Valuetainment - August 22, 2023


America's Trillion Dollar Burden： Is Welfare Destroying the U.S. Economy？


Episode Stats

Length

18 minutes

Words per Minute

205.94077

Word Count

3,871

Sentence Count

361


Summary


Transcript

00:00:00.000 Do you have anybody in your family that overextended themselves by trying to help
00:00:03.500 everybody in their family that eventually led to a divorce and a bankruptcy? Can you think about
00:00:07.640 that person? I want you to think about this here. Let's just say you're making $63,000 per year,
00:00:12.340 which is roughly $5,200 per month. What percentage of that income would you be comfortable giving to
00:00:18.320 aging parents to help them out on a monthly basis? Maybe you said 10%. What's 10%? Roughly
00:00:24.400 $500 a month. Fine. Now you may say, why are we using $63,000? Here's why. Because if you add
00:00:29.880 eight additional zeros to it, you would come out with America's income, which is roughly $6.3
00:00:35.900 trillion. However, do you know what percentage of that income America uses for entitlement programs?
00:00:41.600 Ready? 52%. That means if you made $63,000 per year, you would give $33,000 away for entitlement
00:00:50.780 programs. That's what we're doing in America right now. By the way, of the $3.3 trillion of
00:00:55.000 entitlement program, $1.3 trillion of it is only towards welfare. That's 59 million Americans that
00:01:01.700 on a monthly basis receive a welfare check. 19% of America. So the question becomes, is this
00:01:08.900 sustainable? How long can America go until we go bankrupt? We're going to talk about that today.
00:01:14.240 Okay. So if you give value out of this video, give it a thumbs up and subscribe to the channel.
00:01:17.480 Let's get right into it. So why are we talking about welfare? Because Biden just proposed that he wants
00:01:21.720 to take that $1.3 trillion, of which $756 goes to Medicaid, $208 goes to other income security,
00:01:29.440 $147 goes to food and nutrition, like food stamps, $124 goes to housing, Section 8, $70 billion goes to
00:01:35.840 unemployment. President Biden wants to raise that to $2.6 trillion. And it stays like that till 2033,
00:01:44.060 costing you and I roughly $12.7 trillion over the next 10 years. Okay. So now let's break that down,
00:01:51.080 the $2.6 trillion to see where that money is going to be spending. Let's look all the way at the top.
00:01:55.120 Child tax credit expansion for three years, $470 billion. By the way, we're going to go a little
00:01:59.940 bit deeper into this program to see what that program is really all about. Government child care,
00:02:04.140 424. Government paid family leave, 325. Government preschool, $200 billion. For states to expand Medicaid,
00:02:11.200 $200 billion. Expand Indian Health Service, 185. Medicaid home and community-based care,
00:02:16.520 $150. Expand AITC, $137 billion. Expand Obamacare subsidies, $130 billion. Then we have
00:02:22.840 double Pell Grant, $96 billion. Free community college, $90 billion. Expand housing subsidies,
00:02:26.680 $60 billion. Public health, $43 billion. Behavioral health, equity-based tuition subsidies. Expand
00:02:31.280 school meal subsidies. Extend trade adjustment assistance and Medicaid nutrition coverage,
00:02:35.620 total $2.6 trillion. It's interesting when I'm looking at these numbers because Cenk Uygur and I
00:02:39.920 got into a debate specifically over this topic. You'll see what it is, but let me first explain to you
00:02:43.280 what this child tax credit is. You know what's the crazy thing about all this money we're printing?
00:02:46.640 Every time we print trillions, oh, let's do $2.6 trillion. Guess who that money goes to? It
00:02:50.580 goes to low and middle income, but low and middle income families don't know how to keep their money.
00:02:53.800 They spend their money and that money eventually flows to who? To the wealthy. And what increases
00:02:57.300 value? These non-duplicatable assets. One of the classes being alternative assets such as art.
00:03:02.740 This is why today's sponsor is Masterworks. So what is Masterworks? Look, you know how many times we
00:03:06.460 watch and say, oh, wow, look at Jamie Dimon's got a $900 million art collection, but I can't afford to buy art
00:03:10.860 like that, but maybe you can afford to buy a piece of the art, maybe a share of it, kind of like you
00:03:14.840 buy stock in Apple, but you can't buy the whole $3 trillion company. That's when Masterworks start.
00:03:18.620 They buy a million dollar painting, for example, and you're able to own a piece of it. While a single
00:03:23.720 return is not a guarantee of future returns, their 15th exit of painting a Cecily Brown piece just sold
00:03:30.220 a few days ago for a return of 77.3% annualized net return. Again, that's not a guarantee, but this is
