Welfare Must Be Cut for the Good of the Poor

The US government is frequently criticized for not reaching the EU’s levels of unhindered handouts and socialization of industries. Proponents of government control for the common good hold two contradictory principles at the same time without even recognizing the tension. They first believe that the highest role of any government is to promote the welfare of their own people and of the other countries in the world, while also believing that governments have a responsibility to provide an ever increasing range of services to people just for existing. While the desire to give more resources to people in need often comes from genuine care, it can actually make the poor, both domestically and internationally, worse off. Without even getting into the vast range of productivity advantages that freer countries have when compared with more socialist nations, countries with luxurious benefits for their citizens are making both themselves and other nations worse off. While intended as a sympathetic patch to poverty, the more these benefits diverge from what could be earned through work, they divert the poor from their highest long-term potential and incentivize people who could be improving their home countries to emigrate and reap the rewards of welfare. The most sympathetic rule for navigating both welfare and immigration policy is to cut out the depths of poverty while recognizing the proven tendency of welfare to enslave in the long term.

Welfare in America has been one of the single greatest enemies of prosperity and family structure for poor communities. When the minimal safety net of the past was eschewed in favor of a more expansive welfare program in the 1960s, incentives for the poor were so damaged that a perpetual cycle of poverty was created. Rather than merely stepping into situations that were already needy, the welfare state multiplied the number of broken families. Individuals doing cost benefit calculus between slaving away in a factory or not working at all for only marginally less, typically ended up creating a worse situation for both children and parents. The ever present nature of government support so distorted the short term payoffs of working that it made it almost impossible for people to see the long-term trajectory they could have had if they had worked. Millions of people who otherwise would have worked were given an all too tempting option to step back from responsibility while simultaneously hurting themselves and their children for decades. The problem compounded even more as children from these unstable situations had a low chance of ever escaping the welfare cycle. Welfare dependency thus perpetuated itself while the amount of tax revenue per citizen decreased. The more comfortable a welfare-fueled life is, the harder it will be for people to turn it down. For even the most principled citizen with low earning power, it would be difficult to find motivation to work for what they could have for free. Government welfare is a bait and trap that has enslaved generations.

The idea that sharing resources ad infinitum can create flourishing has already damaged most of the world’s developing economies, both through slowing down their development and taking away their best and brightest citizens. Welfare that sends resources to countries often allows the government to hold power over the people in distribution. Governments that are already poor at managing their limited resources do not gain any administrative skill when given more. Rather, the same patterns of nepotism and inefficiency arise. Poor countries often do not suffer from a lack of natural resources or ability, but rather from a set of institutions that limit growth. This has been proven many times when vast donations are given that quickly dissipate and the citizens are left worse often than they were before. High levels of welfare in more developed countries present a siren song to those who find it too difficult to develop their own nation. The more extreme that the welfare benefits given by western countries are, the longer it will take for poor countries to develop. The incentive to immigrate and receive a better life is so high that western countries are swamped with people on welfare, and the poor countries have lost much of the core of their workforce. While charity for poor countries is necessary, it must be undertaken with knowledge that material resources without anything else possess the ability to keep people in cycles of poverty.

Keeping a thin social safety net to catch people in times of dire trouble is all but necessary for a government that taxes its people, but the more the purpose of welfare is forgotten, the greater a danger it poses to society. A welfare system too generous can destroy the lives of a nation’s poor while destroying the economy of other countries. The trade-offs that are presented to people have dire consequences for whether they choose to develop themselves. What seems like sympathy can create a far worse outcome than even an unrestricted free market. Private groups and religious organizations that took care of the poor in the past feel the urgency of their burden lifted off their shoulders by the state, all while the poor are given standardized care that fails to understand their unique situation. Before any expansion to welfare benefits is added, the lessons from the past must be internalized and leaders must ask whether their attempt at help will only deepen the problem. Our current welfare system must be pared down to create the conditions that are truly best for our own and foreign poor.