Benjamin Franklin On Incentives

    Do not think about, write about or deal with  human behavior without determining the effects of incentives. It’s not their money, of course they’ll waste it.

    Wherein we see the erosion of productivity by, a) taking money from the productive, and, b) paying people not to work. Or, as it’s known in politics, compassion.

How Much Longer Can US Afford To Be a Welfare Nation?
Dave Jolly Filed

If you’re the recipient of any form of welfare, you mostly likely see it as a life saver and the only thing keeping you from ending up destitute and homeless. But how long can the US continue to pour billions of dollars into the many welfare programs?

With so many different types of welfare programs, which include SNAP (what used to be called food stamps), unemployment, housing and other programs, it’s been difficult for anyone to know exactly how much taxpayer money is being spent every year.

Thanks to the University of California at Berkeley Labor Center we may have an idea of just how much we are spending each year on welfare programs. Their study title, The High Public Cost of Low Wages: Poverty-Level Wages Cost U.S. Taxpayers $152.8 Billion Each Year in Public Support for Working Families state:

    “Even as the economy has at last begun to expand at a more rapid pace, growth in wages and benefits for most American workers has continued its decades-long stagnation. Real hourly wages of the median American worker were just 5 percent higher in 2013 than they were in 1979, while the wages of the bottom decile of earners were 5 percent lower in 2013 than in 1979. Trends since the early 2000s are even more pronounced. Inflation-adjusted wage growth from 2003 to 2013 was either flat or negative for the entire bottom 70 percent of the wage distribution. Compounding the problem of stagnating wages is the decline in employer provided health insurance, with the share of non-elderly Americans receiving insurance from an employer falling from 67 percent in 2003 to 58.4 percent in 2013.”

    “Stagnating wages and decreased benefits are a problem not only for low-wage workers who increasingly cannot make ends meet, but also for the federal government as well as the 50 state governments that finance the public assistance programs many of these workers and their families turn to. Nearly three-quarters (73 percent) of enrollees in America’s major public support programs are members of working families; the taxpayers bear a significant portion of the hidden costs of low-wage work in America."

    This is the first report to examine the cost to the 50 states of public assistance programs for working families. We examine working families’ utilization of the health care programs Medicaid and Children’s Health Insurance Program (CHIP), as well as their enrollment in the basic household income assistance program Temporary Aid to Needy Families (TANF). Both of these programs operate with shared funding from the federal government and the states, and in this report we also examine the costs to the federal government of Medicaid/CHIP and TANF, as well as the Earned Income Tax Credit (EITC) and the food stamps program (Supplemental Nutrition Assistance Program, or SNAP). Our analysis includes only the cash assistance portion of TANF, and it does not include costs for state Earned Income Tax Credits, child care assistance, or other state-funded means-tested programs. Overall, we find that between 2009 and 2011 the federal government spent $127.8 billion per year on these four programs for working families and the states collectively spent $25 billion per year on Medicaid/CHIP and TANF for working families for a total of $152.8 billion per year. In all, more than half—56 percent—of combined state and federal spending on public assistance goes to working families.”

Note that they focused on working families receiving some form of government welfare. They did not include the millions of non-working individuals who are receiving many of the same benefits and even more. We have no idea of how many billions of dollars are being spent on them, but from everything I’ve read of late, it would be safe to say that the figure is far greater than the $152.8 billion.

Don’t forget that there are millions of Americans on Social Security disability. They often receive other assistance including medical, housing, education and even utility help. Adding it all up it would be safe to say that the overall cost of government welfare is well over $500 billion a year and growing more every year.

But government welfare is more of a trap than a help. The more welfare someone receives, the harder it is for them to find a job that will pay them enough of a wage to provide for their needs and to cover the costs of all of the welfare benefits they lost. I know people who say that they would have to find a job paying well over $15 an hour in order to make it worth their while to actually get off of welfare and this is the argument that many use for raising the minimum wage to $15 an hour.

Benjamin Franklin warned us nearly 250 years ago about the dangers of welfare when he wrote:

    “In my youth I traveled much, and I observed in different countries that the more the public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the more they did for themselves, and became richer. There is no country in the world where so many provision are established for them (as in England); so many hospitals to receive them when they are sick or lame, founded and maintained by voluntary charities; so many almshouses for the aged of both sexes, together with a solemn general law made by the rich to subject their estates to a heavy tax for the support of the poor. Under all these obligations, are our poor modest, humble, and thankful? And do they use their best endeavors to maintain themselves, and lighten our shoulders of this burden? On the contrary, I affirm that there is no country in the world in which the poor are more idle, dissolute, drunken, and insolent. The day you passed that, you took away from before their eyes the greatest of all inducements to industry, frugality, and sobriety, but giving them a dependence on somewhat else than a careful accumulation during youth and health, for support in age or sickness.”


  In other words, give people free stuff, they’ll stop working: Stop giving them free stuff, they’ll work. This concept is lost on the “rescuers.”

    “In short, you offered a premium for the encouragement of idleness, and you should not now wonder that it has had its effect in the increase in poverty. Repeal that law, and you will soon see a change in their manners. Saint Monday and Saint Tuesday will soon cease to be holidays. Six days shalt thou labor, thought one on the oldest commandments long treated as out of date, will again be looked upon as a respectable precept; industry will increase, and with it plenty among the lower people; their circumstances will mend, and more will be done for their happiness by inuring them to provide for themselves than could be done by dividing all your estates among them.” [The Real Benjamin Franklin: Part II: Timeless Treasures from Benjamin Franklin, Prepared by W. Cleon Skousen and M. Richard Maxfield. National Center for Constitutional Studies, 2008, Pp 453-4.]


    For those liberals who are unacquainted with welfare recipients, I have heard many times, from these recipients of assistance,“I’m not gonna work for chump change.” With an attitude like that, government programs will pick up the slack.

At the rate Obama and other liberal Democrats are going, over half of the US population will soon be receiving some form of government welfare, making them all slaves to an ever increasingly socialistic nation. We need to take a good look at the current programs and start making more Americans work for the welfare they receive. Those that are able to do any kind of work, whether physical or office type of work, start requiring them to work a certain amount of hours that corresponds to the benefits they are receiving. Many of them will feel better about themselves for actually working and contributing and the truly lazy ones will fall off of welfare and save us billions. Besides the savings of our tax dollars, in the long run it would help boost the nation’s economy. In the long run, it’s a win-win situation.


     Liberals love the poor, that’s why they keep making so many of them.

Government Job or Respect–Which’ll It Be?
Cheerio and ttfn,
Grant Coulson, Ph.D.
Author, “Days of Songs and Mirrors: A Jacobite in the ‘45.”
Cui Bono–Cherchez les Contingencies


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