00:03:36.060 one thing you need to know. The last 27 years, blue chip whole contemporary art has outpaced the
00:03:42.040 S&P 500 by an impressive 136%. That's pretty impressive. And by the way, collectively, I think
00:03:48.480 all arts they've sold, Masterworks is around $45 million. So if you want to participate with
00:03:52.620 Masterworks, they got 790,000 users now, roughly $800 million of assets under management. So if you,
00:03:58.960 again, if you can't own a Warhol or Banksy or Picasso yourself, but you want to own a share of it,
00:04:03.720 you can go to masterworks.com forward slash Valuetainment or click on a link below to get
00:04:08.000 access today. The American Rescue Plan increased the amount of child tax credit from $2,000 to $3,600
00:04:14.360 for qualifying children under age 6 and $3,000 for other qualifying children under the age of 18. So
00:04:20.600 just think about it. The more kids you have, and if you're not in a marriage, you get more money given
00:04:24.960 to you by the government. Guess what that incentivizes? We're going to talk about that here in a minute.
00:04:28.540 Wait till you see the data on that. Second one, child care. Biden 2024 proposal includes
00:04:33.240 $22 billion for existing early care and education programs up from 10.5% from 2023 levels,
00:04:39.420 including $9 billion for federal block grants. Paid family leave. The proposed program would
00:04:43.920 provide workers up to 12 paid weeks off to bond with a new child, care for a family member, or heal
00:04:50.140 from their own serious illness. So now you may be watching and saying, Pat, I get it. Where are you
00:04:54.440 going with this? We have to help these people. They need help. What should we do? Just leave them
00:04:58.420 alone? Well, let me give you an idea how we got here because if you don't pay attention to this stuff,
00:05:01.360 you're paying for it, your tax is going to increase. During the Great Depression, FDR wanted
00:05:05.820 to come out with a temporary solution to help those who couldn't take care of themselves.
00:05:10.860 Eventually, by 1935, at the State of Union address, FDR declared the time has come for action
00:05:17.060 by the national government to provide security against the major hazards and uncertainties of
00:05:22.480 life. He went on to propose the creation of the federal unemployment, the old age insurance
00:05:26.220 program. He also called for guaranteed benefits for poor single mothers and their children,
00:05:30.440 along with other dependent persons. And a few months later, the Social Security Act established
00:05:34.900 a national welfare system. Keep in mind, prior to this time, we don't have entitlement programs,
00:05:39.140 okay? We're getting by with no entitlement programs. All of a sudden, he announces that it's supposed
00:05:43.680 to be temporary and guess what happens? Becomes permanent. But the key word here is the following.
00:05:48.520 Guaranteed benefits for poor single mothers and their children, along with other dependent
00:05:53.820 persons. Let's see. They say bad policies has consequences. Did this influence how many new
00:06:00.180 single mothers we had in America? Did it influence how our kids did? Let's look at the data. So this
00:06:05.460 chart right here is from the U.S. Government Census Bureau, okay? And it's showing you the growth of
00:06:09.720 unwed childbearing in U.S. from 29. Notice if you look at 1935, flat, less than 4% of the babies born
00:06:16.840 are born to a single mother. That means 96% of all babies born in 1940 were born to a family where there's a
00:06:25.620 mother and a father. 96%. Then that goes from there to now, 40% of babies being born are born to a
00:06:35.300 single mother, not married, no father figure. You know what this tells you? We can look at one other
00:06:40.320 data. If you go to 1964, which was the War on Poverty, this is the program that Lyndon Johnson
00:06:45.260 came up with. He launched the Medicare and Medicaid and expanded housing subsidies, urban development
00:06:49.720 programs, employment and training programs, food stamps, social security, and welfare benefits.
00:06:53.500 These programs more than tripled real federal expenditure on health, education, and welfare,
00:06:57.940 which grew to over 15% of the federal budget by 1970. Today, it's at 52%. Take a look at what
00:07:04.520 happens after 64 as well. Spike to 40%. So somebody may say, well, you know, how dare you make these
00:07:11.860 comparisons? Why would you do this? It's called data. And the great thing about data is the more years you
00:07:18.580 have to see if something's working or not. The proof is in the pudding. This doesn't lie. This is
00:07:24.020 numbers. These were bad policies that incentivized women to have kids out of wedlock. It's not me
