Archive for the 'Welfare' Category

Unemployment Insurance Affect On Unemployment

“We exploit a policy discontinuity at U.S. state borders to identify the effects of unemployment insurance policies on unemployment. Our estimates imply that most of the persistent increase in unemployment during the Great Recession can be accounted for by the unprecedented extensions of unemployment benefit eligibility. In contrast to the existing recent literature that mainly focused on estimating the effects of benefit duration on job search and acceptance strategies of the unemployed — the micro effect — we focus on measuring the general equilibrium macro effect that operates primarily through the response of job creation to unemployment benefit extensions. We find that it is the latter effect that is very important quantitatively”. — new NBER paper

Beverly Hills As The USA

Imagine that you lived in Beverly Hills, among the richest people in the United States. Some of your friends were the kids of executives at Fortune 500 companies. Others were the kids of famous Doctors, Lawyers, and some were the kids of hedge fund managers. While all relatively rich, assume there was quite a range of wealth from really rich, to filthy rich.

Further assume, that one day, a bleeding heart liberal starts feeling bad for the really rich. Her complaints are along the lines of: “The really rich can’t eat out at the $500/plate restaurants, they have to settle for the $100/plate restaurants, or, god forbid, make sandwiches at home”. Her complaints continue: “The really rich can’t afford the Lamborghini’s or Ferrari’s, they have to get by with the – GASP! – BMW’s and Mercedes Benz’s”. Worst yet, “the really rich actually have to live in mansions with no ocean view, or golf courses”. Most heartbreaking of all, “the really rich have to actually prioritize their lifestyle and set a budget. They can’t go to Europe on a moments notice, they can’t eat out everyday”.

Now further assume that said bleeding heart liberal decided to set up an “alleviate suffering” fund that took away from the filthy rich to give to the really rich. Such a fund would help equalize Beverly Hills and “bring people together”. But instead of making this fund voluntary, the bleeding heart liberal wanted to enforce this through the city. She wanted to make it a city tax that merely takes from the filthy rich and gives to the really rich. Her arguments, again, are to “alleviate suffering”.

What would your reaction be if you were suddenly transplanted to that society and debate? Would you support the “Beverly Hills tax”? I am not one of those that believes there are absolutely no circumstances that justify forcibly taking the wages of one to give to another. But such circumstances have to be met with atleast reasonable justification. Yet simply moving money around amongst the worlds richest people does not seem to me like an acceptable justification.

Such is the image that comes to mind whenever I have a discussion with a liberal about increasing redistribution via taxes to help the USA “poor”.  It’s the image my dad and uncles, who immigrated to the United States in their twenties from ranch life in the poorest parts of Mexico, gave me. It is certainly how they viewed me and my cousins growing up – no matter what our circumstances, be it growing up in Compton (as I did), living off of the income of mechanics, gardeners, or window tinters – we were all blessed beyond their wildest dreams. Where they had to eat tortillas off the dirt floor, work in fields in the scorching heat where there were no “sick days” or “vacation time”, even the McDonalds cashier can seem privileged. And this view isn’t far from reality. Even the “poor” in the United States are among the richest in the world (see here and here).

The Incentives Of Welfare

What would you do if you were too poor to care for your children? If you said have less children, you have not factored in the economics of welfare:

The 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) gave states greater flexibility to formulate and implement initiatives to reduce welfare dependency and encourage employment for members of low-income families with children. For the nation, in 2006, 10 years after passage of the Act, the birth rate for women 15 to 50 years old receiving public assistance income in the last 12 months was 155 births per 1,000 women, about three times the rate for women not receiving public assistance (53 births per 1,000 women).

In other words, when you subsidize children, you create the incentive to have more children…3x the national average, in this case. Link via Perry here.

Poverty In The United States

My longest friendship was with Edgar, a friend I met in the 6th grade. He was, like me, a child of immigrant parents and he spoke primarily Spanish. He loved to joke, tell stories, and that favorite of past times, sit around with your closest friends and make fun of each other.

