Creating Debt

Everyone is aware of the burgeoning debt being created by the federal government.  Some economists have estimated that the federal government spends about $1,000,000,000 every 8 minutes.  That is not really what the government spends, because the state and county and local levels of government are simultaneously spending money.

But even that is not giving us a complete picture of the mentality of debt that our government is fostering.

Consider this true story.

A young woman has autism.  She lives with her mother.  Despite her disability, she has finished high school and gotten a part-time job.  Her employer helps her to complete the paperwork to qualify for SSI to supplement her part time income.

She receives about $500 a month.

Since that qualification, the young lady has gotten a second part time job, and successfully completed a few college courses.  She opened a bank account and began to proudly save her money.  Her mother encouraged her, helping her to create a budget and set goals for saving and spending.

But SSI stepped in, telling the young woman and her family that in order to stay qualified, she could never have assets, other than a home and under certain circumstances a car, that totaled more than $2,000.

Everything counted.  The family had to count any gift she received from other family members.  They had to count possessions she might have.  She could not have an IRA to help provide for her when she herself was of retirement age.  She could not create an account to save for more college courses.  She could not even create an account to provide for her own final expenses.

And it was an “all-or-nothing” arrangement.  The SSI program did not implement a sliding scale, allowing for a decrease in benefits in proportion to an increase in her earning capacity or savings.  So she was stuck.

The blow to her growing self-esteem was immense.  She could not move toward more independence because she would have to save money to prepare for independent living and saving money would put her over the cap.  She could not try to work more hours in either or both of her jobs because she couldn’t make enough immediately to replace the SSI income.

Her mother now has to create a “special needs” trust to provide for her daughter when she passes on.  This means that all the mother’s assets will need to be liquidated and placed in the hands of a third party, who will then be the decider of what and whether her daughter will receive funds for anything – further increasing her condition of dependence.

People often confuse the fact that there are those who legitimately need and deserve assistance with the assumption that the government is the proper entity to provide it.  As the case above illustrates, the government is often the most improper entity.

Today’s government values spending over saving.  Unfortunately, the SSI program forces it recipients into a position where they must imitate that behavior, with artificial one-size-fits-all limitations on behavior that most families would encourage.  Behaviors like thrift, and financial planning, and fiscal responsibility.

Families understand and teach those values.  It’s time the government learned them.

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