We in America love Big Government...

We in America love Big Government.

But only to help rich people, not poor people.  We are clever and do it via the submerged state so we can lecture poor people about not leeching off the state.

Suzanne Mettler has more The Submerged State: How Invisible Government Policies Undermine American Democracy:

Obama, given his policy agenda, had steered directly into the looming precipice of the submerged state: existing policies that lay beneath the surface of U.S. market institutions and within the federal tax system. Contrary to opponents’ charges that his agenda involved the encroachment of the federal government into private matters, Obama was actually attempting to restructure a dense thicket of long-established public policies, but ones that are largely invisible to most Americans—and that are extremely resistant to change. Efforts to transform these policies, which have become entrenched fixtures of modern governance, generate a deeply conflictual politics that routinely alienates the public, hindering chances of success or sustainability of the reforms. 

The “submerged state” includes a conglomeration of federal policies that function by providing incentives, subsidies, or payments to private organizations or households to encourage or reimburse them for conducting activities deemed to serve a public purpose. Over the past thirty years, American political discourse has been dominated by a conservative public philosophy, one that espouses the virtues of small government. Its values have been pursued in part through efforts to scale back traditional forms of social provision, meaning visible benefits administered fairly directly by government. In the case of some programs geared to the young or working-age people, the value of average benefits has withered and coverage has grown more restrictive.14 Ironically, however, the more dramatic change over this period has been the flourishing of the policies of the submerged state, which operate through indirect means such as tax breaks to households or payments to private actors who provide services. Since 1980 these policies have proliferated in number, and the average size of their benefits has expanded dramatically. 

Most of these ascendant policies function in a way that directly contradicts Americans’expectations of social welfare policies: they shower their largest benefits on the most affluent Americans. Take the Home Mortgage Interest Deduction (HMID), for example, which is currently the nation’s most expensive social tax break aside from the tax-free status of employer-provided health coverage. Let us assume that a family buys a median-value home and to finance it borrows $230,000 at an interest rate of 6.25 percent for thirty years. The richer the household, the larger the benefit: in the first year, the average family, with an income between $16,751 and $68,000, would owe around $3,619 less in taxes; those in the next income group, with earnings up to $137,300, would reap an extra $5,146; and so forth, on up to the wealthiest 2 percent of families, with incomes over $373,650, who would enjoy a savings of $6,673. Of course, in reality, these differences are likely to be much greater. Low- to moderate-income Americans usually do not have enough deductions to itemize, so they would forgo this benefit and receive instead only the standard deduction. Meanwhile, the most affluent are likely to purchase far more expensive homes; if a family in the top income category opts for a more upscale home and borrows $500,000 for a mortgage, it will reap a benefit of $14,506 from the HMID; if this family purchases a truly exclusive property and borrows $1 million for a mortgage, it will qualify to keep a whopping $29,012!15 This pattern of upward redistribution is repeated in numerous other policies of the submerged state: federal largesse is allocated disproportionately to the nation’s most well-off households. Such policies consume a sizable portion of revenues and leave scarce resources available for programs that genuinely aid low- and middle-income Americans. 

Yet despite their growing size, scope, and tendency to channel government benefits toward the wealthy, the policies of the submerged state remain largely invisible to ordinary Americans: indeed, their hallmark is the way they obscure government’s role from the view of the general public, including those who number among their beneficiaries. Even when people stare directly at these policies, many perceive only a freely functioning market system at work. They understand neither what is at stake in reform efforts nor the significance of their success. As a result, the charge leveled by opponents of reforms—that they amount to “government takeovers”—though blatantly inaccurate, makes many Americans at least uncomfortable with policy changes, if not openly hostile toward them. 

Exacerbating these challenges, at the same time as the submerged state renders the electorate oblivious and passive, it actually promotes vested interests, and it has done so especially over the past two decades. The finance, real estate, and insurance industries all thrived until the recent recession, and in turn they invested heavily in strengthening their political capacity, making them better poised to protect the policies that have favored them. As a result, reform has required public officials to engage in outright combat or deal making with powerful organizations. Such politics disgust most Americans and hardly epitomize the kind of change Obama’s supporters expected when he won office.

Mettler, Suzanne (2011-08-31).The Submerged State: How Invisible Government Policies Undermine American Democracy (Chicago Studies in American Politics) (Kindle Locations 114-152). University of Chicago Press. Kindle Edition.