Unfortunately, he was also one who tended toward the criminal side of life. Since we first met, he was always getting into trouble for something, be it ditching class, smoking weed, fighting, stealing stereos, stealing cars and other things – but nothing that would make him a bad friend. He wouldn’t steal from his friends, I have never in my life seen him lose his temper, he was a friend who would watch your back and who you could trust.

I remember riding my bike from Compton to his parents apartment in Gardena and later to their new spot in South Los Angeles. He introduced me to a lot of new people. Everywhere he moved, within months, he would know many people in the neighborhood. Like me, he was someone who couldn’t stay in the house and met new people easily. We both would ride our bikes anywhere, on a whim. To swapmeets, malls, hang outs, anywhere our bikes would take us. Also, as crazy luck would have it, he had two cousins that were from the Mexican gang that claimed my neighborhood in Compton. Eventually, he too would join that gang and become one of its lifetime members.

Like my mom, he had a family that would give him almost free reign to do as he pleased. There were no restrictions, even at an early age, we had no curfew, no limits on where or what city we can ride our bikes to, and little supervision outside of the home. His step dad, who had spent some time in prison and I knew only casually, would sometimes pick us up if we needed it. One time, I think I was about 13 years old at the time, his step dad picked us up and instead of taking us immediately home, drove deeper into LA to a place I had never been before. He left us in the car reassuring us he would be back shortly. Hours passed, well into the night, and we were still parked. He had an old Monte Carlo with really wide back seats, so Edgar and I fell asleep in the car, waiting for him to get back. Then out of nowhere, he comes back to the car, asks Edgar to get in the back seat with me, and brings with him a, what looked like, neighborhood cluck head. A cluck head is someone who is so addicted to drugs, primarily crack cocaine and has done so much of it, that they are visually drug addicts. The people you meet in high crime neighborhoods late at night with really red eyes, dry lips, missing teeth and always begging you for change, those are cluck heads. As soon as they got into the car, he drives a few blocks more and she gets out only to return a few minutes later. Edgar and I are both still in the back seat but I don’t say a word and Edgar looks like he went right back to sleep. A few minutes go by and I hear them smoking something, I hear the burning of foil paper, the sight of a lighter, and eventually realize that they are smoking crack cocaine together. After doing this for some time, he eventually leaves the area and takes us home. Years later, the same step dad would be hospitalized after jumping out of his second story window while high on PCP, he believed he could fly and nobody could convince him otherwise.

The longest friendship from Compton I had was with (lil) Sid, he lived a few houses from my house. Though he was a few years younger than me, we hung out alot. He would come to my house and we would play nintendo, baseball, and craps in the front of my house. Thinking back to those early years, I remember most his temper, whenever he would lose big he would have to go back home because he would get so frustrated with himself, sometimes in tears of anger. As the years passed Sid got older (and bigger, grew up to be one big guy) and, sadly, ended up joining the neighborhood crip gang. Though he was black, a member of a crip gang, and had a circle of friends different than mine, we continued to stay really close friends.

Sid didn’t know his father and his mother was a neighborhood walker, at all hours of the day and night she would be walking all around the neighborhood, to peoples houses, to the liquor store, to the adjacent streets, all over. Sids mom was also, though not at the level of a crack head, a crack cocaine user. Though I knew before, I remember hanging out with a local drug dealer when she showed up to buy crack. She looked at me straight in the eyes and told me never to mention this to her son. I promised her that I would not, and never did – though I am sure he already knew.

My neighbors in Compton were local crips. The mom was as addicted to crack cocaine as you can get. She had missing teeth, a temper like no other, a clumsy walk, always had a cigaratte or beer in her hand and if you met her elsewhere you could easily confuse her for homeless (nonetheless, I grew up with her as a friend and neighbor, and to this day when I see her we hug and respect each other). She has three sons, the older one of which was getting into trouble since I first moved into Compton (he is now serving life in prison).

