Posted on 12/21/2013 6:39:09 AM PST by Kaslin
The welfare state is a nightmare.
Programs such as Medicaid are fiscal catastrophes. 
The food stamp program is riddled with waste. The EITC is easily defrauded, even sending checks to prisoners. And housing subsidies are a recipe for the worst forms of social engineering.
The entire system should be tossed in the trash.
But what’s the alternative? Some libertarians argue that we should eliminate the dozens of Washington programs and replace them with a government-guaranteed minimum income. I address this issue in an essay for Libertarianism.org.
Some libertarians argue that the state should provide a minimum basic income, mainly because this approach would be preferable to the costly and bureaucratic amalgamation of redistribution programs that currently exist. It’s hard to disagree with the notion that the current system is a failure. The Cato Institute’s Michael Tanner has produced a searing indictment of the modern welfare state, pointing out that more than $1 trillion is spent every year on redistribution programs for the ostensible purpose of alleviating economic hardship, yet (or more likely as a result) the poverty rate is at an all-time high. Perhaps one reason poverty remains high is that such programs make leisure more attractive than work, as painstakingly illustrated in a study produced by Tanner and Charles Hughes. Moreover, welfare programs create very high implicit marginal tax rates, making it very difficult for poor people to improve their living standards by engaging in additional productive behavior. It’s almost as if the system was designed to create permanent dependency.
In other words, it seems that nothing could be worse than the current system. And if you want more evidence, here’s a very powerful video on the failure of the modern welfare state.
But what about the idea of trashing what we have today and instead offering everyone some sort of basic income? As I noted in my essay, there are “…some very iconic libertarian figures who support at least some version of their approach, including Milton Friedman, Friedrich Hayek, and Charles Murray.”
I agree, but only sort of. I like the idea of radical reform, but I think there’s a better road to Rome. It’s called federalism.
The bottom line for advocates is that anything would be better than the current system, so why not try something new? They’re right, but there’s actually a better way of approaching the issue. Why not take all income-redistribution programs, put them into a single block grant, and then transfer the money – and responsibility – to state governments?
Here’s my argument for decentralization and federalism.
In an ideal world, the block grant would gradually diminish so that states would be responsible for both the collection and disbursement of all monies related to welfare. But that’s a secondary issue. The main benefit of this federalist approach is that you stop the Washington-driven expansion of the welfare state and you trigger the creation of 50 separate experiments on how best to provide a safety net. Some states might choose a basic income. Others might retain something very similar to the current system. Others might try a workfare-based approach, while some could dream up new ideas that wouldn’t stand a chance in a one-size-fits-all system run out of Washington, DC. And as states adopted different systems, they could learn from each other about what works and what doesn’t work. And since it’s easier to influence decisions that are closer to home, taxpayers at the state level almost certainly would have more ability to impact what happens with their money.
And here’s the bottom line on why a federalist approach is the libertarian solution to the welfare state.
Last but not least, I’m just a policy wonk, but I think the federalism strategy also has political appeal. As just noted, it worked with welfare reform. And I suspect a lot of non-libertarians and non-conservatives will intuitively understand that you’ll get better results if you allow diversity and experimentation at the state level.
P.S. There would be some bad news if we decentralized the welfare state. It could mean an end to the Moocher Hall of Fame.
P.P.S. Replacing the welfare state with a (hopefully shrinking) block grant only addresses the problem of “means-tested” programs. If you also want to solve the problem of old-age entitlements, that requires Medicare reform and Social Security reform.
After the civil war what should be done to resolve the liberal problem?
Count Deacon Red IN! ! ! ! !
The only programs that should be turned over to the states and funded with block grants are Medicaid and Medicare.
All other poverty programs should be abolished.
How about ending ALL entitlements, subsidies, benefits and the like for both individuals and corporations?
Are the American People ready to go back to independence and self-reliance and shed the tyranny of government dependence taking the federal government back down to 3-5% of the GDP making it mostly defense-oriented and abolishing almost all the cabinet posts and the “administrative state”? That would truly be God’s miracle in these last days.
I say a flat tax for EVERYONE-10%. Then congress should meet every year to argue what the minimum income should be for those that can PROVE they have worked 2000 hours the past year thru paycheck stubs. Replace the Food Stamp program with free rice and beans-a complete protein. No more obesity.
Those that can’t/won’t get nothing-life is tough. In the cities the only new government jobs could be 2-3 four hour shifts as Guardian Angels so people like me can go out. Pay them the minimum wage and give them the hours credits toward the 2000. The all have cell phones so communication with cops won’t be a problem.
If you are talking about Medicare for example, I wonder if you realize that everyone that works, or has worked is paying for Medicare and if you are retired and on Social Security you still pay for it.
“I say a flat tax for EVERYONE-10%.”
Both the Torah (that’s the Bible for those of you in Rio Linda) and non-collectivist economists say that a max of 20% tax burden is the best. I consider anything higher to be criminal. If the Feds could tax a max of 10% and the States and cities no more than 10% I could handle that.
I call it the Simple Tax because there are no regs to comply with, no deductions, or credits or other crap. It’s just simple.
“Replace the Food Stamp program with free rice and beans-a complete protein. No more obesity.”
Yeppers. That would be SUCH a popular program! Be sure it is brown rice (for the nutrition) and the beans of your choice - kidney, black, pinto, etc. - so at least it can be said that one has choices!
“I say a flat tax for EVERYONE-10%.”
Yes, everyone including all companies, corporations, and those who use the tax loopholes to get out of paying.
Reduce the tax code to one line: “All individuals, companies, corporations shall pay an annual 10% Federal tax with absolutely no exemptions.”
Of course. It’s all bankrupt. If we had to pay up on what we owe to everyone the last thing we’d be worrying about is trying to fund those two scams.
Yes, they are scams and they are both bankrupt.
The only people who need to be paid are the vets who put their lives on the line for the rest of us.
Thanks Kaslin.
Oh please. No libertarian I know thinks it’s okay to redistribute wages or wealth. For heaven’s sake, Juan Williams recently identified himself as a libertarian on FNC. That doesn’t mean he is one.
Conservatives in the House....
Yeah, sure. ‘Don’t mean squat.
forced labor camps
I read someone’s argument about how a minimum income would solve poverty, because we eliminate the bureaucracy and supervision.
No one answered the question, “What do we do if they blow all the money and come back for more help?”
Seriously ???? Congress is wise enough to decide that for everyone?
Show me where that is in the constitution.
I am 100% with you on the 10% flat tax- the government meets to decide how to spend ONLY that- and that is ALL they can spend.
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