The government, Milton Friedman and others argued, told the poor: make more money and we

will take away your free housing, food stamps, and income support. People are rational,
Friedman said, so they will not work for long if they get nothing or next to nothing for it. The big
difference between the Malthusian conservative critics of social insurance in the early nineteenth
century and the Chicago critics of the 1970’s is that the Chicago critics had a point: Providing
public support to the “worthy” poor, and then removing it when they began to stand on their own
feet, poisoned incentives and was unlikely to lead to good outcomes. And so, from 1970 to 2000,
a broad coalition of conservatives (who wanted to see the government stop encouraging
immorality), centrists (who wanted government money spent effectively), and leftists (who
wanted poverty alleviated) removed the “notches” from the social-insurance system. Presidents
Jimmy Carter, Ronald Reagan, George H. W. Bush, Bill Clinton, and even George W. Bush and
their supporters created the current system, in which tax rates and eligibility
thresholds are not punitive disincentives to enterprise.[8]

UK Conservative Party’s long-term economic plan:

We're ensuring the welfare system provides a safety net for those in need - and
rewards the willingness to work - by:

 Capping benefits - so no out-of-work household can claim more in benefits than the average
family earns in work
 Stopping benefits rising faster than wages - to ensure that it always pays to work
 Introducing Universal Credit - so it always pays more to be in work than on benefits

"I am for doing good to the poor, but I differ in opinion of the means. I
think the best way of doing good to the poor, is not making them easy
in poverty, but leading or driving them out of it."- Ben Franklin "The
democracy will cease to exist when you take away form those who are
willing to work and give to those who would not."- Thomas Jefferson

Rep. Paul Ryan, the Wisconsin Republican who heads the House Budget Committee:
“We need to do another round of welfare reform – not as an exercise to save money, but as an
exercise to save lives and to get people from welfare to work,”
A report by Ryan’s Budget Committee staff points out that the official poverty rate has inched
down by only about 2 percent in the last 50 years, despite hundreds of billions of dollars spent by
the government on welfare annually.

www.norden.org (Nordic council)

Universal rights
The social security net is central to the Nordic welfare model. It is rooted in the basic
principle of universal rights, i.e. everybody has the individual right to assistance from
the public sector if they are unable to look after themselves. As a point of departure,
these rights are the same for all, regardless of factors such as income and assets.
One crucial way in which the Nordic system differs from other welfare models is that
rights are not acquired on the basis of previous payments (e.g. national insurance
payments) or status (e.g. employment). Welfare is funded collectively via taxation,
and the individuals’ rights are not linked to their tax history.

Another central objective for the social security net is that public-sector support is
designed to facilitate the maintenance of a reasonable and decent standard of living.
As a result, the basic level of Nordic social benefits is high compared with other
countries.

www.irs.gov
Earned Income Tax Credit (EITC), which provides major financial incentives to work.

Emphasis turned toward personal responsibility and the attainment of self-sufficiency through
work.

Lawrence M. Mead's 1986 book Beyond Entitlement: The Social Obligations of

Citizenship argued that American welfare was too permissive, giving out benefit payments
without demanding anything from poor people in return, particularly not requiring the recipient to
work. Mead viewed this as directly linked to the higher incidence of social problems among poor
Americans, more as a cause than an effect of poverty:

[F]ederal programs have special difficulties in setting standards for their recipients. They seem to
shield their clients from the threats and rewards that stem from private society – particularly the
marketplace – while providing few sanctions of their own. The recipients seldom have to work or
otherwise function to earn whatever income, service, or benefit a program gives; meager though
it may be, they receive it essentially as an entitlement. Their place in American society is defined
by their need and weakness, not their competence. This lack of accountability is among the
reasons why nonwork, crime, family breakup, and other problems are much commoner among
recipients than Americans generally."[10]
There is an association between a parent's welfare dependency and that of her children; a
mother's welfare participation increases the likelihood that her daughter, when grown, will also be
dependent on welfare. The mechanisms through which this happens may include the child's
lessened feelings of stigma related to being on welfare, lack of job opportunities because he or
she did not observe a parent's participation in the labor market, and detailed knowledge of how
the welfare system works imprinted from a young age.[25] In some cases, the unemployment
trap may function as a perverse incentive to remain dependent on welfare payments, as
returning to work would not significantly increase household earnings as welfare benefits are
withdrawn, and the associated costs and stressors would outweigh any benefits. This trap can be
eliminated through the addition of work subsidies.[26]
25:
Antel, John J. (1992). "The Intergenerational Transmission of Welfare Dependency:
Some Statistical Evidence." The Review of Economics and Statistics 74:3, 467–473
26: Acs, Gregory & Toder, Eric (2006). "Should we subsidize work? Welfare reform, the
earned income tax credit and optimal transfers." International Tax and Public Finance, 14:3,
327–343.