These friends and family upbringings I write about are not that rare in Compton. Almost all of my friends families I had while living in Compton have something in common with these families. Very few of them, especially my black friends, have married parents, the ones that did had a dad that beats their mom, others one that is a drug and/or alcoholic, others a dad that is currently in prison or an ex-con former gangmember (like Edgars step dad) – some have prostitute moms, some have parents that sell drugs and push them to sell drugs. I remember walking into a friends house and seeing his mom sniffing cocaine right off the living room table. It didn’t bother her either, we just walked right passed her into my friends room. She was a neighborhood drug dealer and her son would later follow in her footsteps, all with his moms approval and backing. In fact, all drug dealers I knew in Compton had atleast tacit approval from their parents – several had outright encouragement.

Poverty in the United States is not primarily material, it is not primarily nutritional, it is not even primarily a lack of opportunity, though some of that still remains – poverty in the United States is primarily with the family. As the must read political scientist James Q. Wilson wrote, “There are many families with competent single moms, but they are outnumbered by the families that are harmed by the absence of a husband. From the ranks of the latter come high rates of crime and imprisonment, heavy rates of drug use, poor school performance, and a willingness to loot unguarded stores….In my opinion, the condition of the black family is the key to the persistence of a large and criminal lower class.

It is not money, or nutrition, or greater opportunity that the poor in the United States primarily need, it is a family structure that is conducive to learning, to upward mobility, and to a crime free life. When you have a large amount of friends and family – dads, brothers, uncles, and neighbors either in gangs or intimately tied to the gang culture, and a world filled with drugs, and crime, it is hard to see a way out and it is hard to learn the virtues necessary to get out. Virtues like hard work, discipline, self control, and responsibility are hard if not impossible to learn in these environments and much of government assistant is wasted or counterproductive in these situations.

As far as Edgar and Sid go, Edgar was in jail the last couple of years I lived in Compton, and the last time I saw him was when I was in my last year of college, I picked him up from jail and took him to his parents house. At this point his parents had had enough with him and refused to let him in. He promised he is a changed man and begged them to give him one last chance but they wouldn’t budge. I dropped him off with some of his homies, and that is the last I saw of him. Shortly after, he would land in prison again, this time his last and he is not set to come out for a very long time. Sid, on the other hand, started to do good. After I moved out of Compton I would occasionally come back to visit and last I heard he said he was finally leaving Compton in search of a better life in Long Beach. Unfortunately, that was the last I saw of him. In another Compton visit I spotted his mom and eagerly asked her about Sid, with the impression that he is doing well in Long Beach. She informed me that he had been shot and killed in LA, and with tears already in her eyes, I asked no further questions and expressed my condolences. May he Rest In Peace.

Milton Friedman On Government

In 1975 Milton Friedman appeared on The Open Mind, a television show that is no longer showing, and in the interview he gave the fundamental problem with using the government to solve social problems:

And that is the fallacy — this is at the bottom of it — the fallacy that it is feasible and possible to do good with other people’s money. Now, you see that fallacy — that view — has two flaws. If I want to do good with other people’s money I’d first have to take it away from them. That means that the welfare state philosophy of doing good with other people’s money, at its very bottom, is a philosophy of violence and coercion. It’s against freedom, because I have to use force to get the money. In the second place, very few people spend other people’s money as carefully as they spend their own. Let me take this down to the situation of New York City right now. About six or seven or eight years ago — I’ve forgotten when it was — John Kenneth Galbraith, in an article he wrote in The New York Times Magazine Section, said, there are no problems in New York City that would not be solved if the New York City budget were twice what it is now. Now, the New York City budget has since then something like tripled. And all the problems are worse. Why? Because the fact is, it’s a confusion to identify the City with the people. The New York City’s budget is higher, but that means that the people of New York have less to spend. It’s only been transferred from people individually to the City. Now, who spends the money more carefully — the City civil servants or people who are spending their own money? Now, of course, you may say to me, but when the City spends the money, it’ll go for the good things, and so even half of it is wasted, it’s better off. But that’s nonsense. City civil servants and others are just like the rest of us. We’re all of us interested in pursuing our own objectives. The label again on the bottle may be welfare or health or education. But you have to look at all of the places where it drops off en route to going there. There are lots of other things that can be accomplished under those titles, and the fact is that no more — no larger a fraction of the money the City spends goes to good things. Let me illustrate in a very concrete way. A major problem in New York City is housing. Why? Because of bad governmental policy. Rent control, which was continued in New York after World War II, and the only city in the country where it was continued, everywhere else it was dropped. It has caused enormous abandonment of houses, eroding the tax base, public housing, governmental subsidy to housing, so that people who occupy it have no incentive to maintain it. If you had eliminated the government from the housing market and left that money in the hands of the people themselves, the housing situation in New York today would be far better than it is.

