Safety Net vs. Welfare System


       Recently, I received the following information from a recipient of these weekly 2 Paragraphs. She had, in turn, received the information from, which is a religious-based, free market news organization for the black community.  From my standpoint, this information is probably accurate, but even if it isn’t, it describes the pitfalls, unfairness and extremely expensive nature of our nation’s welfare system.  Here is what we received:

For a guy and his girlfriend with two kids all you have to do is follow these proven steps:

1. Don’t marry her!
2. Always use your mom’s address to get your mail.
3. The guy buys a house.
4. The guy rents out the house to his girlfriend with his 2 kids.
5. Section 8 will pay the girlfriend $900 a month for a 3 bedroom home.
6. Girlfriend signs up for Obamacare so guy doesn’t have to pay for family health insurance.
7. Girlfriend gets to go to college for free being a single mother.
8. Girlfriend gets $600 a month for food stamps.
9  Girlfriend gets a free cell phone.
10. Girlfriend gets free utilities.
11. Guy moves into home, but continues to use mom’s address for his mail.
12. Girlfriend claims one kid and guy claims the other kid on their tax forms.  Now both get to claim head of household for a $1800 credit.
13. Girlfriend gets $1,800 a month disability for being “crazy” or having a “bad back,” etc., and never has to work again.

This plan is perfectly legal and is being executed now by millions of people.  On the other hand, an honest married couple with a stay-at-home mom yields $0 dollars.  But an unmarried couple with stay-at-home mom using this approach each year nets $21,600 disability + $10,800 free housing + $6,000 free Obamacare + $6,000 free food + $4,800 free utilities + $6,000 Pell Grant money to spend + $12,000 a year in college tuition free from Pell Grant + $8,800 tax benefit for being a single mother, which equals $75,000 a year in benefits!

Fully as harmfully, there are no incentives for recipients to get a job or otherwise improve their lives.  And that is why welfare has been a trap for people for generations!  Instead, adopting the changes to the income tax system proposed several times in this 2 Paragraphs in combination with the Safety Net would both encourage honesty and always provide incentives for people to earn the extra dollar.  That would be beneficial for everyone, and would completely replace all other welfare programs – as long as allowances were made for those with special needs. Under this approach, no one would pay any income tax on their first $30,000 per year. But there would be a stipend of $15,000 per year for everyone in our country who is over 18, here legally and earns no money – probably broken into monthly payments of $1,250.  But, all importantly, the recipients would lose 50 cents from the stipend for every dollar earned up to $30,000 per year, so they would always have an incentive to earn the extra dollar.   (By the way, this would also materially reduce the homeless problem, because the free market would quickly provide inexpensive room and board facilities which could be paid from that stipend.)  So what do you think?  How does the Safety Net approach compare with the Welfare programs?

Judge Jim Gray (Ret.)
2012 Libertarian candidate for Vice President, along with
Governor Gary Johnson as the candidate for President