Sunday, December 06, 2009


I will start with welfare since it promises to be the most controversial. Let me begin with what is wrong with the existing welfare system. Putting it simply, people can make more money on welfare than they can with a low paying job so why would anyone go out and work? It bothers me a lot to see some dead beat sitting at home all day watching his flat panel TV, listening to his fancy stereo and driving a better car than I do. To know that I'm paying for him to be able to do that is just rubbing salt in the wound. What is wrong with this picture? The other sad story is that of the single mother who gets paid money to have babies. It has almost become a status symbol for these girls to have more and more children who will be raised without fathers and the cycle of poverty is perpetuated from generation to generation. To make it worse, our welfare system is fraught with fraud. It is not uncommon for some people to be sitting at home collecting two or three welfare checks. The present welfare system was the brain child of President Franklin Roosevelt in the 1930's. While his intentions were probably admirable, his methods were fatally flawed and all he ended up doing was aggravating the problem. The cost of welfare has now grown to more than $430 billion and the welfare roles are growing, not shrinking.

My attitude towards welfare has evolved over my life time. When I was younger I was of the opinion that the government had no place in the welfare business and they should get out and leave charity to religious and other charitable organizations. Most Americans are quite willing to contribute to charitable organizations and these organizations are very good at keeping people from starving. As I got older I came to the conclusion that there is really no need for anyone in America to go hungry. We are a wealthy nation and very capable of feeding our citizens, it just has to be done in a way that would give people a strong incentive to get off welfare and get back to work. I would model it much like the church does their welfare and make people work for their money with some exceptions for the little old lady who really can't work. And then one day I was discussing the details of my plan with Brandon and he told me that he really thought society should be like Star Trek where everyone has their basic needs met and they don't have to work. That was a major shock to me because Brandon is a registered Libertarian and that was definitely not a Libertarian view point. The more I thought of it however the more I decided, "why not?". Why can't we feed everyone and take care of their basic needs so if someone doesn't want to work he doesn't have to? The trick is to do this and still leave people with a strong incentive to work and improve their circumstances. Here is how I would do it.

A human being actually needs very little to survive, food, water and shelter. Nothing else and I would give them nothing else. Just as with my health savings account, I would give every man woman and child a "basic subsistence account" (BSA for short) and a debit card that can draw on this account. The card could only be used to buy food. You would be restricted as to what and how much you could buy with this card. You would be allowed $25 a week to buy very basic groceries such as:

Canned vegetables (not fresh), milk (do I let them have fresh milk or only powdered?), hamburger (no steaks or roasts), breakfast cereal (hot or cold), eggs, bread and various spreads for sandwiches (butter, jam, peanut butter, honey etc.).

This would not give you a very glamorous menu but it is more than enough to keep from starving.

The housing allowance is trickier but I think I would budget the cost of renting a bedroom in the average US city. Yes, this would prevent people from living in the more expensive cities (like San Diego) but if you want to live in those cities perhaps you could get a job. Of course two or three people could get together and pool their allowance for a two or three bedroom apartment. The government (or better yet, private industry) could build low cost housing complexes tailored for people who don't want to work. I envision cheap trailers or mobile homes much like what FEMA uses in a disaster area. They would be small and only one room.

Finally you would also have an allowance for minimal utilities, gas, water and electricity. This would not have to be payed from the BSA since the utility company could charge the first few kilowatt hours (or gas equivalent) for each account to the government making it free for the account holder.

Children of course would not receive an allowance for housing and utilities until they reached eighteen or until they are legally declared an emancipated minor. They would receive a reduced food allowance based on their age.

My thinking is that if someone chose to live solely off of this basic subsistence allowance they could do so but they would not have a car, TV or other luxuries unless they decided to get a job. The beauty is that if someone really wanted to, they could live off of their BSA and spend all of their time creating works of art, writing a book or inventing things. It would give many people a chance to develop talents that might otherwise remain dormant. I believe this could be a great benefit to society.

Of course it is my belief that most people will want more than just a subsistence existence and will get an education and prepare for a rewarding career but what a comfort it would be to know that if worse came to worse, they would always have their BSA accounts to fall back on and how nice would it be to not have to worry about room and board while you're a college student. Of course, if you do have a good job (or even a bad job) you can still use your BSA to subsidize your grocery shopping and your housing expenses.

So what will this all cost you ask? Let's make the follow assumptions for costs:

food $25 per week or $1,300 per year
housing $400 per month or $4,800 per year
utilities $75 per month or $900 per year

total costs = $7,000 per person

food $15 per week or $780 per year

If there are 200 million adults and 100 million children in America then this will be a total of $1.48 trillion. I know that is three times what we pay today for welfare but since two thirds of Americans pay taxes, their money ($1 trillion) goes right back to them so the net tax burden will be $480 billion, roughly the same as it is today. The big advantage is that I believe most of the people who are on welfare today will not want to give up their fancy cars and color TV's so they will go out and get a job.

On the average it takes a man about 200 strokes to shave.


KarinC said...

Hum. You have put a lot of thought into this topic. I have a brother on welfare.Its sad, but he doesn't want to lose the benefits of living on welfare. In many ways living on Welfare limits him.
Keep up the good thoughts.
P.S. I am partial to oatmeal for cereal; boxed cereal is so expensive.

Peter and Mandy said...

Interesting....I like the working type of people or else I'd be out of a job. If everyone stayed home, nobody would put their children in private school and well then I'd be jobless. And I really like my job too. I also enjoy living in San Diego.