The full transcript can be found here. For a video of the interview, along with many other must watch videos on this topic, go here.

The US Economy In Perspective

Mark J. Perry, professor of finance and business economics at the University of Michigan, puts the US economy in perspective:

The unemployment rate in Canada just hit a 30-year low of 6.1% in December, the lowest rate since 1977 when Pierre Trudeau was Canada’s prime minister and Jimmy Carter was U.S. president. During the last U.S. recession from March – November 2001, the unemployment never got higher than 5.5%. When the unemployment rate continued to rise to rise and peaked at 6.3% in June of 2003, it was dismissed as a “jobless recovery.”

When the U.S. unemployment rate is around 6%, it’s called a “jobless recovery.” When the Canadian unemployment is about 6%, it’s celebrated as the lowest jobless rate in a generation. The fact is that the U.S. economy, even its worst years, is still better than most other economies during their best years.

These are no small potatoes, we can quibble all day about what welfare program to support or not, but (involuntary) unemployment is a large and permanent waste on the economy, with no benefactors at all. It is also an economic indicator that directly concerns the poor. One may want Canada’s healthcare system, or Europe’s worker protection ‘rights’, but if unemployment is high it falls most heavily on the poor.

This is why I am not persuaded by Canada’s, Europe’s or Scandinavia’s economic model, we can argue to the sun comes out about whether we need more or less welfare, but when you have 6%+, 10%+, and 15%+ unemployment, your economy is clearly inferior to one that has 4%+ (and if you add in the minority unemployment rate, which is usually double and sometimes triple the average unemployment rate, those countries become downright dreadful to brown people like myself).

The full article can be found here. More can be found here.

Quote Of The Day

“One of the great mistakes is to judge policies and programs by their intentions rather than their results. We all know a famous road that is paved with good intentions. The people who go around talking about their soft heart — I share their — I admire them for the softness of their heart, but unfortunately, it very often extends to their head as well, because the fact is that the programs that are labeled as being for the poor, for the needy, almost always have effects exactly the opposite of those which their well-intentioned sponsors intend them to have.”–Milton Friedman

The Other Milton Friedman: A Conservative With a Social Welfare Program

Robert Frank, an economist at the Johnson School of Cornell University, writes in the New York Times:

The Other Milton Friedman: A Conservative With a Social Welfare Program

By ROBERT H. FRANK
Published: November 23, 2006

Milton Friedman, who died last week at 94, was the patron saint of small-government conservatism. Conservatives who invoke his name in defense of Social Security privatization and other cutbacks in the social safety net might thus be surprised to learn that he was also the architect of the most successful social welfare program of all time.

Market forces can accomplish wonderful things, he realized, but they cannot ensure a distribution of income that enables all citizens to meet basic economic needs. His proposal, which he called the negative income tax, was to replace the multiplicity of existing welfare programs with a single cash transfer — say, $6,000 — to every citizen. A family of four with no market income would thus receive an annual payment from the I.R.S. of $24,000. For each dollar the family then earned, this payment would be reduced by some fraction — perhaps 50 percent. A family of four earning $12,000 a year, for example, would receive a net supplement of $18,000 (the initial $24,000 less the $6,000 tax on its earnings).

Mr. Friedman’s proposal was undoubtedly motivated in part by his concern for the welfare of the least fortunate. But he was above all a pragmatist, and he emphasized the superiority of the negative income tax over conventional welfare programs on purely practical grounds. If the main problem of the poor is that they have too little money, he reasoned, the simplest and cheapest solution is to give them some more. He saw no advantage in hiring armies of bureaucrats to dispense food stamps, energy stamps, day care stamps and rent subsidies.

