Money movers: What governments do

“Redistribute My Work Ethic,” a bumper sticker recently exhorted those of us driving north on Chicago’s Tri-State Tollway. The slogan probably owes its existence to Barack Obama’s 2008 campaign run-in with “Joe the Plumber” Wurzelbacher (now Joe the congressional candidate), to whom Obama explained that all Americans benefit when we “spread the wealth around.” Obama’s off-the-cuff phrase—never to my knowledge repeated in an official campaign or administration statement—has spawned a whole rhetorical frame within which to attack the president’s policies. “Redistribute My Work Ethic” captures this conviction: government programs redistribute wealth from the hard-working rich to the lazy poor.

According to a Gallup poll, Americans are closely divided on whether government should redistribute wealth by way of “heavy taxes on the rich,” with Democrats much more favorable toward the proposition than Republicans and independents. This difference comes into play whenever Democratic politicians propose rolling back the upper-bracket tax cuts initiated by George W. Bush in order to pay for something, such as the payroll tax holiday, health insurance subsidies for the poor and middle class or food stamps. This division in popular opinion may be why the president rejects the “redistribution” label when promoting his policies.

But what poll respondents and disgruntled motorists don’t seem to appreciate is that redistributing wealth is what all public budgets do. And the biggest redistribution that the federal budget effects is not from the rich to the poor; it’s from the young and middle-aged to the old. Social Security and Medicare cost $1.1 trillion in 2010, a third of the federal budget. These programs are dear to liberals, and their overall effect is mildly progressive. But their first function is to spread wealth from working-age people (regardless of their incomes) to retirement-age people (regardless of their incomes) and to their doctors.