Welfare Reform that will Cost Nothing


SmallIvy

I was reading an editorial in USA Today about the need to address the obesity epidemic in children today that will lead to a lot of health problems as they become adults.  One issue cited in the editorial was that children today, “even middle class children,” are eating a lot of salty, sugary, high-fat snacks.  Their solution was to provide another $45 per month to children who receive free or reduced-price school lunches and stated that it would only cost a dozen billion dollars or so.  I guess they think that if the families had a little more money, they would be buying the brussel sprouts and spinach the children need rather than the bag of chips and cookies.  I think they are missing the bigger issue and not answering the right question.

The right question is:  Given the amount of food aid families with children are receiving, why don’t they have ample and good food to eat at home?  and furthermore:  Why do we need to provide free or reduced price lunches (and breakfasts) at school in the first place?

The real issue is that we’re giving money to a group of people who, as a population, have made and continue to make bad choices in life and bad choices financially.  Certainly there are some exceptions who simply have some very unfortunate event and finding themselves in need of support for a period of time, but most people who cannot afford to feed their children and rely on the government to do so make bad decisions about what they do with their time, what they do with their money, and where they choose to live.  Now we expect to give money to these same families and believe that they’ll use it wisely and cover all of their necessities as well as a normal middle-class family without even giving them any instruction and training on how to do so.

A better solution would be to provide guidelines on how the money provided is to be used, then carefully audit those who are on welfare.  Those who have shown that they handle the money well would be left to handle the money themselves with periodic audits.  If it is found that even when the money is handled carefully that there simply is not enough to feed their children, more could be provided.  Those who do not handle the money well would have a fiduciary appointed to handle the money for them.  Also, perhaps instead of providing money, food and other necessities could be given directly.  Those who handle money poorly would also be required to attend classes on personal finance.  Those who attend classes may then be able to try handling the money alone again.  There will be some people who will never do well and will need a permanent fiduciary.

Beyond simply handling the money comes learning the skills needed to reduce the amount of money needed.  One of the most important is learning how to cook since it is far cheaper to cook at home than to buy meals out, even from fast food places, and it is even cheaper to start from fresh ingredients than to simply heat up processed foods.  It is also healthier.  Classes could also be given on simple home repairs and car repairs.  Personal finance classes would also be useful.  Note that these classes and the appointment of fiduciaries would not need to be a government responsibility.  Private charities and churches could take on these roles as part of their services.  Note, I’ve never understood why soup kitchens have volunteers cook and serve the food rather than have those eating the meals take a role since this would both teach them valuable skills and add to their self-worth.

Granted, this plan will take a little effort.  It is far easier to simply send out a check and look the other way than it is to make sure the money is handled correctly.  But a change will definitely make the money go farther and help people rather than enable them.  Perhaps we’ll no longer see the need for free or reduced school lunches since families will have enough in their food budgets, when handled properly, to send in a lunch with their children.  Perhaps these children will make the lunches themselves if their parents are out to work early and work late into the evening.

A change in the system is important not just because it reduces the burden on those who do work and contribute to reduce the amount of money that is wasted and spent poorly.  By teaching skills, you bring people into a better situation where they can start to take care of themselves.  This means you won’t need to be putting food in kid’s backpacks for the weekend or opening up school cafeterias in the summer to feed children who get no meals outside of school.  Perhaps it will also prevent the children from growing up and wasting their lives on public assistance as too many generations have done.

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Disclaimer: This blog is not meant to give financial planning or tax advice. It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA. All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.

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