The solution to poverty is not more money or more programs. In fact, the current hodgepodge of programs that make up our public welfare system has contributed to a lifestyle of poverty—being hooked on welfare is nearly as bad as being hooked on drugs. Both lead to lifelong poverty and the loss of human dignity—while overburdening the taxpayer with huge costs.
Welfare programs were created to solve individual problems: hunger, housing, education, and health care with little coordination or communication between programs. Food, for example is dished out by a variety of programs. Food Stamps, a Department of Agriculture program, is the main source of nutritional help. But other programs have been developed to alleviate small disparities including WIC (Women, Infants, and Children nutritional program) an 8 billion dollar program overlapping Food Stamps. National school lunch and breakfast programs have been added, and now, it seems, people are demanding dinner, too. Basic commodities, milk, bread, and cheese are handed out by another program. Besides various city, state, and federal programs, there are numerous church and civic organizations handing out food to those in need. Food pantries have become a way of life for some. Yet we still have hunger in America.
The current welfare system rewards the bad and penalizes the good—the more irresponsible a person is, the greater the benefits. A girl who drops out of high school has a greater chance of being eligible for benefits than a graduate. An unmarried woman with five kids has a greater chance of free housing, health care, food, utilities, and transportation than a single, working mom with two child. A working class family can’t afford health care insurance for their children, while the person who never worked a day in his life gets free health care. A middle class working adult can’t afford an attorney, but a drug addict with twenty arrests and no job gets free legal services. When an individual is laid off, if he or she quickly finds a new job, the individual receives no unemployment benefits, but a laid-off co-worker who takes time off to party or go fishing, collects substantial unemployment insurance benefits. A worker who is hurt on the job and continues to work through the pain receives no compensation, but a co-worker with the same injury, ends up on worker’s comp, and is paid for lying around the house. The inner city kid with a B average doesn’t go to summer camp, while the troublemaker goes to camp—under the pretense that summer camp will build self-esteem and help him succeed in life. Doing the right thing in America goes unrewarded while doing the wrong thing is richly rewarded.
Poverty is a choice. People have chosen to use the welfare system instead of achieving in school or finding success on the job. Making a living on welfare has become a way of life, and it’s the main reason vast numbers of people remain on the cusp of society. In the inner city, it pays to drop out of high school, have children out of wedlock, and sell drugs on the street corner. It doesn’t pay to graduate high school or work at a minimum wage job. Why study in school or work at a miserable job, when the government will provide? The bottom line: the welfare system has failed—taking away individual responsibility and human dignity, while penalizing the middle and working class, who pay an assortment of taxes including property taxes, sales tax, utility taxes, and Social Security so the elitist poor can receive enormous amounts of housing, food, and health care.
After spending massive amounts of money, America is no closer to solving poverty today than when Johnson instituted the Great Society in the 1960s. America needs real reform, not more of the same old programs or bigger programs or more funding. By revamping the welfare system, some of these inequitable rewards can be fixed.
Unemployment insurance is the most abused program in America. For some, getting laid off is like getting a chunk of early retirement. An individual plays around until his benefits run out and then gets another job, all at the expense of his last employer. The responsible worker who runs out and finds a new job doesn’t get any benefits. In fact, the more responsible he is the bigger the penalty he pays. Occasionally there are no jobs available and unemployment insurance is a lifesaver. But illegal aliens flowing across the border are finding jobs in the same cities that people with unemployment benefits can’t.
Worker’s Compensation Benefits
The Sheriff’s Department, here in Dallas, had nearly one third of its workers sitting at home on worker’s compensation. Before worker’s comp, an individual would ask the doctor how soon he could get back to work. Today the question is “how much money will I get, and how long will I get it?” Besides paying people to stay at home, worker’s comp can double or triple health care costs as doctors treat imaginary pains and illnesses.
