Recently, I came across something called the Cloward-Piven strategy. Back in 1966 Frances Piven, a professor of political science and sociology at City University of New York, and her now deceased husband, Richard Cloward wrote an article for The Nation, an ultra-liberal progressive magazine. In their article they advocated encouraging as many people as possible to take advantage of local welfare programs. The goal was to financially overload the system at the local level so the Feds would have to take over. Ultimately they wanted government guaranteed income for all with no work requirements. In a word, socialism.
That goal seems to be nearly attained. But, is it? Defining welfare broadly, to include social security, medicare, medicaid, veterans pensions and a host of other income assistance programs, the Federal government spends $3.9 trillion a year. That's $12,000 for every man, woman and child living in the country. On the paying side.
Total Federal revenue from all sources is $4.9 trillion. That means that welfare spending is 65% of Federal revenue. Add defense spending, interest payments and all the regulatory agency spending and you have an explanation for 1.4 trillion and growing federal deficits as far as the eye can see.
In fact all this welfare spending plus interest on the debt will exceed revenue eight years from now. That's according to the government's own projections. Moody's just downgraded U.S. treasury bonds from stable to negative. The other two major credit rating agencies have already downgraded U.S. debt. Riskier loans require higher interest rates. In 10 years the social security trust fund will be empty.
Maybe the Cloward-Piven strategy will backfire. It's one thing to force local governments to a fiscal breaking point to promote federalization of welfare. But once the Fed's are broke, and they are close, there is no larger entity to push the debt burden to.
The modern monetary theory so-called economists think we can just print our way out of the problem. But Argentina is an object lesson in why that won't work. Printing money eventually causes inflation, It's now over 140% in Argentina. And this Sunday Javier Milei, a bona fide Libertarian, may get elected President of Argentina. Largely by campaigning against the Argentine Central Bank and its money printing to pay for Peronist welfare programs.
I'm pretty sure that is not what Frances Piven and Richard Cloward had in mind. But that's what they could get.