As always, Mr. Friedman’s policy prescriptions were shaped by his desire to minimize adverse economic incentives, a feature that architects of earlier welfare programs had largely ignored. Those programs, each administered by a separate bureaucracy, typically reduced a family’s benefits by some fraction of each increment in earned income. Rates of 50 percent were common, so a family participating in four separate programs might see its total benefits fall by $2 for each extra dollar it earned. Under the circumstances, no formal training in economics was necessary to see that working didn’t pay. In contrast, someone who worked additional hours under Mr. Friedman’s plan would always take home additional after-tax income.

The negative income tax was never adopted in the end, because of concern that a payment large enough to support an urban family of four might induce many to go on the dole. With a payment of $6,000 per person, for example, rural communes of 30 would have a pooled annual payment of $180,000, which they could supplement by growing vegetables and raising animals. Because these groups could live quite comfortably at taxpayer expense, there would be an eager audience for accounts of their doings on the nightly news. Political support for such a program would be difficult to sustain.

Instead, Congress adopted the earned-income tax credit, essentially the same program except that only people who were employed received benefits. One of the few American welfare programs widely adopted in other countries, the earned-income tax credit has proved far more efficient than conventional programs, just as Mr. Friedman predicted. Yet because it covers only those who work, it cannot be the sole weapon in society’s antipoverty arsenal.

This month, economic populists like Jim Webb, Jon Tester and others were elected to Congress on pledges to strengthen the social safety net. In pursuing this task, they should take seriously Milton Friedman’s concern about incentives. How might they expand support for the unemployed without undermining work incentives?

One possibility is government-sponsored employment coupled with negative income tax payments that are too small to live on, even in large groups. Most low-income people would continue working for private employers, as they now do under the earned-income tax credit. For others, government would stand as an employer of last resort. With adequate supervision and training, even the unskilled can perform many useful tasks. They can plant seedlings on eroding hillsides, for example, or remove graffiti from public spaces. They can transport the elderly and handicapped. Coupled with low negative income tax payments, wages from public service or private employment could lift everyone from poverty. This combination would provide no incentive to go on the dole.

Mr. Friedman, of course, would not have welcomed an expansion of the federal bureaucracy. But as his own observations about the provision of government services made clear, guaranteeing employment at low wages would require no such expansion. By inviting companies to bid for program contracts, government could harness market forces to control costs.

In the face of huge budget deficits, is such a program affordable? In an article in 1943, “The Spendings Tax as a Wartime Fiscal Measure,” Mr. Friedman proposed a progressive consumption tax as the best source of revenue to meet critical national objectives. In addition to reporting their incomes to the I.R.S., people would also report their savings, as they do now for 401(k) plans. The difference between income and savings is annual consumption. That amount, less a standard deduction, would be taxed at progressive rates. High tax rates on consumption by the wealthy, Mr. Friedman argued, would generate additional revenue with only minimal sacrifice. So if providing greater economic security for low- and middle-income families is an important national objective, as many voters seem to feel, there are ways to pay the bill.

By all accounts, Mr. Friedman was a generous and compassionate man, someone more keenly aware of good luck’s contribution to individual prosperity than many of his disciples. Careful students of his work will be inspired not to dismantle the social safety net but to make it more effective.

Robert H. Frank, an economist at the Johnson School of Cornell University, is the co-author, with Ben S. Bernanke, of “Principles of Economics.”

The full article can be found here. Cal Thomas has more here.

Quote Of The Day

“To dole out relief is to administer a narcotic, a subtle destroyer of the human spirit. The federal government must and shall quit the business of relief.” –Franklin D. Roosevelt

Why Credit And Not Grants

The recent winner of the Nobel Peace Prize, Muhammad Yunus, explains why he prefers to help the world’s poor with loans rather than grants of financial aid:

Many people ask, Why not just give free cash, especially under such dire circumstances? In Bangladesh, we’ve learned that when aid is free, not only do the poor get the least of it, but everyone inflates their needs. While some handouts are clearly necessary in such times, we focus on lending small amounts of money. This lets us keep costs down and rebuild funds for the next disaster. Most importantly, our Grameen banks are ready to act at a moment’s notice. They can respond to a disaster without waiting for anyone’s permission, immediately becoming like humanitarian agencies by suspending loan payments, and providing cash, food and medicines. Once rebuilding starts, the bankers keep detailed records of the money lent, and people are allowed to repay bit by bit.

