The Mises Institute monthly, free with membership
December 1995
Volume 13, Number 12
If it had the will, Congress could kill the redistributionist monster, the Welfare State, that's
consumed at least $5 trillion in wealth since the Great Society. How? Cut anywhere and
everywhere, abolish whole agencies, and return the $350 billion saved from next year's spending
to the taxpayers in the form of a tax cut of the same size.
Anyone who thinks this plan is politically untenable hasn't talked to a taxpayer recently.
Americans hate welfare. It violates cultural strictures against the free ride, taxes the productive to
reward the unproductive, perpetuates poverty, and makes the government strong and the people
weak. To get a jump on opposition from the media and special interests, the quicker it's
abolished, the better.
So far, Congressional reforms have addressed none of these concerns. Speaker Gingrich told
the
New York Times: "we are around the edges trimming and manicuring and trying to
rethink and
modernize these programs, but there is not a single one of the big programs we're touching in a
profound way."
That's not a defense, as he thinks; it's an admission of guilt, and proof, as if we needed it, that
he
will lead no revolution against welfarism. Programs are slated to grow and grow, at an alleged
"slower rate" than some mythically worse growth rate that the Congress itself makes up. History
will still record that welfare spending has gone up under the "revolutionary" reforms
of this
Congress.
The point is not the rate of growth of spending, but the destruction that taxes and spending
are
causing right now. If this destruction were ended immediately, masses of people would be
reintroduced to the work ethic, taxpayers would have more money in their pockets, and voluntary
spending on private charity would go up. Until then, poverty, sloth, and bureaucracy will
continue to be subsidized by you and me.
People would love the opportunity to give more to actually help the less fortunate, especially
in
their own families and communities. But taxes, including Social Security, are draining people's
discretionary income and creating a disincentive to give. A real welfare reform would address
this problem first.
The primary plank in the Senate's bill has to do with block grants to the states. This is
supposed
to be "federalism," but no true federalist would be impressed. Federalism is the idea that
government should be close to the people so it can be limited. Federalism does not mean that the
national tax police should loot the industrious so politicians can dole it out to other governments
on the condition that they give to people who pay no taxes.
The block-grant scheme was met by an invasion of state-government lobbyists. They didn't
oppose the idea. They just wanted to make sure they get their share of the loot. See what's
happening? The block-grant concept is creating yet another constituency demanding something
from Washington: state legislators. Once the money begins to flow, and the politicians at the
state level have new cash to play with, future welfare reform will be that much more difficult.
Indeed, this could be part of the purpose.
The bickering has centered--as usual--on who gets what, a dispute that cannot be solved
rationally. The money can't be divided on the basis of population, since there is no consistent
relationship between poverty and population density. Neither can it be divided based on existing
poverty, since that will create incentives to maximize poverty, as officially measured, in order to
get the cash.
There are those who see welfare reform as a chance for new forms of social engineering.
Some
religious leaders say we should pay young, single mothers not to have abortions. Has it not
occurred to them that the problem goes back one step further? When teens bear children out of
wedlock, it's the consequence of a more fundamental problem that taxpayers have been forced to
subsidize. If we stop the subsidies that reward promiscuity, we'll begin to see young people lead
more ordered lives.
This argument goes to the core of another hysteria. Some Republicans have decided that poor
women are responsible for virtually all our social ills. Instead of cutting welfare, they want to add
political supervision and government orphanages. Writing in the New York Times,
Lisa Schiffren,
former Dan Quayle speechwriter, even urges these women to have abortions. But the point of
welfare reform is to get government out of the business of running people's lives, either from the
supply side or the demand side.
If we did this right--including a massive slashing of taxes for the rich and middle class--we'd
see
private dollars take care of the deserving poor after the bums have been forced to work or starve.
Yet there are those who don't want private charities to stay private. A neoconservative group
called the "Project for American Renewal," which has support in the Senate, wants Congress to
spend $8.6 billion to subsidize private "antipoverty charities."
This way lies disaster. No doubt, private charity does a better job than government welfare.
But it
won't if it's put on the government dole. Charities know that government money is always there
for the taking. Just do and say what the government orders. For example, policy groups can chow
down on NASA's pork, so long as they say that NASA is the greatest thing since moon boots.
The danger of taking government money--in addition to being the recipient of stolen
funds--is
that it compromises efficiency and independence, and, of course, the Mises Institute has never
taken a dime. Liberal groups are glad to take government loot, since their primary goal is to
expand government power. But people with our views face a choice of sticking to principle or
selling out.
Paying for or receiving welfare has become a way of life for everyone. Can we imagine life
without it? Consider this analogy from the hometown of the Mises Institute. When Hurricane
Opal hit us, people faced tremendous damage to homes and cars, rampant shortages, and nearly a
week without electricity. Yet anyone who was able became part of a generous outpouring of
concern for others. The reason was not the emergency situation as such, but the sense we had that
if we don't help our neighbors no one will.
It is those feelings and actions that the welfare state has worked to dampen, and which
abolishing
welfare would revive. A sweeping and radical welfare reform would return hundreds of billions
of dollars to their rightful owners, encourage charity for the truly needy, and underscore the need
to scrape the barnacles off the boat.
The Congressional freshmen seem willing to adhere to a higher standard of public life than
the
leadership. No more fiddling around the edges with these diversionary tactics and thousand-page
schemes. An honest welfare reform is as simple as wiping it off the budget tables.
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Llewellyn H. Rockwell, Jr. is president and founder of the Ludwig von Mises Institute
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