Makers and Takers

Can’t resist chiming in on Mitt’s “47%” comment, as I was asked to do so by USNews and World Report:

I’m a freeloader/slurper from the public trough. But I’m also producing something—educated citizens and workers, and useful research—that taxpayers’ decisions in political markets have determined to be socially valuable.

Read the rest here.


Dre

Your Daily Show interview on beauty alone has contributed many many laughs to a downtrodden society.

Tony

I'm no defender of Romney, but I don't think the maker v. taker view of the world classifies public employees as takers, but rather anyone on the receiving end of wealth transfers. Am I wrong?

Q

You would think so, but current Republican orthodoxy seems to draw the line wherever it suits their interests: unionized government employee = taker, military employee = maker, recipient of earned-income tax credit = taker, recipient of inheritance = maker.

pawnman

Although someone who receives an inheritance isn't taking that money from me, while someone getting money from the federal government for being poor is.

dave

If Mitt were to get elected would he decline the generous pension and other benefits given to ex-Presidents? Wouldn't want him to becore one of the 47%...

Not sure what MASS pays it's ex-Govenors, but I'm sure that's different in his mind (like the difference between Obamacare and he did in MASS)

Erin

Your entire comparison of a public vs. a private employee lacks some important distinctions.

"But I'm also producing something—educated citizens and workers, and useful research—that taxpayers' decisions in political markets have determined to be socially valuable."

You are assuming that some taxpayers and politicians correctly determine social value for all. I'd suggest that the individual, and only the individual, can place a value on your services. As for research, it may or may not prove useful, but it's rich for you to make the automatic assumption that it is.

As for your comparison between yourself and the washroom attendant, you are missing an important factor: I can choose which hotel to patronize, thereby voting with my dollars on whether or not I find that service to be of value. Likewise I can tip the washroom attendant (or not) based on the same decision process. I cannot, however, separate my tax dollars and ensure they do not go to you if I don't find your services to be of value.

For you to claim that because politicians and education funding votes tend to go in your favor does not mean you automatically become a "maker" or provide services that are of automatic value.

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Masaccio

Romney's 47% was a description of people who pay no federal income tax. Presumably Prof. Hamermesh is not actually among that group, making his characterization of himself as a "freeloader" his, and his alone, not Governor Romney's. Straw men, like the straw house of the Three Little Pigs, are always the easiest to knock down.

But *please* keep this blog about economics and not about Presidential politics.

164

Its not so much a matter of being right or wrong. There are many examples of clearly evident truths that offend. Other examples are:
Do I look fat in this dress?
How much do waiters/ waitresses make in tips at full service restaurants?
Does an increase in the minimum wage create unemployment?
add your own to the list

Brian

I think you just made Mitt's point. The problem is that the same people who are benefiting from the public trough are also, via the political market, the one's determining the social value of what they are providing in return. Those are not independent determinations.

Mitt's point is that we're close to or beyond a tipping point where a coalition of 'net takers' will vote for ever increasing levels of benefits for themselves at the expense of those who create products and services of true value.

Southern Europe provides an example of what happens when a nation passes that tipping point. If there had been a Greek statesman leading a movement to curtail out-of-control benefits, would you have called him a 'faker'?

tmeier

Only a fool would assert there are no useful public employees, even public employees who clearly deliver value which a market would set greater than their cost. The problem is, not being a market, there is no mechanism to separate the public service wheat from the chaff. There is a lot of chaff.

Still, I reserve my ire for public employees who not only don't deliver valuable services but in order to protect their stipend actually inhibit productivity, they have negative value.

Julien Couvreur

It is sad that people still perpetuate confusion on a simple concept as "taking", as you are.

A worker in the hotel is not taking, he is voluntarily paid by his employer. The employer can choose not to pay the worker, by terminating the employment contract.
Similarly, Apple does not "take" my money, I give money to Apple, which it accepts; I can stop giving money to Apple by my own decision.
On the other hand, you are taking, because your salary is tax-funded and taxes are not voluntary. The only effective and peaceful way for me not to pay your salary is to escape the country.

By the way, this has nothing to do with the value that your work provides. To take an extreme, I am sure even the laziest governmental clerk provides *some* value, occasionally.
Because your salary is tax-funded and therefore not voluntarily paid, there is no objective way to determine whether it is economical or worthwhile. Spending other people's money, in particular borrowed money that our children will have to repay, does not constitute "demonstrated preference".

You are correct that most people are partly takers, at least at some point in their life. But that does not mean that we should be unclear about what taking means, promote it or consider it normal or healthy.

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James

I think you must have a different understanding of Romney's 47% comment than I do. I thought he was referring to anyone who does not pay income tax as a freeloader. Now I expect that you, like most public employees, do in fact pay income tax (if not, tell us your secret!), so you're not one of the "freeloaders". Whether your product is of value is another question: are the courses you teach required or elective?

Unfortunately for Romney, there are all sorts of reasons for not paying income tax that don't quite fit any reasonable definition of "freeloading", military personel serving in combat zones probably coming top on the list. There are even people like me, who occasionally take time off from a reasonably productive (and income tax paying) working life to do other stuff. Am I freeloading because during one of the years I took off to complete an advanced degree, I didn't bother working enough to pay income tax? I don't think so.

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Wes

I just told my 3 and 5 year old kids that they are free loaders. They don't pay taxes but they use a heck a of a lot of public resources! Additionally, they even reduce my federal taxes!

Mark

I am more or less in agreement with the gist of the article. By the same standard, even terrorists, drug dealers and even drunk drivers are makers and takers at some point. Their actions cause the rest of us to spend a lot of money in the public and private sector to defend ourselves from them as well as compensate the victims and survivors [Makers]. And then, when they are caught, we spend some money on them to deal with the judicial consequences [Takers]. One might ask what would we do without these security threats ? Live in an austere economy ?

Mannyv

It's interesting how the author self-selected himself into a category that was not one of the original categories. The 47% was the percentage of people who didn't have a federal liability, as others have pointed out.

Why the willful distortion of what Romney said?

TJ Anderson

Except the Taxpayers didn't decide. Bureaucratic did.

Ordman

What everyone seems to miss in discussion of this topic is the definition of the role of government in our society. Most would agree the proper role of government is national defense, protection of life and property rights by law enforcement and even building a road or two. All citizens regardless of whether they pay income taxes or not benefit from this kind of government spending. Hence the government employees who perform these jobs can be considered makers of good government. The 58% of federal spending on wealth transfer, a.k.a. Social programs, constitutes the takers. Takers include all Social Security, Medicare, Medicaid and other social dependency program recipients.