Still, the scale of the challenge is vast. Emerging markets need only look to
the West to find a model to avoid. There, outlays such as pensions, jobless
benefits, welfare assistance, and health-care spending are entitlements
that, once granted, tend to grow, and are hugely difficult to roll back or trim
for efficiency. Just look at the charred hulks of cars on the streets of Paris,
where even minor reform proposals quickly run into protest and violence.
Welfare programs are also the powder for debt bombs. By 2030, 6.5 percent
of the advanced economies’ GDP will be taken up by the projected increase
in public pension and health-care spending alone, according to the IMF.
“There is no country that can continue to in-crease spending at this pace,”
says Carlo Cottarelli, the IMF’s head of fiscal affairs.
-Mac Margolis, newsweek

Night after night a stunned France watched on television as rioters -- mostly

teenagers and young adults from Arab and African families -- injured dozens of
police officers with rocks and bullets, killed at least one bystander, and torched
schools, community centers, and thousands of cars.
economic and social neglect of its large ethnic-minority population
More than anything, it's the welfare state that stifles job creation. European
governments tax businesses heavily to pay for welfare, unemployment, and health
benefits. Such taxes, including contributions by workers, account for 16.4% of
France's economy and 14.4% of Germany's, vs. only 6.7% in the U.S. On top of
that, governments saddle companies with rigid labor rules that make it difficult to
lay off workers or hire them on temporary contracts. "The first priority must be to
make the labor market more flexible," says Jean-Ren? Boidron, chief executive of
Cosmosbay, a Paris-based consulting group. Boidron says his firm would hire
more if it were freed from onerous regulations.
European governments could make the situation worse if they quell violence with
big doses of government spending. That would heighten the tax burden on
businesses, making them even less likely to hire workers. And while jobless
immigrants hardly live in luxury, benefits are good enough to deter many from
working. In Clichy-sous-Bois, Karim says he probably could find a job as a
chauffeur or construction worker. But he figures he'd earn less than he gets on
public assistance.
 -Bloomberg Magazine, 2005.
JOHN HUMPHRYS: How our welfare system has created an age of entitlement
By JOHN HUMPHRYS
UPDATED: 10:06 GMT, 8 August 2013


When Sir William Beveridge wrote his report 70 years ago arguing for the creation for
the welfare state he wanted to give the poor a hand up from the grim life they faced. But
a dependency culture has since emerged which provokes fury among politicians and
public alike. So is the nation ready for change?
Are we on the brink of another welfare revolution? In this thought-provoking article
BBC Radio 4 presenter JOHN HUMPHRYS talks to those affected and examines the
solutions on offer
The writing is spidery, the occasional ink blob suggesting an old steel nib that had seen better
days, and the grey unlined paper might have been ripped out of a cheap notepad. The title is
uninspiring too: 'Social Insurance and Allied Services'. This could be the work of a rather
sloppy civil servant, too junior to qualify for a secretary of his own, jotting down a few
thoughts that might one day impress his boss.
But when I took it from its dog-eared folder I felt like a Shakespearean scholar might feel
handling a rare first folio. Of all the documents stored away in the library of the London
School of Economics, none has had a greater impact on the way we live our lives than this.
There is scarcely a soul born in this country over the last 70 years whose life has not been
affected, one way or another, by what resulted from this scruffy piece of paper.
When it was officially published a year after these original scribblings it had a slightly
snappier title: The Beveridge Report. Its author, Sir William Beveridge, had said he wanted a
revolution and that’s what he got: the creation of the welfare state. What, I wondered as I
scanned the yellowing pages, would the great man have made of the way his revolution
turned out.

