Thursday, May 11, 2006

Quantifying the Welfare State

How big is too big?

There is a new book by Charles Murray called "In Our Hands: A Plan to Replace the Welfare State" that actually lays out all the programs under the welfare state in the United States. The big deal about this book is that he is calling to replace all of the specific income transfer programs by giving everyone $10,000. Eg no applying for this or that or qualifying or standing in the welfare lines (i see you standing in it everytime) or lobbying your special interest politician. Just give everyone who makes less than upper-income levels the $10k.

Most of the reviews of this book that I have seen say that even Mr. Murray doesnt take this plan seriously and that the whole point of the book is to simply show how big and complex the welfare state has become and to start a call for simplifying it if not just overtly dismantling it.

Welfare "as we know it" was supposed to have ended under the Clinton Administration with the reform of the Aid to Families with Dependent Children program. In fact welfare programs have gone up like everything else under Bush II, welfare to the tune of 13% annually.

Welfare currently costs $1.4 trillion of the federal government's $2.3 trillion dollar budget, these programs according to Murray include:

Social security (an oxymoron given its precarious state)
Workers' compensation
Unemployment insurance
Supplemental security income
Temporary assistance for needy families
Earned income tax credit
Women, infants, children (WIC) vouchers
Food stamps
School lunch assistance
Low-rent public housing
Agriculture price supports
Community development block grants

Of course the idea of cash payments for the non-rich was proposed 40 years ago by Milton Friedman and his negative income tax.

The point is is that the state is now 35% of our national income, 90% of this occuring since the misguided government build-up response to the Great Depression in the 1930s. It is an old axiom that once a government program starts it never goes away.

Thank you to Mr. Murray for revisiting the need to revisit the welfare state. If we're going to have it at least lets do so efficiently, with cash. You can EFT mine direct.