A Humane Welfare System--One That Won't Bankrupt America

Since the calculated stock market crash of 1929 and subsequent blaming of capitalism for the failure of the US economy, a myriad of "welfare" programs have sprung up--most of them like a cancer on the social and economic fabric of America.

While it is important that we take care of our poor, a governmental approach--which is often much more complicated than it needs to be--seldom works. Here's an approach, however, that will work.

In an era when presidential campaign finalists attempt to outdo each other in promises to provide for the medical and economic welfare of all Americans, it would do us well to take note of a few realities.

1. Nearly all current government welfare programs are destructive of the family, teach indolence and dependence rather than thrift, and steal human dignity.
   
2. Government intrusion into the medical arena is the primary reason for skyrocketing health care costs and declining medical care in America.
3. The United States has a current and future debt obligation of between $50 trillion and $80 trillion.
   

It is not possible for us to continue our current national spending course and not expect to experience national economic suicide.

It is much easier for us not only to spend other people's money, but to spend it with much less thrift than if it were our own. This is

There exists in America a plethora of entrenched interests which couldn't care less whether our welfare system is humane. Such people only care about themselves.

why bureaucrats find it so easy to raise their own salaries. This is why lobbyists are so often among the upper crust of the rich. This is why the rich profit from government handout schemes with much greater success than the poor. This is why advocates for various industries agitate for government welfare schemes.

We need to put an end to the fattest of the cows taking most of the funds from the public trough. This can be accomplished with a simplification of the welfare system, so that those who really need it can get access to it, and so that America can continue to support our most indigent for years into the future. Here's what we need to do.

Step 1 - Phase Out Social Security. Social Security, since its inception, has been nearly the equivalent of a Ponzi scheme. If we don't soon phase out this wasteful fraud, we won't be able to provide economic security for anyone. The height of political and economic irony is for us to refer to a "Social Security Trust Fund" which does not exist.

While it is morally imperative for us to support those who have grown old expecting Social Security to augment their income, not phasing out Social Security will result in economic disaster. Even at my current age of 45, I would be glad to forfeit ALL of my Social Security "earnings" if I were able to begin to invest both mine and my employer's "contributions" to my Social Security. Everyone should be given than option. Without the monkeying of the Federal Reserve (a tall order, for sure), everyone would be better off.

Step 2 - A Negative Income Tax. A better solution would be to have no income tax at all, but the Negative Income Tax is a healthy first step. Milton Friedman explained this idea in his 1979 book Free to Choose. It sounds to me very similar to the Earned Income Tax Credit. For it to work, however, all other welfare programs would have to be abolished. With a Negative Income Tax, those who don't earn any income would be subsidized to a subsistence level and no more.

Unlike current welfare schemes, this plan would encourage hard work and thrift, as subsidies would be phased out gradually rather than being wiped out by income earned by honest labor. This program would require all Americans to file a tax return. It would also allow private charitable organizations

A simpler solution is much more efficient--and much more humane.

to coordinate assistance for the indigent. There's no getting around the fact, however, that thousands of government employees, as well as lobbyists, would be worse off in the short run, as they would be temporarily out of jobs.

But that--in the long run--would be a huge productivity bonus.

Friedman writes

Most of the present welfare programs should never have been enacted. If they had not been, many of the people now dependent on them would have become self-reliant individuals instead of wards of the state. In the short run that might have appeared cruel for some, leaving them no option to low-paying, unattractive work. But in the long run it would have been far more humane.

Free to Choose, pg. 119

There exists a plethora of entrenched interests which couldn't care less whether our welfare system is humane, even while they claim falsely that it is humane. We can do much better than subsidizing those who grind upon the face of the poor for their personal aggrandizement. We need to get rid of this kind of entrenched bureaucrat. If the leader of a flock of geese looks back and finds that its V is no longer behind it, it'll either move to get back in line, or the geese will get a new leader.

If we don't move our V, this flock of geese is headed toward American financial insolvency. Besides, a simpler solution is much more efficient--and much more humane.