00:07:31.860 telling you this. It's the data telling you this. So you may say, Pat, I need more data. No problem.
00:07:36.060 I'll give you more data. Here's another one to look at. Again, from the U.S. Census Bureau, if you look at
00:07:39.400 this, this is total families with children from 1959 till today. If you look at this, look at the top.
00:07:44.280 Married couple families with children. It's 25,000. You got to add three zeros to it because
00:07:49.800 it's in thousands, which means 25 million. We've been pretty much the same during that 60 year period,
00:07:54.820 whatever the timeline is. But if you look at the bottom in the red, single parent families with
00:07:59.480 children, we have three X'd in 60 years. More people are saying, all good. I'm going to have more
00:08:05.840 kids with no husband or wife being in the household together. These kids are being raised by a single
00:08:11.240 parent. Now you may say, Pat, I mean, it's just one program. It's not like we have so many
00:08:15.640 different programs. Let me read you all the programs and you tell me if you heard of these
00:08:18.440 before. First one, Earned Income Tax Credit, EITC, Temporary Assistance for Needy Families, TANF,
00:08:23.940 the Women, Infants, and Children Food Program, WIC, Supplemental Social Security Food Stamps and
00:08:28.780 Child Nutrition Programs, Public Housing and Section 8 Housing, and Medicaid. By the way, while married
00:08:33.480 couples with children can also receive aid from these programs, most assistance to families with
00:08:38.380 children goes to single parent households. 45.4% of families headed by single mothers receive food
00:08:43.400 stamps. 51.4% of single mothers have never been married. Welfare programs financially enable
00:08:50.740 single parenthood. Who does it hurt? The kids. And if the kids are raised without discipline,
00:08:55.760 who does it hurt? Your neighborhood. So this next part, I'm going to read it to you. What I want to
00:08:59.940 challenge you to do is actually follow it with me and listen to it while we're going through this.
00:09:04.460 You'll see why. Let's read this together. A major problem is that the means-tested welfare system
00:09:09.360 actively penalizes low-income parents, ready, who do marry, who do marry. You're incentivized if you
00:09:17.300 don't marry. You're penalized if you do get married. All means-tested welfare programs are
00:09:22.020 designed so that a family's benefits are reduced as earnings rise. The more money you make and you're
00:09:27.640 independent, your benefits go lower. You're like, why would I work harder to make more money? My benefits
00:09:32.800 are getting lower. I'm not going to work. So you're going to send me money? I am. That's what that
00:09:36.540 means. In practice, this means if a low-income single mother marries an employed father, her
00:09:41.980 welfare benefits will generally be substantially reduced. The mother can maximize welfare by
00:09:47.100 remaining unmarried and keeping the father's income off the books. Tell me that makes any sense
00:09:53.100 for you. If this is the incentive program that we have, what do you think people are going to do?
00:09:57.920 Exactly what it takes to... Stuck in that winter slump? Try Dove Men plus Care Aluminum Free
00:10:04.960 Deodorant. All it takes is a small change to your routine to lift your mood. And it can be as simple
00:10:10.120 as starting your day with the mood-boosting scents of Dove Men plus Care Aluminum Free Deodorant.
00:10:14.800 It'll keep you feeling fresh for up to 72 hours. And when you smell good, you feel good. Visit
00:10:21.460 dove.com to learn more. Maximize the benefits without having to work. For example, a single
00:10:27.660 mother with two children who earns $15,000 per year would generally receive around $5,200 per year of
00:10:33.140 food stamps benefits. However, if she marries a father with the same earnings level, her food stamps
00:10:37.340 would be cut to zero. A single mother receiving benefits from Section 8 or public housing would
00:10:43.300 receive a subsidy worth on average around $11,000 per year if she was not employed. But if she marries a
00:10:50.380 man earning $20,000 per year, those benefits would be cut nearly in half. Both food stamps and housing
00:10:56.820 programs provide very real financial incentives for couples to remain separated and unmarried.
00:11:03.380 So some people will say, Pat, stop it. You know, we have to take care of these folks. It's not like
00:11:06.880 these people are not self-sufficient. Why are you discriminating amongst these people? Let me give
00:11:10.740 you more data. I'm going to give you two of them. Marriage promotes self-sufficiency. These are
00:11:15.300 percentages of families with children that lack self-sufficiency. You see the 37.1%? This is
