Economics 405: The Economic Problems Of The Welfare System
The Economic Problems of the Welfare System
Economics 405- Economic Problems and Issues
Describe the selected economic problem. Welfare is a drain on the economic system in America. Developed in the 1930’s, welfare’s intended purpose was to help low income Americans get on their feet, but it turned out to be a slow sinking hole with little help of getting out. The majority of individuals that rely on the welfare system are young single mothers with little education and no child support from the children’s father. While some people use this system as it was intended, there are still some that abuse it. There is another group that uses it and can’t get out which is a cycle that includes their children and their …show more content…
children’s children. There is such abuse of this system that it is unfair to the rest of society and this causes animosity towards individuals on welfare. There needs to be changes to prevent abuse of the system and make others see it in a different perspective. It should not be seen as a way of life but as a stepping stone to get back into society as a productive citizen. I have seen firsthand the many examples of welfare recipients getting benefits while lying about their income. Some have their boyfriends living with them while not reporting his income, some work under-the-table (working without paying taxes), others sell their food stamps for cash, and an extreme case of having babies to receive more benefits. We need a better screening for welfare recipients and a way to intercept the illegal abuse of our welfare system. On the other hand, our welfare system is a trap. The recipients of these benefits receive such little benefits that they feel they have to lie to make ends meet. If they work they are penalized and lose their benefits which put them back in the same situation they were in before. Most welfare recipients live in public housing, which puts them all in one place. They have no exposure to other ways of life. Grouping them together and keeping them out of other areas is like throwing them away or keeping them away from society. This does not give them any perspective of the way life should be led and they see none of the benefits of getting an education and working as they only see each other as examples.
The impact of the welfare system on society. “The single most disturbing statistic: in 2011 nearly half of the population lived in a household that receives some form of government benefit, which in turn accounted for 65% of total federal spending, or $2.5 trillion, and amount to 15% of GDP (Durden, T. 2012).”
As the graph shows there are 69 Federal Welfare Programs, spending on welfare alone was estimated to reach $940 billion in 2011 (Durden, T. 2012). The costs to our society from this are a waste. We could use the extra money to improve the education system in America and to reduce our deficit. I do not believe in eliminating the welfare system but rather change it. Besides spending money on education and other needed areas we are ending up with a society of unmarried young parents due to the fact that the welfare system rarely helps families with two parents. Our welfare system is producing uneducated, lower producing citizens into society.
Economic policy proposal for a solution. I would propose an overhaul of the welfare system, additions to the reform in the 1990’s. A time limit for benefits is acceptable but including more encouragement for employment, and two parent families. Many couples stay unmarried and separate due to the penalties of having two adults in the household. “The increasing availability and value of welfare have made marriage less attractive for unwed mothers. If the father is unskilled and has poor employment prospects, a welfare check may seem a preferable alternative. Studies indicate that young mothers and pregnant women are less likely to marry the fathers of their children in states with higher welfare benefits. Nonetheless, 70 percent of poor single mothers would no longer be in poverty if they married their children 's father (Tanner, Michael, and Tad DeHaven, 2011).” This is unacceptable, it would be better to encourage both parties to work and share childcare responsibilities. With welfare support until they have enough income to be self sufficient, this would help get the poor out of the welfare rut. Support for two months, including no penalties for working should be enough time frame for a family to be independent. Giving up certain privacy rights should be made to be accepted into the welfare program.
Home checks of welfare recipients should be performed randomly to find fraud cases and eliminate wasted money. Many recipients work from home for cash or find other ways to make money and still receive benefits.
Daycare facilities, medical clinics, and other medical facilities should be audited monthly for over charging the state. Welfare recipients are not the only ones that try to cheat the system, many facilities that receive payments from the state for services from the poor are guilty. “If more welfare mothers keep having more and more children just for the money, they are just bringing more and more future government assisted people in the world. (Krannebitter, Kyle 2008).” With this in mind, women on welfare should not receive additional benefits if they have more children while they are on welfare. They should receive birth control and job skills. Single women on welfare should also be made to file for child support before receiving any benefits. The fathers should be made to support their families rather than the …show more content…
government. I would propose a more strict control over welfare recipients’ benefits, and any childcare or medical facility that receives payments for their care. Recipients would lose rights to receive benefits but they would receive better benefits and more help when beginning employment. Divorce to receive care would not be necessary; each case would be looked at individually.