Our Shameless society: John Humphrys argues that the Beveridge Report has -
unintentionally - created a climate of welfare dependency. Pictured is the dysfunctional
Gallagher family from Channel 4's Shameless. Wayward father Frank is centre
His ambition was immense: to slay what he called the five evil giants of society. Want.
Disease. Ignorance. Squalor. Idleness. The first four may not have been slain but, given how
grim life had become in post-war Britain for all but the privileged few, their malign power
has faded. It’s the fifth he’d have a problem with today and the great irony is that so many
people believe that it was his own creation at least partly to blame.
Idleness takes two forms today, one enforced and the other voluntary. One is the result of
unemployment made worse by recession, spending cutbacks, growing competition from
abroad and a dozen other economic factors. The other is the predictable effect of a
dependency culture that has grown steadily over the past years. A sense of entitlement. A
sense that the State owes us a living. A sense that not only is it possible to get something for
nothing but that we have a right to do so. This, seventy years on from the Beveridge Report,
is the charge many people level against it.
I have spent the past year making a documentary for BBC2 in which I have tried to deal with
that charge. In the process I have talked to people who are desperate for a job – any job - and
to people for whom idleness is a lifestyle choice and are quite happy to admit to it. I have
talked to assorted academics who have studied the subject for decades and arrived at entirely
contradictory conclusions. I have been to the United States, where they had their own welfare
revolution a few years ago, and have witnessed some of its outcomes in the soup kitchens of
Manhattan. And we commissioned our own opinion poll to test the mood of the nation. Do
we still want the benefits system that the welfare state has spawned and if not … why not?

