How To Serve The Needy At A Fraction Of The Cost

Our nation's entitlement programs, from Social Security to Medicare to ObamaCare to dozens of welfare programs such as Medicaid, are all based on simple, late-19th century tax and redistribution ideas. Politically, we will never be able to solve the entitlement crisis by simply trying to cut people's benefits.

As I discuss in my new book, "America's Ticking Bankruptcy Bomb," the only politically viable solution is fundamental, structural reform that would modernize the systems to rely instead on capital, labor and insurance markets, with transformed incentives that would lead them to contribute to economic growth rather than suppress it.

Through such reforms, we can achieve all the liberal social goals of those programs far more effectively, serving seniors and the poor far better, at just a fraction of the costs of the current tax and redistribution framework. That would make the necessary reforms politically viable.

A real-world example is the 1996 reform of the old, New Deal era, Aid to Families with Dependent Children (AFDC) program.

The old program was based on a federal matching funding formula that paid each state more the more the state spent.

Welfare reform changed the incentives for the state bureaucrats by instead providing the federal funding through finite federal block grants that left states themselves paying for higher costs while fully enjoying any innovative savings. The incentives for the poor were transformed by requiring work from the able-bodied for the benefits.

Two-thirds left the welfare rolls of the old program, earning roughly 25% more in total income by working, which reduced poverty. And taxpayers saved more than half the costs of the old program in real dollars based on prior trends.

I am not confident that we will ever solve the entitlement problem without a complete collapse of the government and its ability to pay.

Here’s why: I have a friend who considers herself a conservative. She rails against the “entitlement mentality” and hates “socialized medicine”. She listens to Rush. She watches Fox. She supports Sarah Palin or Michelle Bachmann or Rick Santorum next year. She votes GOP.

Two of her own three children are severely disabled (they really are), and she’s paid to take care of them by the government.
Their health care is covered by the government.
Their day-to-day expenses are paid for by the government.
They’re in school until they are 21, paid for by the government.

If you want to raise your blood pressure, ask how she’s different. The answer you’ll get is that her case is “different”. Because her kids really “need” that money, those services, and all that.

She’s the problem. There are a lot of her. Millions of her. Maybe tens of millions of her. And many of them call themselves conservative.

And until there is literally no money to pay her and her kids and the millions like her, there can be no solution.

She’s the problem. There are a lot of her. Millions of her. Maybe tens of millions of her. And many of them call themselves conservative.

And until there is literally no money to pay her and her kids and the millions like her, there can be no solution.

I personally don't view people like your friend as the problem with entitlements. Although one can make the case that the states - and not the federal government - are a better bet to administer benefits to those truly in need.

Many believe this nation has an ethical and moral obligation to take care of the truly needy - the very young, the very old and the disabled - who cannot take care of themselves. The problem with entitlements is that healthy, able-bodied men and women find welfare and food stamps a more attractive lifestyle than working. Add to that the decimation of the nuclear family, out-of-wedlock pregnancies, and all of the other wonderful social ills wrought by liberalism.

There was a time when people like the children you describe would have been institutionalized. A moral and just society should provide for those truly in need. There is no reason that private charities, in conjunction with government funding, can't address this problem. IMHO

She’s the problem. There are a lot of her. Millions of her. Maybe tens of millions of her. And many of them call themselves conservative.

You're correct and could have added that it's not just a black thing, I know of too many white examples.

Sure, there are needy people but "deserving" people? Why does anyone "deserve" my money? There's no constitutional basis for government welfare of any kind but that has never concerned the liberal mind.

The extended families or the charity of Americans or religious organizations will fund the truly needy. It’s who we are. It’s what America is.

STOP SPENDING! DEFUND all socialist collectives, foreign and domestic. Give “free” citizens back the $ they were forced to put into these socialist programs and SHUT THEM DOWN.

Legislatures (state and federal) can be part-time jobs with 1/10th pay, NO retirement, NO perks, NO insurance. Get a job. Pay for your own crap, you POS politicians.

“...That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness...”

ALTER it.

Over 60. Yep.

1) What we gotta get to is you have to produce more than you consume. 2) Other people don’t owe you a living. 3) Your problems are yours to deal with, not mine. 4) What I give willingly, is not the same as what you extract from me by majority rule, because majorities can be wrong. 5) Jesus said “the poor will be with you always.” 6) It’s not greed to want to keep for yourself and your family what you have created. Greed is wanting what you have not earned.

Once we get those principles straight we can move forward.

She is most definitely part of the problem, and here's why: We (my husband and I) pay for our kids to go through school, pay for their clothes, pay for their food, their medicine (the parts that insurance doesn't pay for, and we work to provide our own insurance). You know, like people are supposed to do for their kids.

She and her husband pay for none of that. It isn't that she and her husband can't. But they don't, because the government will and does. Did you know that you can get certified to have the government pay for your child's nursing care? You'll get paid to care for your own child.

I support charity. I don't support robbery. It may be good to support people who have problems, but since when do we have to support every private family decision with taxes?

At the end of the day, why does anyone have the right to steal money from another person for their upkeep?

Legislatures (state and federal) can be part-time jobs with 1/10th pay, NO retirement, NO perks, NO insurance. Get a job. Pay for your own crap, you POS politicians.

They who feel the need for thrift in their private lives can extend those skills to their dealings with the public's money, imho.

Those who never have felt that need are not likely to be any more careful with our money than their own.

The ostensible supporters of the Constitution, like the ostensible supporters of most other governments, are made up of three classes, viz.: 1. Knaves, a numerous and active class, who see in the government an instrument which they can use for their own aggrandizement or wealth. 2. Dupes—a large class, no doubt—each of whom, because he is allowed one voice out of millions in deciding what he may do with his own person and his own property, and because he is permitted to have the same voice in robbing, enslaving, and murdering others, that others have in robbing, enslaving, and murdering himself, is stupid enough to imagine that he is a “free man,” a “sovereign”; that this is “a free government”; “a government of equal rights,” “the best government on earth,” and such like absurdities. 3. A class who have some appreciation of the evils of government, but either do not see how to get rid of them, or do not choose to so far sacrifice their private interests as to give themselves seriously and earnestly to the work of making a change. - Lysander Spooner

Legislatures (state and federal) can be part-time jobs with 1/10th pay, NO retirement, NO perks, NO insurance. Get a job. Pay for your own crap, you POS politicians.

ALTER it.

She and her husband pay for none of that. It isn't that she and her husband can't. But they don't, because the government will and does.

At the end of the day, why does anyone have the right to steal money from another person for their upkeep?

I respect what you're saying, but there are a lot of families that would be devastated financially if they had three severely disabled children. Those are the families I'm thinking of. Means testing should be required before the government starts handing out money.

In one family I know, a brother takes care of his severely handicapped sister. Their elderly mother cannot take care of her. The brother does not work, he is paid to be a care-taker, though he can clearly earn more on the outside. His wife works and they have a normal life. I believe it's better for the brother to take care of his sister rather than her be in a state institution.

As far as 'stealing money for their upkeep' - I believe that programs helping the truly needy, if run properly and not abused, are in fact a good way to provide for them.

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