THE EFFECTIVE REPLACEMENT FOR THE WELFARE STATE
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The Effective Replacement For The Welfare State By Siddharth Gundapaneni Federal welfare programs were created in order to improve the well-being of the general public. These can range from providing healthcare, food stamps, housing subsidies, and more, for the general public. Unfortunately, as the renowned economist Thomas Sowell once stated, “Nothing is easier than to have good intentions but, without an understanding of how an economy works, good intentions can lead to disastrous consequences for a whole nation.” Leftists often concur that freedom from coercion is a beneficiary, but then advocate for government coercion to enforce equity, not seeing that this is a logical fallacy. An example of this is the use of social programs, which have been largely ineffective at fighting racial inequity, and at handling most of society’s problems in general. Since the start of the 21st century, women’s participation in the labor force has only declined, and African-Americans are the only demographic whose real wages have decreased since then. Despite the creation of new government programs and the expansion of existing ones, society has not progressed as much as one would think. What economists want often doesn’t become reality. There simply aren’t enough economists to bring about a substantial influence on politics — politicians find economists that will listen to them, seldom one who will tell them right from wrong. For example, most economists understand and denounce the use of price controls. An example of this as government policy is rent control, which epitomizes a boondoggle by seeming to help poorer populations, when in reality they work to their detriment. Rent Control in New York City has notoriously deteriorated the quality of housing, as evidently shown in a study done by the National Multifamily Housing Council, depicting that landlords were significantly less likely to be up to date on maintaining and servicing apartments
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with Rent Control in place. Rent controls have also led to the hoarding of property by the wealthy (such as Ed Koch keeping his $475 rent controlled apartment and Congressman Charles Rangel holding on to 4 apartments of his own), the widespread use of Black Markets in order to make a fair deal, worsening housing shortages, and more. However, these problematic policies still occur because politicians prioritize optics, rather than genuinely helping the people. Social programs are exactly that; a cheap gimmick designed to look good while not actually helping constituents, and I’d like to go into further detail on a few of them. In 2019, 38 million individuals participated in the Supplemental Nutrition Assistance Program (SNAP/ food stamps). Food stamps help many Americans put food on the table for themselves and their families. Unfortunately, SNAP serves to be a liability more than a beneficiary. SNAP forces individuals to spend a specific amount of money on a certain amount of palpable items under said plan, forcing
people to be dependent, and become tethered by, government restrictions. The government’s blanket plan often isn’t what’s best for each family, and because SNAP is carried out by each individual state, not everyone receives adequate benefits, depend-
“Ultimately, to allow all individuals an equal opportunity, we must provide the ability to make individual economic decisions without financial burden for all people alike.” ing on each state’s rules. The cost of food (and purchasing power parity) varies on a state-to-state basis, and each family (depending on age and nutrient requirements) needs different amounts and types of food. Each family deserves the right to make decisions for themselves, as they obviously understand their needs better than the government. The U.S. Department of Agriculture funds these food stamps across the country. 80% of their budget goes towards the Food and Nutrition service, which mainly comprises SNAP. In a time when our National Debt is an astronomical 27.4 trillion and growing, government spending must be rationed. I would like to scrutinize something Milton Friedman championed: the Negative Income Tax (NIT). In simple terms, NIT gives tax credit to those below a certain income, in lieu of them paying taxes. Ideally, it would replace Temporary Assistance for Needy Families, SNAP, Supplemental Security Income, and the Housing Support Program. This would lead to a net positive revenue gain for the government due to the removal of hefty administrative costs. The tax credit received would be determined by two
Vol. XXXIII, Issue XI