Author: Lord Beveridge wrote his report at a time when vast numbers of unemployed wanted
to find work, in contrast to modern times when there is little incentive to do so
Inevitably our opinions (our prejudices maybe) are influenced by our childhood. I was born
in a working class district of Cardiff called Splott. My father was a self-employed French
polisher and my mother had been a hairdresser and still managed to do the odd home perm in
our kitchen for friends and neighbours in between bringing up five children. We were often
broke but probably neither much better off nor worse off than most other families in the
street. All the parents seemed to work just as hard as my own – with one exception. The
father in question had lots of children and no job and nor did he seem to want one. He was
happy living on the dole. Because of that he was treated with contempt.
That was more than half a century ago. When I went back to my old neighbourhood we found
others like him. In the words of an old lady who lived opposite my house when I was born
and who lives there still: 'If they can get money without working, they will.' Times have
changed, she told me sadly, and the 'pride in working' has gone.
The statistics seem to suggest she may have a point: one in four people of working age in this
area are now living on benefits. But maybe that’s because there are no jobs to be had. I went
to the nearest job centre, a smart modern building where bright young staff smile a lot and
there are plenty of computer terminals to display what’s on offer. Last month there were more
than 1,600 jobs advertised in Cardiff.
The centre’s manager Rosemary Gehler agreed with the rather brutal verdict of my ex-
neighbour: 'There is undoubtedly less of a stigma to being on benefits and I don’t think
anyone would argue with that,' she told me. 'Benefits became fairly easy to access ... too easy
probably in some cases… and people taking them didn’t see themselves getting back into
work. That situation has built up over the years.'
Back in my old street I talked to Pat Dale, a single mother of seven children. She was most
indignant about the 'people who’ve never worked in their life… they don’t even know what a
job is'.
So when did she last work? Twenty years ago. The older children don’t have jobs either. The
problem, she says, is that the jobs on offer don’t pay enough. 'If I worked for the minimum
wage I’d get paid £5.50 right? That means I’d lose out on my rent benefits and I’d be
working for nothing. I think it’s disgusting. Honestly it is really, really disgusting.'
Her figures were slightly inaccurate – the national minimum wage is now £6.08 an hour - but
she’s right about losing some of her benefits, depending on how many hours she worked.
And that’s the problem. I came across it again and again as I travelled around the country.
On a pleasant housing estate outside Middlesbrough I met Steve Brown, as calm and mild-
mannered as Ms Dale was defiant and angry - but equally dependent on benefits and equally
unapologetic about it. He and his partner live with their three children in a comfortable,
rented semi. Their household income is about £20,000 a year without, of course, any
deductions for tax. Mr Brown told me that before he could take a job he’d 'have to sit down
with them and work it out whether it’s acceptable to go to work or not'.
I suggested that some people who work tor the minimum wage might do so because they
reckon working is better than not working. Had he considered that?
'No, no, no… not at all. I just don’t want to be going out to work for forty hours and missing
my kids if I’m only going to receive a few quid extra for it, d’you understand? I’d be missing
my kids growing up.'
I’m not sure I did understand, but then again I’ve never had to try living on the minimum
wage.
There are about 250,000 people in this country today who have been out of work for more
than a year and are claiming Job Seekers’ Allowance (JSA). The total number of unemployed
is now 2.57m. But that’s only the half of it. Literally. There are another 2.5m people who do
not work and claim sickness benefits of one sort or another.
That figure was much smaller until governments in the Eighties set about hacking back the
number of people on the dole by the simple expedient of transferring vast numbers of them
onto sickness benefits. So the dole queues grew smaller and the number of people on the sick
went through the roof. Now it works out at roughly one in eleven of the entire UK labour
force.
Britain isn't working: A queue outside a job centre in Bromley. There are 2.57million
unemployed - and a further 2.5million on sickness benefits
I talked about that to Dr Sharon Fisher, who left her native South Africa ten years ago to
practise in this country. Her surgery is in Tower Hamlets, one of the poorest boroughs in
London. She told me the system has been exploited and that is actually harming her patients.
'I tell some patients it’s actually not in their best interests to be off sick but sometimes they’re
really adamant. They say their previous doctor signed them off, or they’ve been off for a very
long time. They say: ‘What’s different now Doctor? Why aren’t you giving us the time off?’
As a clinician I know that the longer a patient is off sick, the lower the chance of them ever
returning to work.'
And what does she think of the statistics that say there are 2.5m people too sick to work?
Unbelievable, she says. Literally unbelievable.
Benefits crackdown: David Cameron has pledged to get tough on benefit cheats
David Cameron has another word for it. He says we’ve been conned. 'Conned by
governments' was the phrase he used at this year’s party conference. And not just by
governments, apparently, because he went on: 'It turns out that of the 1.3 million people who
have put in a claim for the new sickness benefit in recent years one million are either able to
work or stopped their claim before their medical assessment had been completed.'
So the long-term unemployed and people on sickness benefits make huge demands on the
welfare state. There’s one other group – a group that Beveridge did not specifically target
because it barely existed in his day. Single mothers. Today there are 590,000 lone parents on
