One of the main problems with a welfare system (or “safety net” as it’s now more commonly called), is that the incentives can often work against the person on the system, rather than for it. The point of a welfare system is to help those who need it, but not to enable them. Many studies, such as this one by CATO, find that those on welfare often face huge tax burdens the moment they go off of welfare, incentivizing some to remain on the system, and can lead to problems like this. This is a problem that is acknowledged on both sides of the aisle. So, how can it be fixed? Some advocate simply doing away with the welfare system as a whole. I used to hold such a view, but I’m not sure it’s really feasible. Others try to fix the system through the legislative process, but that tends to lead to confused and often contradictory policies (for example: minimum wage legislation reduces the quantity demanded for workers but the EITC increases it. The two essentially cancel each other out).
Here is what I propose: guaranteed income for all adults. This would be in lieu of, not in addition to, the current system. So, scrap everything: Social Security, SSI, food stamps, WIC, minimum wage, etc etc, and replace it with a guaranteed income that falls as one’s income increases.
Let me try to explain how this would work with some contrived numbers:
Every adult is guaranteed an income of at least $10,000/yr. If s/he get a job that pays them $3,000/yr, they now get $7,000/yr from the government. If they get a raise that pays them now $5,000/yr, their government check is now $5,000. If they make $10,000+, they get nothing.
I believe this would solve many of the problems with the current US welfare system, such as the disincentive to work or the fact that even billionaires get Social Security. Is it ideal? No. But it certainly would be a step up from the current system, and I think both Republicans and Democrats could get behind it (although perhaps not as it would take away much of their power to hand out special interests).