Reforms III. The Safety Net.

Ronald Reagan supported a safety net for people who experience bad luck or other misfortunes, or simply temporary economic dislocation. The US is a wealthy society; we already don't let people die in the streets. The US provides considerable subsidies to children of the poor, even to children of illegal aliens. But what does society provide for a 50 year old person with no children who loses a job or has a serious accident or health problem? Nothing, until that person is destitute. Even then, that person's safety net is rather thin, and disappears upon making almost nothing in income.

The current US safety net is really a trapdoor to destitution for people who might have paid taxes all their lives, supporting programs for others. The removal of benefits upon many minimal income creates a huge barrier to climbing out of poverty. Worst, it is a system of chains keeping people in dead end jobs when entrepreneurial effort might benefit all. Any person in a job that provides health benefits must be very careful about changing to a better job; health conditions that exist might be denied coverage in the new job as a "precondition". That person can't quit to start a new business or venture as the loss of health benefits might be catastrophic. That chain is thick and strong as health problems with one's spouse or children also cause one to stick to the dead end job or avoid entrepreneurial risk.

The Safety Net

The US needs a safety net that is not connected to children. Children can be a part of it, but should not be the crucial qualifying requirement. Today we get more children in the safety net because the poor can do better by having more children, usually by multiple fathers (who don't stick around).

The crucial elements of a safety net are food, shelter and health care. Let's deal with health care - actually it's the easy one.

Health Care

The US should provide a national health benefit to all people. The shared benefit would not be connected to employment - it would apply to all people - to anyone legally entitled to be in the US. [Illegals would be treated, then deported.] The shared benefit would not be a gold plated program; it would provide basic benefits, hospitalization and prescription drugs. I've written elsewhere how such a program would be structured and funded [Oct. 21, 2009 and Nov. 24, 2009]. Coverage would be determined by a Medical Board comprised of the public - not doctors or government employees. The common man and woman decide; after all, they are paying.

Food

The existing food stamp program would be expanded and not geared to children: anyone temporarily poor would qualify. Again, a board comprised of the common man would decide what foods are covered. The poor would get a good diet with nutrition, but would be expected to do some food preparation themselves. Yes, to slice & cook. There are plenty of cheap, nutritious foods out there. I know - I prepare and eat them. That's the trade-off: more people benefit, but choice is restricted. No one starves or suffers malnutrition.

Shelter

This is tougher - housing is a locally supplied market. The current program of subsidized housing complexes don't work too well. Communities are burdened paying for education for outsiders. Drug use and violence can overwhelm the complex if too many deviants are concentrated there.

My proposal would be to use a combination of voucher programs and homesteading to start to reform and broaden the housing safety net. Vacant homes or condos in communities that are abandoned would be offered to the poor under a new homesteading law. Living there for 3-5 years plus making improvements (paint, clean-up, simple repairs) would lead to ownership on a profit sharing basis. In communities without vacant homes, vouchers would be offered to the poor or newly homeless; that would include those being tossed out in foreclosure, etc.

This shelter program is rather incomplete, but it's a start. Ideas are welcome. By the way, the homes need to be where the jobs are. The poor might have to move to new communities; again, some kind of vouchers can help here, too.

Basic Income

My tax reform proposal cuts the cord that ties Social Security to employment. taxes that currently fund unemployment benefits are badly constructed: they tax jobs. Combine Social Security, disability and unemployment benefits into a single, simple safety income net. The benefits are not connected to how much you made in your prior job; anyone who worked gets it. The amount and time one would receive the benefit would be related to how long as you worked prior thereto. Thus the person who works for decades, then lost a job gets much longer support and more in hardship. At a certain point one would qualify for their entire retirement years.

For the young or those who haven't worked enough, work would be required and jobs offered when benefits run out. This is fair. In the New Deal, people happily took tough, dirty jobs at low pay simply to have some work and income. The US should offer that. Simply working to paint, pick up trash, plant flowers and clean communities would benefit all. Many other jobs are obvious to anyone driving or walking around with one's eye's open.

Summary

This safety net is not perfect, but it's a good start. The cost is mostly being paid already under many ineffective, complex programs. Benefits should not drop instantly upon making some income, perhaps only upon making a certain aggregate $ amount based on time and income. Let people recover and climb out; don't pull the lever for the trapdoor so again right away. Lower the walls that now keep people poor forever.

One helping hand: remove rules that resticts entrepreneurialism. That's for tomorrow.

Word of the Day

"Opprobrium" - noun [$10]
Opprobrium means 1. something that brings disgrace; 2. public disgrace or ill fame that follows from conduct considered grossly wrong or vicious.
Sentence: To paraphrase Pericles: There is no opprobrium to poverty itself, but to not striving to climb out.