How economic theory predicts this policy would work. “The expectancy theory was proposed by Victor Vroom of Yale School of Management in 1964. Vroom stresses and focuses on outcomes, and not on needs. The theory states that the intensity of a tendency to perform in a particular manner is dependent on the intensity of an expectation that the performance will be followed by a definite outcome and on the appeal of the outcome to the individual (Expectancy Theory of Motivation 2008)." If given the skills and help needed, welfare recipients will have something to work towards without having to cheat and lie to receive the benefits they need. The government will save money by investing more help in a shorter time span. “Welfare economics: A methodological approach to assess resource allocations and establish criteria for government intervention (Zilberman, David 1999).” The government taking more control over the welfare system is important. Harsh penalties and jail time for fraud should be mandatory. The recipients that are committing these crimes are not stealing from the government; they are stealing from everyone that pays taxes.
How this policy would solve the economic problem. More control and strict rules, with better benefits will motivate and help individuals to become productive taxpayers. The money spent will be paid back when the recipient has a job rather than relying on welfare for many years. Having children not being raised in the welfare system gives them a better chance of not falling into the cycle of poverty. By not giving more money to the many women abusing the system by having babies for higher welfare payments will motivate them to better themselves. The money saved can be put towards education reform. It is time to make welfare what it was intended to be, a helpful tool in a time of need, not a lifestyle.
References
Durden, T.
(2012, January 23). ZeroHedge | On a long enough timeline the survival rate for everyone drops to zero. ZeroHedge | On a long enough timeline the survival rate for everyone drops to zero. Retrieved September 1, 2012, from http://www.zerohedge.com/news/united-welfare-states-america-2011-nearly-half-population-received-some-form-government-benefithttp://
Expectancy Theory of Motivation. (2008, January 1). Management Study Guide - Free Training Guide for Students and Entrepreneurs.. Retrieved September 1, 2012, from http://managementstudyguide.com/expectancy-theory-motivation.htm
Krannebitter, K. (2008, October 8). Regulate the Welfare Abuse. ArticlesBase. Retrieved September 1, 2012, from http://www.articlesbase.com/economics-articles/regulate-the-welfare-abuse-592020.htmlhttp://
Tanner, M., & DeHaven, T. (2011, September 1). TANF and Federal Welfare | Downsizing the Federal Government. Downsizing the Federal Government. Retrieved September 1, 2012, from http://www.downsizinggovernment.org/hhs/welfare-spending
Zilberman, D. (n.d.). Department of Agricultural and Resource Economics EEP 101 University of California at Berkeley. Welfare Economics. Retrieved September 1, 2012, from
are.berkeley.edu/courses/EEP101/Detail%20Notes%20PDF/Cha02b,Welfare%20Econ.pdf
APA formatting by BibMe.org.
Economics 405- Economic Problems and Issues
Describe the selected economic problem. Welfare is a drain on the economic system in America. Developed in the 1930’s, welfare’s intended purpose was to help low income Americans get on their feet, but it turned out to be a slow sinking hole with little help of getting out. The majority of individuals that rely on the welfare system are young single mothers with little education and no child support from the children’s father. While some people use this system as it was intended, there are still some that abuse it. There is another group that uses it and can’t get out which is a cycle that includes their children and their …show more content…
children’s children. There is such abuse of this system that it is unfair to the rest of society and this causes animosity towards individuals on welfare. There needs to be changes to prevent abuse of the system and make others see it in a different perspective. It should not be seen as a way of life but as a stepping stone to get back into society as a productive citizen. I have seen firsthand the many examples of welfare recipients getting benefits while lying about their income. Some have their boyfriends living with them while not reporting his income, some work under-the-table (working without paying taxes), others sell their food stamps for cash, and an extreme case of having babies to receive more benefits. We need a better screening for welfare recipients and a way to intercept the illegal abuse of our welfare system. On the other hand, our welfare system is a trap. The recipients of these benefits receive such little benefits that they feel they have to lie to make ends meet. If they work they are penalized and lose their benefits which put them back in the same situation they were in before. Most welfare recipients live in public housing, which puts them all in one place. They have no exposure to other ways of life. Grouping them together and keeping them out of other areas is like throwing them away or keeping them away from society. This does not give them any perspective of the way life should be led and they see none of the benefits of getting an education and working as they only see each other as examples.
The impact of the welfare system on society. “The single most disturbing statistic: in 2011 nearly half of the population lived in a household that receives some form of government benefit, which in turn accounted for 65% of total federal spending, or $2.5 trillion, and amount to 15% of GDP (Durden, T. 2012).”
As the graph shows there are 69 Federal Welfare Programs, spending on welfare alone was estimated to reach $940 billion in 2011 (Durden, T. 2012). The costs to our society from this are a waste. We could use the extra money to improve the education system in America and to reduce our deficit. I do not believe in eliminating the welfare system but rather change it. Besides spending money on education and other needed areas we are ending up with a society of unmarried young parents due to the fact that the welfare system rarely helps families with two parents. Our welfare system is producing uneducated, lower producing citizens into society.