out of work benefits.
Professor Paul Gregg of Bristol University calculates that the level of support a single mother
receives for a child today is about three times what it would have been twenty years ago. It
was raised, he says, in a deliberate attempt to reduce child poverty. But the other side of the
argument, he told me, is that 'the very creation of the safety net encourages people to exist on
it longer than they otherwise would.'
So we’re back, once again, to perverse incentives. When Beveridge wrote his report in the
1940s he saw a nation in which there were vast numbers of people who were desperate to
work if only they could get a job. Now there are many who have no incentive to get one
because they are better off on benefits.
Gavin Poole, its director, told me it shows there is something wrong with a system that
enables part of the population who could work to choose the option to live a life on benefits.
So does he want to force people to work? He preferred to talk about 'mentoring' and
'encouraging' people., but he conceded that if all else fails, some form of sanctions might be
needed.
So that’s it then? The solution is right there, staring us in the face. You cut the benefits and
people who don’t want to work will have no choice. It might be tough on them, but why
should hard-working taxpayers (every politician’s favourite phrase) have to work even harder
to keep others in their idleness – especially when we’re all feeling the pinch ourselves these
days?
It’s not as if every other European country takes the same approach.
I talked to a group of Polish building workers on the south coast, all of whom said they
couldn’t find work in Poland and it was impossible to live there on benefits. They told me
you can just about survive for one week on what the State pays out for a month. So they left
Poland several years ago, came here and have never gone back. But what happens in a very
rich country when the government decides the benefits system is too generous?
When Bill Clinton was President of the United States he said what no British politician would
dare to say: America would 'end welfare as we know it'. He declared a welfare revolution.
Instead of welfare, Americans would have 'workfare'. Instead of the State paying its citizens
to be idle, the citizen would have to find work. If they failed, the State would find something
for them to do. And if they didn’t like what was on offer – sweeping up leaves perhaps – then
that’s just too bad. No work … no welfare.
The first American state to raise the banner of revolution was Wisconsin and for a while
things looked good. Other states followed. The number of people on benefits dropped by as
much as 80 per cent. and the revolution took hold. Many British politicians beat a path to the
revolutionaries’ door and returned, having seen the light, with shining faces. That was fifteen
years ago. I went over to New York to see if the light is still shining as brightly.
'When Beveridge wrote his report in the 1940s he saw a nation in which there were vast
numbers of people who were desperate to work if only they could get a job. Now there
are many who have no incentive to get one because they are better off on benefits.'
The city’s welfare commissioner Robert Doar told me there had been no alternative to
workfare: 'Our system had developed a sense of entitlement in people who expected cash
benefits without having to do anything in return. The benefits without work were greater than
the benefits of going to work. We said: ‘We expect you to work’.'
Sound familiar? Elaine Hewitt, the manager of the Manhattan job centre told me what
happens if someone doesn’t want to do the job the city offers them or, in the official lingo,
'fails to co-operate with our guidelines'. That, she said, 'results in a denial'. And that means?
'No more assistance'.
If workfare has a godfather his name is Professor Larry Mead. He says the figures prove it’s
working. About 60 per cent. who were on benefits before it was introduced have taken jobs.
And what about the other 40 per cent? 'There is some debate about whether they are worse
off or not because they are not working and they are not on welfare, but it is still clear that the
overall economic effects of welfare reform are positive.'
To which the obvious answer is: not if you’re one of the 40 per cent. I talked to some of them
queuing outside the soup kitchens and 'pantries' of Manhattan where people go when there’s
nowhere else left. The manager of one, a fiery Irish New Yorker called Aine Duggan,
described the welfare reforms as an 'atrocity'. She said: 'The safety net has literally buckled
and given way under the need among families… We have used welfare reform as an excuse
to cut and cut and cut and to push more and more families out of the welfare system.'
Many of the people in her soup kitchen were professional men and women who lost their jobs
at the start of the recession and have become 'ninety-niners' – people who have passed the
period when they are still eligible for the most basic benefits. Now they’re on their own.
Elaine Huitt, an articulate, neatly dressed middle-aged woman told me her payments had 'run
out' more than a year ago. When her modest savings ran out too she’d had to sell her
television set and most of her jewelry and furniture and was reduced to sleeping on a mattress
on her kitchen floor. She has lunch at the soup kitchen seven days a week and a nearby
church has started serving free dinners as well. She told me: 'I can’t imagine how I’m going
to keep paying my rent or my phone. I’m scared. I’m just hoping for a miracle.'
Professor Mead was invited to Downing Street last year to talk about welfare reform. Since
then the coalition government has been putting some flesh on its own proposals. The plan is
to combine Job Seeker"s Allowance with other benefits into one personal allowance called
universal credit. As with workfare, the aim is to encourage the jobless, and particularly the
long-term unemployed, to get back to work.
Iain Duncan Smith uses tough language. 'This is a two-way street… We expect people to play
their part … Choosing not to work if you can work is no longer an option… We are
developing sanctions for those who refuse to play by the rules.'

