Is the Welfare Problem Solvable Through Privatization?
Privatizing welfare will not solve the problems associated with welfare. [1]
To explain why I believe privatizing welfare will not solve the welfare problem, I will look at panhandlers.[2] Panhandlers, it has been reported and is well known, earn hundreds of dollars on a daily basis from altruistic people, which can be considered the private sector. The consequence of this is that panhandlers do not have an incentive to actively search for a real job.
To illustrate, let us assume that a panhandler begs for money on the streets for seven days a week. At the same time, he/she receives $200 a day from altruistic people. This panhandler earns $1400 a week (or $5600 a month or $72,800 a year) and does not pay taxes on this income. I, on the other hand, will make about $1500, which is taxable, a month when I will begin my life in the Navy. Is there not something wrong with this picture? This panhandler is making almost as much in one week as I will make in a month in the Navy. Where is the incentive to work? The private sector does not provide the incentive to work in this case.
When looking at how the private sector deals with panhandlers, it seems that privatizing welfare will not solve the welfare problem.
[1] The welfare problem of which I speak is encouraging people on welfare to work.
[2] Panhandlers are people who beg for money on the street.
To explain why I believe privatizing welfare will not solve the welfare problem, I will look at panhandlers.[2] Panhandlers, it has been reported and is well known, earn hundreds of dollars on a daily basis from altruistic people, which can be considered the private sector. The consequence of this is that panhandlers do not have an incentive to actively search for a real job.
To illustrate, let us assume that a panhandler begs for money on the streets for seven days a week. At the same time, he/she receives $200 a day from altruistic people. This panhandler earns $1400 a week (or $5600 a month or $72,800 a year) and does not pay taxes on this income. I, on the other hand, will make about $1500, which is taxable, a month when I will begin my life in the Navy. Is there not something wrong with this picture? This panhandler is making almost as much in one week as I will make in a month in the Navy. Where is the incentive to work? The private sector does not provide the incentive to work in this case.
When looking at how the private sector deals with panhandlers, it seems that privatizing welfare will not solve the welfare problem.
[1] The welfare problem of which I speak is encouraging people on welfare to work.
[2] Panhandlers are people who beg for money on the street.
posted by Rich at 10:50 AM
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