Economic policy proposal for a solution. I would propose an overhaul of the welfare system, additions to the reform in the 1990’s. A time limit for benefits is acceptable but including more encouragement for employment, and two parent families. Many couples stay unmarried and separate due to the penalties of having two adults in the household. “The increasing availability and value of welfare have made marriage less attractive for unwed mothers. If the father is unskilled and has poor employment prospects, a welfare check may seem a preferable alternative. Studies indicate that young mothers and pregnant women are less likely to marry the fathers of their children in states with higher welfare benefits. Nonetheless, 70 percent of poor single mothers would no longer be in poverty if they married their children 's father (Tanner, Michael, and Tad DeHaven, 2011).” This is unacceptable, it would be better to encourage both parties to work and share childcare responsibilities. With welfare support until they have enough income to be self sufficient, this would help get the poor out of the welfare rut. Support for two months, including no penalties for working should be enough time frame for a family to be independent. Giving up certain privacy rights should be made to be accepted into the welfare program.
Home checks of welfare recipients should be performed randomly to find fraud cases and eliminate wasted money. Many recipients work from home for cash or find other ways to make money and still receive benefits.
Daycare facilities, medical clinics, and other medical facilities should be audited monthly for over charging the state. Welfare recipients are not the only ones that try to cheat the system, many facilities that receive payments from the state for services from the poor are guilty. “If more welfare mothers keep having more and more children just for the money, they are just bringing more and more future government assisted people in the world. (Krannebitter, Kyle 2008).” With this in mind, women on welfare should not receive additional benefits if they have more children while they are on welfare. They should receive birth control and job skills. Single women on welfare should also be made to file for child support before receiving any benefits. The fathers should be made to support their families rather than the …show more content…
government. I would propose a more strict control over welfare recipients’ benefits, and any childcare or medical facility that receives payments for their care. Recipients would lose rights to receive benefits but they would receive better benefits and more help when beginning employment. Divorce to receive care would not be necessary; each case would be looked at individually.
How economic theory predicts this policy would work. “The expectancy theory was proposed by Victor Vroom of Yale School of Management in 1964. Vroom stresses and focuses on outcomes, and not on needs. The theory states that the intensity of a tendency to perform in a particular manner is dependent on the intensity of an expectation that the performance will be followed by a definite outcome and on the appeal of the outcome to the individual (Expectancy Theory of Motivation 2008)." If given the skills and help needed, welfare recipients will have something to work towards without having to cheat and lie to receive the benefits they need. The government will save money by investing more help in a shorter time span. “Welfare economics: A methodological approach to assess resource allocations and establish criteria for government intervention (Zilberman, David 1999).” The government taking more control over the welfare system is important. Harsh penalties and jail time for fraud should be mandatory. The recipients that are committing these crimes are not stealing from the government; they are stealing from everyone that pays taxes.
How this policy would solve the economic problem. More control and strict rules, with better benefits will motivate and help individuals to become productive taxpayers. The money spent will be paid back when the recipient has a job rather than relying on welfare for many years. Having children not being raised in the welfare system gives them a better chance of not falling into the cycle of poverty. By not giving more money to the many women abusing the system by having babies for higher welfare payments will motivate them to better themselves. The money saved can be put towards education reform. It is time to make welfare what it was intended to be, a helpful tool in a time of need, not a lifestyle.
References
Durden, T.
(2012, January 23). ZeroHedge | On a long enough timeline the survival rate for everyone drops to zero. ZeroHedge | On a long enough timeline the survival rate for everyone drops to zero. Retrieved September 1, 2012, from http://www.zerohedge.com/news/united-welfare-states-america-2011-nearly-half-population-received-some-form-government-benefithttp://
Expectancy Theory of Motivation. (2008, January 1). Management Study Guide - Free Training Guide for Students and Entrepreneurs.. Retrieved September 1, 2012, from http://managementstudyguide.com/expectancy-theory-motivation.htm
Krannebitter, K. (2008, October 8). Regulate the Welfare Abuse. ArticlesBase. Retrieved September 1, 2012, from http://www.articlesbase.com/economics-articles/regulate-the-welfare-abuse-592020.htmlhttp://
Tanner, M., & DeHaven, T. (2011, September 1). TANF and Federal Welfare | Downsizing the Federal Government. Downsizing the Federal Government. Retrieved September 1, 2012, from http://www.downsizinggovernment.org/hhs/welfare-spending
Zilberman, D. (n.d.). Department of Agricultural and Resource Economics EEP 101 University of California at Berkeley. Welfare Economics. Retrieved September 1, 2012, from
are.berkeley.edu/courses/EEP101/Detail%20Notes%20PDF/Cha02b,Welfare%20Econ.pdf
APA formatting by BibMe.org.