Reformer: Tory Iain Duncan Smith has, the Work and Pensions Minister, pledged to tackle
welfare dependency in a complete overhaul of the benefits system
What Duncan Smith and every other politician knows, though, is that fundamental reforms to
the benefits system will come about only if there is the public will. It happened in the United
States because of what was called at the time 'moral panic'. The politicians detected that
taxpayers were no longer prepared to tolerate a system under which they worked hard to pay
the dues of those who chose not to. So what is the mood of this nation seventy years after
Beveridge?
The first conclusion from our Ipsos Mori poll would have gladdened the old man’s heart.
Fully 92% agreed that we must have a benefits system that provides a safety net for everyone
who needs it. Only a trifling 4% disagreed. In polling terms, that’s as close as you get to
unanimous approval.
But we got a different response when we asked whether people think the present system is
working effectively. Only two-thirds think it is. Even more think there are some groups of
people claiming benefits who should have those benefits cut. They were particularly
suspicious of people on sickness benefits: 84% wanted stricter tests to make sure they were
really incapable of working. They were pretty hawkish on housing benefits too: 57% said
people who get higher benefits because they live in expensive areas should be forced to move
into cheaper accommodation.
Of course public opinion changes. When a relentlessly rising benefits bill collides with the
national coffers running dry it would be surprising if the public mood did not turn sour. But
after a year of talking to so many people caught in the welfare trap against their wishes, I’d
like to think it was as simple as people like Professor Mead seem to suggest.
The problem is, for every claimant who makes you want to scream in frustration because
they’re perfectly happy to be living off the State, you meet another who makes you want to
weep because they are so desperate to find work. Any work. And can you blame youngsters
who can’t see the point of working if their parents have never bothered? I went to the City
Gateway charity which tries to get young people into apprenticeships and off benefits. I asked
a group of about two dozen who’d volunteered for training how many had a father or mother
in work. Not a single hand went up.
For every single mother pilloried by the tabloids for deliberately getting pregnant so she can
claim the benefits and live rent-free, you meet young women like Gemma who lives in
Knowsley, the Merseyside town where the number of single mothers is nearly twice the
national average. Yes, she got pregnant when she was still in school and, yes, when I first met
her she seemed to fit the stereotype. She got angry when I asked about her benefits and
stormed out of the interview.
But she agreed to come back and we talked at length. Her eyes filled with tears when she told
me she’d been doing well at school. Then she started taking drugs because everyone was
doing it and then she got pregnant and then she was 'trapped.' She didn’t look to me like a
tough young woman who’d set out to milk the system and was enjoying every minute of it.
She wanted a different life from the one she had, but she couldn’t see how to get there.
Trapped was the right word. How does a young woman with a small child and no
qualifications find a job in a depressed area that will pay the rent and all the other bills when
there are close to a million other young people out of work and living on benefits across the
country?
It may well be that we really are on the brink of another welfare revolution. In my decades of
reporting politics I have never before seen the sort of political consensus on the benefits
system that we seem to be approaching now and our poll suggests the politicians are
reflecting a changing public mood. But that consensus has yet to be converted into hard
policies acceptable to the nation as a whole.
Beveridge tried to slay the fifth evil giant and, in the process, helped to create a different sort
of monster in its place: the age of entitlement. The battle for his successors is to bring it to an
end.

