is to end many programs that use up a lot of tax dollars, and then return the tax money to those who earned it. Just by Balancing the US Budget, a cut of about 15%, would give the 15% value back to the private, productive sector of our Economy.

That value, if not the actual nominal Dollars, would increase the after tax, real value of the Dollars that Americans already earn by 15%. Balancing the Budget likely will result in about a 15% one-time bump up in charitable giving. That sounds like a good deal to me.

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