00:11:21.420 single-parent, female-headed families. 37.1% of them lack self-sufficiency. They need you and I,
00:11:28.980 the government taxpayers, to take care of them. But look at the other side. Married parent families,
00:11:34.580 only 6.8% need help. That means 93.2% are self-sufficient. And this next one is my favorite
00:11:41.060 chart. You know why? Because so many times you'll do something and at the beginning it looks good.
00:11:45.060 You see it's working. Look how awesome it is. Look what we're doing to reduce poverty. But you know
00:11:50.060 what this data shows? It shows it took us 55 years to realize how terrible of an idea this was. Take a
00:11:57.660 look at this chart. So 1947, if you look at all the way to the left, top, percentage of individuals who
00:12:02.840 were poor by the official poverty standard. Keeps going lower and lower and lower. What a noble program
00:12:08.480 by FDR. And boom, 64. Lyndon Johnson, lower, lower, lower. And they go to 1990. Look at the red.
00:12:14.880 Total means-tested welfare spending in billions of constant dollars goes higher and higher and higher.
00:12:23.340 And the blue stays. And this chart only goes to 2012. It's an additional 11 years since then.
00:12:30.800 We're at 52% of the 6.3 trillion. And by the way, this ends in 2013. There's an additional
00:12:38.260 10 years to it. What do you think it happened? You think it went lower? It went higher and higher
00:12:41.980 and higher. Today it's 52% entitlement programs. 59 million Americans receive welfare program today.
00:12:48.180 How long can we go with this to sustain it? We can't sustain it today, let alone 10 more years,
00:12:53.900 20 more years. And while politicians, you know what they're saying? Oh, you are so selfish if you
00:12:58.480 decide to get rid of these entitlement programs. There's no way you should re-elect this individual.
00:13:03.340 Why? He's giving you good ideas or she's giving you good ideas, but you're playing off of fear
00:13:08.740 because you've given people so many free entitlement programs that they're addicted to it. You know who
00:13:13.200 does things like that? You ever heard of drug dealers, what they do? They give you a little
00:13:17.240 bit of crack or cocaine or whatever, and then eventually, a little bit for free. Then, hey,
00:13:21.560 pay up. Then pay up. Now they're like, they can't get off of it. What happens? You ruined that
00:13:27.020 person's life. These people, the 59 million, what percentage of their dreams they think is going to
00:13:32.960 become a reality? What do you think? All of that was taken away from them. Done. Done. Just because
00:13:39.560 you give a little bit of drugs, let's replace it with some entitlement programs. Same consequences.
00:13:44.440 You're hurting these people long-term. You're loving them over short-term, but you're destroying
00:13:48.280 their lives long-term. So a few things, I've been watching and saying, Pat, you know, what do you want
00:13:51.820 us to do? Do we just cut this whole thing all of a sudden? Of course, we can't do that suddenly, but
00:13:55.820 what if we take that $3.3 trillion that we have, and every year we cut at 10%, meaning 3.3 goes to
00:14:02.220 3, goes to 2.7, maybe 2.5, maybe 2.3, maybe 2.1. Eventually, within the next 15, 20 years,
00:14:09.580 we're down to a very small amount of money that we're giving to this. Oh, Pat, there's no way that
00:14:13.840 would, I understand it's not going to, because these congressmen with unlimited terms they can run,
00:14:18.840 they're never going to pass something like this, because you need term limits, and they're not going
00:14:21.900 to let that happen. I'm just telling you that's the solution, because long-term, if you don't agree to this,
00:14:25.240 you know who's getting screwed? The kids and our grandkids. And all we're saying is, guys,
00:14:29.320 you can handle it. You go out and handle all these problems. I'll give you another one here for you
00:14:32.520 as well. If we're rewarding behavior for people to have more kids, and we're going to give them
00:14:36.960 entitlement programs, what do you think people are going to do? What if we do the other way around?
00:14:39.980 What if we reward people who are married having kids with a job? What if we do that? Oh my God,
00:14:44.980 you think people will change? Of course they've changed. I've ran a sales organization for 23 years.
00:14:48.520 I've run my own insurance company for the last 14 years. Do you know how many times I change a
00:14:51.920 compensation program? 50, 60, 70 times. You know what happens when I had a comp where people were
00:14:57.720 writing bogus insurance business, but they were just kind of writing business because they were
00:15:00.860 competing, and I changed it. Overnight, all the bogus business disappeared. Like, literally,