In the words of welfare policy experts Robert Rector and Jennifer Marshall writing
in National Affairs:

Material poverty has been replaced by a far deeper “behavioral poverty” — a vicious
cycle of unwed childbearing, social dysfunction, and welfare dependency in poor
communities. Even as the welfare state has improved the material comfort of low-
income Americans by transferring enormous financial resources to them, it has
exacerbated these behavioral problems. The result has been the disintegration of the
work ethic, family structure, and social fabric of large segments of the American
population, which has in turn created a new dependency class.

Read more at http://spectator.org/articles/55875/five-reasons-reform-welfareagain

Total welfare spending nearly tripled, from 2.19 percent of GDP to 6 percent (1965-2001)

All this spending has not bought an appreciable reduction in poverty. As Figure 8 makes clear, the
poverty rate has remained relatively constant since 1965, despite rising welfare spending. In fact,
the only appreciable decline occurred in the 1990s, a time of state experimentation with tightening
welfare eligibility, culminating in the passage of national welfare reform (the Personal Responsibility
and Work Responsibility Act of 1996). And, since 2006, poverty rates have risen despite a massive
increase in spending.25

But more important, the concept behind how we fight poverty is wrong. The vast majority of current
programs are focused on making poverty more comfortable—giving poor people more food, better
shelter, health care, and so forth—rather than giving people the tools that will help them escape
poverty. And we actually have a pretty solid idea of the keys to getting out of and staying out of
poverty: (1) finish school; (2) do not get pregnant outside marriage; and (3) get a job, any job, and
stick with it. Consider: High school dropouts are roughly three and a half times more likely to end up
in poverty than those who complete at least a high school education.31 If they do find jobs, their
wages are likely to be low. Wages for high school dropouts have declined (in inflation-adjusted
terms) by 17.5 percent over the past 30 years.32 At the same time, children growing up in single
parent families are four times more likely to be poor than children growing up in two-parent
families.33 Roughly 63 percent of all poor children reside in single-parent families.34 And only 2.6
percent of full-time workers are poor. The “working poor” are a small minority of the poor
population. Even part-time work makes a significant difference. Only 15 percent of part-time
workers are poor, compared with 23.9 percent of adults who do not work.35 To jobs, education, and
marriage, we can add one more important stepping stone on the road out of poverty—savings and
the accumulation of wealth. As Michael Sherraden of Washington University in St. Louis has noted,
“for the vast majority of households, the pathway out of poverty is not through consumption, but
through saving and accumulation.”36 Yet with the exception of some education programs such as
Pell grants and some job training programs, little of our current welfare state encourages—and
much discourages—the behavior and skills that would help them stay in school, avoid unmarried
pregnancies, find a job, and save money. All of this suggests that it is far past time to reevaluate our
current approach to fighting poverty. Although a comprehensive alternative to our current welfare
state is beyond the scope of this paper, it should be clear that we need to focus less on making
poverty more comfortable and more on creating the prosperity that will get people out of poverty.
Conclusion The American welfare state is much larger than commonly believed. The federal
government alone currently funds and operates 126 different welfare or anti-poverty programs,
spending more than $668 billion per year. State and local governments provide additional funding
for several of these programs and also operate a number of programs on their own, adding another
$284 billion per year. That means that, at all levels, government is spending more than $952 billion
per year, just short of the trillion dollar mark. Yet for all this spending, we have made remarkably
little progress in reducing poverty. Indeed, poverty rates have risen in recent years even as spending
on anti-poverty programs has increased. All of this suggests that the answer to poverty lies not in the
expansion of the welfare state, but in building the habits and creating the conditions that lead to
prosperity. It would make sense therefore to shift our anti-poverty efforts from government
programs that simply provide money or goods and services to those who are living in poverty to
efforts to create the conditions and incentives that will make it easier for people to escape poverty.
Poverty, after all, is the natural condition of man. Indeed, throughout most of human history, man
has existed in the most meager of conditions. Prosperity, on the other hand, is something that is
created. And we know that the best way to create wealth is not through government action, but
through the power of the free market. That means that if we wish to fight poverty, we should end
those government policies—high taxes and regulatory excess—that inhibit growth and job creation.
We should protect capital investment and give people the opportunity to start new businesses. We
should reform our failed government school system to encourage competition and choice. We
should encourage the poor to save and invest. We all seek a society where every American can reach
his or her full potential, where as few people as possible live in poverty, and where no one must go
without the basic necessities of life. More importantly we seek a society in which every person can
live a fulfilled and actualized life. Shouldn’t we judge the success of our efforts to end poverty not by
how much charity we provide to the poor but by how few people need such charity? By that
measure, our current $1 trillion War on Poverty is a failure.

(MICHAEL TANNER, POLICY ANALYSIS, CATO INSTITUTE, 2012)

Welfare programs in US:

Children’s Health Insurance Program (CHIP) Supplemental Nutrition

Assistance Program (SNAP). Special Supplemental Nutrition
Program for Women, Infants and Children (WIC), Summer Food
Service Program
Child and Adult Care Food Program, the Emergency Food Assistance
Program, and the Commodity Supplemental Food Program (CSFP)
Nutrition Program for the Elderly
Rural Rental Assistance, Rural Housing Loans, and Rural Rental
Housing Loans. Also included is Home Investment Partnerships
(HOME), Community Development Block Grants (CDBG), Housing
for Special Populations (Elderly and Disabled), Housing Opportunities
for Persons with AIDS (HOPWA), Emergency Shelter Grants, the
Supportive Housing program, the Single Room Occupancy program,
the Shelter Plus Care program, and the Home Ownership and
Opportunity for People Everywhere (HOPE) program
Temporary Assistance for Needy Families (TANF)
the cost of the 185 federal means tested welfare programs for 2010 for
the federal government alone is nearly $700 billion
Peter Ferrara, Forbes. 2011.

5. Work requirements promote individual responsibility and reduce

poverty. Temporary Assistance for Needy Families (TANF) work requirements
slashed welfare caseloads by nearly 60 percent. Poverty among all single mothers fell
30 percent. About 3 million fewer children lived in poverty in 2003 than in 1995.

These statistics represent real people. LaShunda Hall, a TANF recipient and single
parent of two children, testified before the House Committee on Education and The
Workforce five years after welfare reform: “I stand as a positive example of those
who have realized success by participating in this life-changing TANF funded
program. Through TANF funding ... we have gone on to become productive
employees of America’s workforce.”

Welfare reform succeeded primarily because of one policy: 30 to 40 percent of those

receiving welfare benefits in each state must engage in 20 to 30 hours of “work
activities” per week. These include unsubsidized or government-subsidized
employment, community-service work, up to 12 months of vocational training, job
searching (for up to six weeks), and high-school or GED education.

It succeeded because it was based on a sound understanding of human nature, that

work builds character and character drives success. By engaging impoverished
Americans in work, it gave millions the experience, skill, and character to rise to
individual responsibility and out of poverty. These truths about human nature are the
foundation of the American experience. We should apply them to the menagerie of
government programs consuming both our budget and our poor.

Read more at http://spectator.org/articles/55875/five-reasons-reform-welfareagain