The full article can be found here. Link via Greg Mankiw here.

Quote Of The Day

“I believe that in reality what has helped the less fortunate is economic growth. Today’s elderly are affluent not because of Social Security, but because of all of the wealth created by private sector innovation over their lifetimes. Government involvement in health care and education is an impediment to progress in those fields. Job training and welfare are demonstrable failures. I think that treating a national community like a family is a grave intellectual error. A national unit is an institution that creates a legal framework for a large group of strangers to interact. A family is a small group that interacts on the basis of personal bonds. Strengthening government serves to weaken families and other vital civic institutions”. –Arnold Kling, MIT economist responding to University of Chicago law professor Geoffrey Stone’s list of What it Means to be a Liberal

Quote Of The Day

“There are two main utilitarian arguments against liberal welfare benefits: First, poverty is almost always caused by bad choices—bad for those who make them, bad for their childen, and bad for society as a whole. The big one is having children out of wedlock. Liberal welfare benefits greatly diminish the cost—particularly the short-run costs—of making these choices, and thus make it less likely on the margin that people will make better choices. There’s no question that welfare programs decrease post-transfer poverty in the short run, but in the long run they tend to increase pre-transfer poverty. The second argument is that income redistribution tends to slow down economic growth, which makes all of us poorer in the long run”. –Brandon Berg, blogging at Catallarchy

Quote Of The Day

” Most of us want to help. It makes us feel bad to think of neglected children and rat-infested slums, and we are happy to pay for the thought that people who are good at taking care of such things are out there. If the numbers of neglected children and the numbers of rats seem to be going up instead of down, it is understandable that we choose to focus on how much we put into the effort instead of what comes out. The tax checks we write buy us, for relatively little money and no effort at all, a quieted conscience. The more we pay, the more certain we can be that we have done our part, and it is essential that we feel that way regardless of what we accomplish…To this extent, the barrier to radical reform of social policy is not the pain it would cause the intended beneficiaries of the present system, but the pain it would cause the donors. The real contest about the direction of social policy is not between people who want to cut budgets and people who want to help. When reforms finally do occur, they will happen not because stingy people have won, but because generous people have stopped kidding themselves”. –Charles Murray, the passage used to close his seminal work Losing Ground

How The European Welfare State Affects Women

Newsweek writes:

Here’s a pop quiz on gender equality. In which part of the world are women most likely to reach the highest rungs of power? Choice A offers new moms 12 weeks of maternity leave, almost no subsidized child care, no paid paternity leave and has a notoriously hard-driving business culture. Choice B gives them five months to three years of paid time off from their jobs after having kids. Millions put their offspring into state-sponsored day-care centers for several hours a day. Government agencies, full of female directors and parliamentarians, protect workers at the expense of business and favor a kinder, gentler corporate culture. So which place is better for women who want to make it to the top? If you guessed A, the United States, you’d be right. If you chose B—Europe—think again.

It sounds impossible, but it’s true. For all the myths of equality that Europe tells itself, the Continent is by and large a woeful place for a woman who aspires to lead. According to a paper published by the International Labor Organization this past June, women account for 45 percent of high-level decision makers in America, including legislators, senior officials and managers across all types of businesses. In the U.K., women hold 33 percent of those jobs. In Sweden—supposedly the very model of global gender equality—they hold 29 percent.

Germany comes in at just under 27 percent, and Italian women hold a pathetic 18 percent of power jobs. These sad statistics say as much about Europe’s labor markets, lingering welfare-state policies and corporate leadership as they do about its attitudes toward women. It’s not that European women are stuck in the house. (After all, 57 percent of women in the EU 15 work, less than the U.S. rate of 65 percent, but not dramatically so.) The real problem is that Europe has been consistently unable to tap the highest potential of its female workers, who represent half of college graduates in most countries. Women, it seems, can have a job—but not a high-powered career.

