Welfare
Provide a Helping Hand and Create More Jobs
“The capitalist economic system is the most efficient economic system known to man, but it is not perfect. We are human beings first and capitalists second.” – Roger Thoney.
The fundamental purpose of economic activity is to distribute the basic necessities of life – food, clothing, shelter, healthcare, etc. – among a population of people. Poverty results from unemployment and the cost of living being too high and is a sign that the economy is not working efficiently. Someone somewhere will be left out because of inefficiency, like losing in a game of musical chairs, so there is a humanitarian requirement for providing some assistance.
The best thing we can do to help those without a job is to try to make the economy more efficient by reducing the cost of living and the cost of doing business. This will spur additional job creation and enable one to buy more with the money he earns. The next best thing is to provide a helping hand until the unemployed person can find a job.
Providing low-cost loans to buy basic necessities – food, clothing, shelter, and healthcare – is how we can provide a helping hand. In addition, we can provide assistance for training and job search. Much of this is already being done, except that our welfare programs are handout-based rather than loan-based.
The major problem with a handout-based system is that it creates an incentive not to work. If I am given a package worth $10/hour with healthcare, why would I want to work for $8.00/hour without healthcare benefits? It would not be economically rational for me to do this. Providing financial assistance in the form of a low-cost loan eliminates this “irrationality to work” and provides a smoother transition from welfare to work.
This condition of “irrationality to work” also works to keep me trapped in poverty. If I am being given a package worth $10/hour and take a job paying $12/hour, then I will be working for a net $2/hour because I will lose the $10/hour handout. In order for me to net the $10/hour package for my labor that I was being given, I would have to take a job paying $20/hour. If I cannot get a $20/hour job because my skills are not sufficient or because there are not enough $20/hour jobs available, then it is economically rational for me to continue taking the handout.
This is the insidious nature of handout-based welfare systems. They work to keep people trapped in poverty. Add to this an increasingly inefficient economy, the result of a continually increasing cost of living and cost of doing business (inflation), and the number of people trapped in poverty grows.
Handout-based assistance is the choice of Marxist revolutionaries because it helps promote the very condition of poverty that Marxists use to promote class envy. Marx-based policies make the economy more and more inefficient, resulting in more people living in poverty. Handout-based welfare programs keep them there, and the Marxists’ power base grows.