00:15:05.960 overnight, the bad business disappeared, because the incentive program I came up with wasn't a good
00:15:10.660 one. So we had to change it. What happened? Suddenly, everyone's income went up. And the people that,
00:15:15.280 you know, were doing their thing, they were improving. They were making an effort to get better,
00:15:18.720 because the incentive program changed. We also have to change the incentive programs that we have.
00:15:23.680 But last but not least, let me give you the most important one. I got four kids. My dad, when I
00:15:27.640 was, I don't know how old I was, eight years old, nine years old, told me a story about being a man.
00:15:31.320 He says, Pat, let me tell you the story here. I told the story in Austin a couple weeks ago. He said
00:15:35.440 this to me. He says, Pat, one day, father wakes up his son. It was summer, so the kid wasn't going to
00:15:40.140 school. He says, son, today you're going to become a man. He says, what do you mean I'm going to become a man?
00:15:43.980 You need to go out there and make $5 today. The son says, dad, I'm 12 years old. I'm 11.
00:15:48.700 I'm 11 years old. What do you mean I need to go make $5? He says, you need to go make $5 today to be a man today.
00:15:53.160 I said, dad, come on, dad, I'm a kid. No reason. Boom. Papa leaves. Dad leaves. Son is like, $5. My God, mom,
00:15:59.960 I shouldn't work. It's not safe out there. Mom says, don't worry about it, baby. Here's $5. When daddy comes home,
00:16:04.860 just give it to him. Daddy, you made $5. It's between you and I. No problem. Dad comes home. Did you make your $5?
00:16:09.200 Of course, dad. I made the $5. Here's the $5, daddy. Awesome. Dad grabs the $5, throws it in the fireplace.
00:16:17.720 The fire starts burning the $5. Mommy chases after the $5. Daddy realized mommy gave the kid $5.
00:16:24.300 He says, son, you didn't make the $5. Kid goes to sleep, feels like crap, wakes up in the morning.
00:16:29.060 Dad says, hey, today, you got to make $5. Dad goes to work. Son goes to mom. Hey, mom, can I give,
00:16:34.340 I'm not giving you nothing. He's not going to burn another $5 of mine. You got to go figure this thing
00:16:37.960 out. Son goes up, starts begging everybody in the community, starting with his uncle. And his uncle,
00:16:43.020 finally, after begging a few different relatives, he raises $5 through begging. Entitlement programs
00:16:49.120 through begging, he gets $5. Comes home. Mom, guess what? I got $5. I talked to uncle this,
00:16:53.960 uncle that, auntie this. Awesome. Good job, babe. Dad comes home. Son, did you make $5? Yeah,
00:16:58.740 daddy. Look at this. $5 bills. Dad grabs it. Boom. Throws in the fire. Why would you do that? You didn't
00:17:04.440 make $5. How do you know? Trust me. I know. Tomorrow, you best make $5. Dad wakes up, goes
00:17:12.160 to son. Hey, $5 today. Goes to work. Mom, no. Begging, no. And she goes across the street to
00:17:18.060 say, man, can I work for you? I need to make $5. I said, or else my dad's going to chew
00:17:21.340 me out. He said, I can't give you $5, but I give you a penny for each sandbag you move
00:17:25.080 from here to over there. Only a penny, only a penny. This kid, 11, 12 years old, only moves
00:17:30.200 150 sandbags. Gets $1.50 and change. Dad comes home. Son is sweaty, dirty hands. Says,
00:17:36.000 son, did you make $5? He says, no. I made $1.50. Puts the money in dad's hands. Dad
00:17:40.420 grabs the money, throws it in the fireplace. The son runs into the fireplace, starts picking
00:17:45.040 up this money. Dad hugs him. He says, son, today I know for a fact you worked for that
00:17:51.660 $1.50. You know why? Because you were willing to burn your hands because you paid the price
00:17:56.440 for this. You're officially a man. I am so proud of you. I think we need to start believing
00:18:01.360 in the American people that you are better than this. You can figure out a way to make
00:18:06.620 money. If you're not in a good situation to have kids, don't have kids. I think too many
00:18:11.660 people are pressured to have kids simply because of these bogus incentive programs that we have.
00:18:16.640 If we start believing in our people, we change the incentive programs, we challenge our guys
00:18:21.240 to start dreaming again, having value in themselves again. Eventually, one day we're going to wake
00:18:25.480 up realizing we don't need to waste all our money, your money, my money, 52% on people
00:18:31.260 and steal their dreams away from them. Instead, we've developed a whole new generation of leaders
00:18:36.400 and America's future looks bright. If you got value out of this video, give it a thumbs up,
00:18:41.540 subscribe to the channel, and I got another video for you. If you've never watched the
00:18:44.540 history of social security, click here to watch it. Take care, everybody. Bye-bye, bye-bye.