Mondays like this are always a bit of a pain; a 700-mile commute to work makes for a long-ass day. Still; that’s the life, and come June 1st, we’ll see 10 years passed without yr. obdt. having held down a traditional J.O.B., so there are compensations.
Now, just in case you haven’t had your “WTF!?” moment for the day; The Other McCain calls our attention to a CNN anchor, Deb Feyerick, who apparently thinks asteroids are caused by global warming.
Now, maybe Ms. Feyerick just spoke carelessly. On the other hand, maybe she’s just profoundly ignorant, or dumb as a bag of wet hair. In either case, asking Bill Nye the “Science Guy” (use of scare quotes intentional; the guy’s a mechanical engineer) whether asteroids could be caused by global warming is a real head-scratcher.
More than three decades ago, I began enumerating a myriad of government “needs tested” programs that diminished welfare benefits as their recipients earned more income. The loss of government benefits made earning more income less attractive to many low-income families, an effect similar to that of raising marginal tax rates.
In the intervening years, alas, very little has changed. Gary Alexander, secretary of public welfare for the State of Pennsylvania, made that quite clear in a July presentation to the American Enterprise Institute entitled “Welfare’s Failure and the Solution,” an analysis of the welfare benefits plus wages of a single mother of two young children living in Pennsylvania.
Mr. Alexander reports that a single mother of two in the Keystone State earning no wages will obtain welfare benefits—such as food stamps, child care and Medicaid services—worth more than $45,000 annually. If the woman begins earning wages, her total annual income, including the value of her welfare benefits, will rise as well—up to about $9,000 in wages. But the next $5,000 in wages will not increase her total income, because she will lose some Medicaid and other benefits. In short, she faces the equivalent of a 100% marginal tax.
From about $14,000 to $29,000 of gross wages, she will also lose government benefits such that her total annual income will rise only about $5,000—an effective marginal tax rate of 67%. At $29,000 of wages, the woman will realize a little less than $57,000 in net income plus benefits. Once she earns more than $29,000 in wages her housing subsidies and food subsidies drop way down. With wages above $43,000, her child-care subsidies disappear, and once her wages top $57,000 her family will no longer qualify for the Children’s Health Insurance Program.
Mr. Laffer, of course, is only discussing financial incentives. There are other incentives and disincentives that apply; I’ve presented my thoughts on such in these pages before.
Being on welfare shouldn’t be easy. It should be a trifle humiliating. It should be a bare-subsistence system. There should be negative consequences for being on the dole, and one of those should be loss of the franchise. Yes, really. No, I’m not kidding. If you’re not contributing, you don’t get a say in deciding policy.
This is a matter of sound fiscal policy; it’s also a matter of principle. We’re fast becoming a nation that rewards failure and punishes success, and that’s not a sustainable system.