The full article can be found here. Link via The Liberal Order.

Welfare Reform – 10 Years Later

The 10th anniversary of the landmark welfare reform bill of 1996 is here and it is a good idea to reflect on what exactly resulted and contrast that to what people were predicting would happen. Ron Haskins, senior fellow at the Brookings Institution, writes:

It would be difficult to exaggerate the predictions of doom hurled against the Republican welfare reform bill signed by President Clinton on Aug. 22, 1996. Mr. Clinton had previously vetoed two versions of welfare reform when, with skill, daring and persistence, Republicans in the House and Senate pushed it through Congress a third time and put it again on the president’s desk. In an act of remarkable political courage, Mr. Clinton defied senior members of his own party and most of the American left and signed the radical bill into law.

The left, led by senior Democrats in Congress, the editorial pages of many of the nation’s leading newspapers, the Catholic bishops, child advocates in Washington and the professoriate, had assaulted the bill in terms that are rare, even by today’s coarse standards. Democrats speaking on the floor of the House labeled the bill “harsh,” “cruel” and “mean-spirited.” They claimed that it “attacked,” “punished” and “lashed out at” children. Columnist Bob Herbert said the bill conducted a “jihad” against the poor, made “war on kids” and “deliberately inflict[ed] harm” on children and the poor. Sen. Frank Lautenberg said poor children would be reduced to “begging for money, begging for food, and . . . engaging in prostitution.”

Many Democrats and pundits shouted that the bill would throw a million children into poverty. Marion Wright Edelman of the Children’s Defense Fund said that no one who believed in the Judeo-Christian tradition could support the bill. Even God, it seemed, opposed the evil Republican bill….

In the decade that has passed since the 1996 reforms, the welfare rolls have plummeted by nearly 60%, the first sustained decline since the program was enacted in 1935. Equally important, the employment of single mothers heading families reached the highest level ever. As a group, mothers heading families with incomes of less than about $21,000 per year increased their earnings every year between 1994 and 2000 while simultaneously receiving less money from welfare payments. In inflation-adjusted dollars, they were about 25% better off in 2000 than in 1994, despite the fall in their welfare income.

Over the same period, the child-poverty level enjoyed its most sustained decline since the early 1970s; and both black-child poverty and poverty among female-headed families reached their lowest level ever. Even after four years of increases following the recession of 2001, the child poverty level is still 20% lower than it was before the decline began. Similarly, measures of consumption and hunger show that the material conditions of low-income, female-headed families have improved. Although welfare reform was not without problems, none of the disasters predicted by the left materialized. Indeed, national surveys show that almost every measure of child well-being–except obesity–has improved since the mid-1990s.

The 1996 law, in perhaps the most direct legislative clash of liberal and conservative welfare principles since the New Deal, was a victory for conservative principles. Poor mothers scored a victory for themselves and their children, showing that given adequate motivation and support from work-based government programs, they can join the American mainstream, set an example for their children and communities, and pull themselves and their children out of poverty.

The full article can be found here.

Update: Robert Samuelson has more and Cato has
more.

Quote Of The Day

“On the face of it, America’s welfare system is harsher and less hospitable than Europe’s, something that many liberals lament. But in this respect, at least, that appearance is misleading. The unintended consequences of Europe’s milder regime are not just a looming fiscal collapse but also, in the meantime, intensifying and plainly self-destructive anti-immigration sentiment. America’s harsher insistence on work is not just economically advantageous (which is self-evident) but socially beneficial as well (which some may find surprising). Jobs alone are not enough to ensure successful assimilation of immigrants, but jobs are a necessary condition. By insisting that immigrants work, the host country attacks the incumbents’ intellectual and emotional resistance to immigration. The work requirement increases the dispersed economic benefits; it reduces or eliminates the net fiscal burdens; and it lowers cultural barriers. As a result, tempers cool. In these key respects, America’s more brutal model is kinder — in addition to bring more sustainable”. –Clive Crook, of Oxford and the London School of Economics, writing in The Atlantic