A Different Plan for Those at the Bottom

IMG_0123Welfare was started in an effort to lift those in desperate poverty up to the level where they had the necessities of life, such as food and clothing.  The Great Society of the 1960’s then tried to lift people further, trying to eliminate poverty entirely.  This included things such as food stamps, housing assistance and public housing, and Medicaid.

One would need to ask, however, if these programs are working.  Certainly, food stamps, combined with private charities and food banks, have made food available to those who adults need it.  Public housing has made housing available to adults who need it.  And yet we still have children who go to bed hungry and people living in the streets.  And even those who are using these programs are still living in poverty and don’t appear likely to ever climb out.

So here’s a question:

If we have money for food being available to any family with children who need it, why do we have a “free or reduced price” lunch program at schools, and furthermore, why do we need to open schools in  the summer to feed children and have people stuffing food into backpacks for children to take home for the weekends?

The answer is complicated and varies by the situation, but a common factor in many of these situations it is because the adults responsible for these children are not doing what is needed to ensure that they have enough food to eat.  Food is not really expensive, and while it would not be possible for people to buy a home with two cars on a minimum wage salary, certainly even parents working entry-level jobs could find ways for their children to have food if that was the top priority. in most cases even without any government assistance.  Add onto that the money that most of these parents can get from the government to get food for their children, and there should be no issue.  The problem is that the parents are not putting feeding their children as the top priority in many cases, either intentionally or because they handle money so poorly.

And that’s really the problem.  Except for the rarest of cases, people who find themselves continually in the situation to need assistance (not those who may find themselves there from time-to-time) have made and continue to make bad financial decisions.  They probably started out by making the decision to not take advantage of the chances they had to get an education.  They then made bad decisions about when to have children, or at least do the things that lead to children before they were in a situation where they could support them.  They didn’t make the right decisions about their career, perhaps not being a good employee or perhaps always changing jobs and starting over again, and ended up always at the low rung of the ladder.

And now when they get money, either through work or through the government, they don’t use it effectively and end up with hungry children or no place to live.  The question is:

Why would you expect someone who is always making bad financial decisions to be able to make the right choices to take care of themselves when you hand them cash?

It is time to look at a different plan – one in which those who have shown themselves to be financially irresponsible are relieved of the power to make those decisions with taxpayer money.

Rather than provide money to buy food, provide food.

If you’re trying to feed children, just serve three meals a day in school cafeterias, churches, and other locations.  And rather than just have everyone grab a tray and then leave when done, have the children help make the food, serve the food, and then clean up so that the children will start to learn a work ethic and skills needed to be good employees later.  Learning to cook will also help them save money later when they are the parents and maybe they’ll be able to stretch their food budget better.

If you’re trying to feed families, you can also have the food lines at churches and other locations with everyone helping.  You can also provide a specific set of items, either that they can purchase at the grocery store or through food pantries.  This would prevent them from buying a lot of junk and overpriced items that people who are buying their own food on a budget would never get.  (Note, the gas station cappuccino in my local Mapco says that it is a food stamp item.)  Absolutely get rid of the cash cards that can be used for anything since these are very often abused.  Again, why expect to give people who make bad financial decisions money and get a good outcome?

Now while this will improve the food situation, getting more people fed and reducing the amount of waste, it still has the issue that people aren’t doing things to get themselves out of poverty.  In fact, they learn that if they try to work and better themselves, they lose benefits.  They also see the choice between doing nothing and getting X dollars, or getting up, going to work, working all day, and then getting 1.01X dollars or even 0.90X dollars.  This leads to the second change:

Rather than provide money, provide work.

When you give able-bodied people the ability to meet their needs without working, you take away their pride and their desire to work.  Why not instead replace welfare with links between employers and people who need work to do?  If there were not enough employers at a given time, jobs for the state and the could be given.  This would take away the incentive to stay on welfare (there would no longer be such a thing) since people would be working for their pay either way.  This would have the side benefit of giving people their pride back.

Please contact me via vtsioriginal@yahoo.com or leave a comment.

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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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