Less Welfare Doesn't Equal Less Government

This is part four. Click here to read the entire series.

Interestingly, it was neoconservative thinkers like Irving Kristol, James Q. Wilson, Daniel Patrick Moynihan, Gertrude Himmelfarb, and others who most searchingly indicted the kind of welfare state presented in Yuval Levin's argument.

They noted that welfare programs aimed at the poor alone create three kinds of problems:

1) They intensify poverty because they impose huge costs on the exit from poverty.

Imagine a world in which everyone who earns less than $20,000 a year qualifies for Medicaid and nobody who earns more than $20,000 does so. What incentives do we present to the person now earning $19,999? One more dollar, and boom, there go your medical benefits.

This problem can be mitigated by phasing out benefits gradually - but that gets very expensive. (e.g., Today, we have states where people qualify for some Medicaid benefits all the way up to 400% of the poverty level.) Except when times are very flush, governments end up living with a situation in which it becomes simply irrational for poor people to work harder to escape poverty. The barriers to poverty exit are surely one reason that poverty rates have remained stuck at around 13% since 1965 even in boom times.

2) Welfare programs aimed at the poor compel governments to police the behavior of the poor.

Yuval Levin's 5th principle argues: "we should reduce the reach of the administrative state, paring back all but essential regulations and protections and adopting over time an ethic of keeping the playing field level rather than micromanaging market forces, and of preferring set rules (in regulation, in monetary policy, and elsewhere) to administrative discretion." Hear, hear. [Bolding added.]

Yet programs for the poor-only demand higher levels of administrative discretion. It's easy to determine who qualifies for Social Security old-age pensions, not so easy to determine who qualifies for the Earned Income Tax Credit. Since qualification is uncertain, fraud is tempting - and fraud must be policed.

3) Welfare programs for the poor alone induce the poor to think of themselves as a community apart from the rest of society. It's not just a matter of dependency, which is a severe and inescapable cost of any government program. (See e.g. the American grain farmer.) Worse is the development of alienated subcultures and anti-social folkways: the adversary culture as it has been called.

For these reasons and others, Irving Kristol always favorably contrasted Social Security and Medicare to means-tested programs for the poor.

More to come…