People sell their Food Stamps for cash and receive basic commodities from WIC or a church-based food pantry. In fact, a woman with three kids, no job, and getting Food Stamps has to sell her stamps. If her allotment is three hundred dollars a month, she can sell them for two hundred dollars—a hundred dollar loss to the taxpayer. The fifty dollars per week spending money for gas and other necessary items is a more pressing need than food. The women can depend on the school feeding her kids breakfast and lunch. Dinner is made up of food from a food bank, church or other charitable outlets—it makes no sense for a poor person to use Food Stamps. The homeless qualify for Food Stamps, but giving Food Stamps to people without a kitchen makes no sense—the homeless sell their stamps and eat at some other government or charity funded soup kitchen.
The Department of Housing and Urban Development has turned the poor into renters with very little hope to escape poverty, in one of the worst program imaginable. Subsidizing rent is a never-ending process that temporarily benefits the poor and permanently benefits the wealthy, while penalizing the middle and working class taxpayer.
The investor/developer buys or builds a house or apartment complex and leases it out to the poor. The government subsidizes an individual’s rent payment, while the investor acquires massive tax relief. This is a typical American program, the rich get richer, the poor get cheap rent, and the middle class pays the bill.
It does no good to pay somebody’s rent for a year, two years, or ten years. When the renter is taken off the program, he or she has not gained a single thing, other than easy living for a few years. Homeowners have the pride of ownership and the goal of paying off the house. A renter has no pride in ownership and no goal other than staying on the program. They do little to improve their job skills, turn down promotions or transfers, and refuse to take better jobs, all because of the fear of losing their rent subsidy.
This is how silly our social welfare system has become. High school dropouts, drugs addicts, alcoholics, petty criminals and the mentally ill, show up in their mid-to-late-thirties as the homeless. It’s all the same people and all the same problems.
We spend money to keep kids in school—they blow off school. We spend money on drug rehabilitation—they blow off rehab. We spend money on our mental health system—they blow it off. After an individual alienates his family, friends, and society in general, he becomes homeless. Then a new set of advocates and facilitators start screaming about the rights and needs of the homeless.
After a lifetime of total irresponsibility, the taxpayer is supposed to pay for more housing, health care, and other needs. On top of that, we’re supposed to feel sorry for him or her. The homeless ought to feel sorry for us—the taxpayers. But the homeless are some of the most ungrateful people anywhere.
College students are borrowing massive amounts of money to pay tuition and living expenses. At the same time, they have drastically increased the time before they become consumers. Thirty years ago, a college student could purchase a new car and furniture soon after graduation, but with today’s heavy student loans, the same purchases are put off, sometimes for years, while he or she pays off the loans.
Part of the reason is cheap foreign labor, which keeps salaries low. Cheap labor has become a huge burden for the middle class college student. Years ago a student could work part-time during the school year and full-time in the summer, earning enough to pay tuition, books, and living expenses. Today’s students aren’t going to work twenty hours a week at fast food restaurants earning six bucks an hour. A hundred twenty dollars a week barely covers gas and food and certainly won’t cover books, tuition, and rent.
Student loans have produced an artificial environment pushing up the cost of tuition and forcing students to borrow increasing amounts of money to stay in school. At graduation, some students are so heavily loaded with school loans; they’ll spend twenty years paying them off.
Junking the System
The entire welfare system, including school loans, worker’s compensation, unemployment insurance, and all of the various food programs should be junked.
The federal government would limit welfare to four basic programs:
1)A sixty thousand dollar guaranteed loan
2)Subsidized home mortgage
4)Public health care
The Guaranteed Loan Program, (GLP)
We have an in-kind system, meaning we hand out food, housing, health care, mental health care and drug rehabilitation as needed. Instead of piecemeal services, workers’ comp, unemployment insurance, student loan programs, and all other programs would be junked. Every Americans would have a sixty thousand dollar guaranteed loan. An individual would be given a thousand dollars per month to use the money for rent, food, school, and health care.
Go back to the late 1950s and early 1960s and search social work journals, there are numerous articles about a guaranteed income program. A guaranteed income is cheaper to administer, and it puts the burden on the welfare recipient to learn how to function in a responsible manner.
Each American would have a sixty thousand guaranteed loan that would be available to cover educational expenses, periods of unemployment and work-related injuries. The money would be paid at a thousand dollars a month for up to five years. Obviously, we wouldn’t give an eighteen-year-old kid sixty grand—it would be gone in sixty seconds. The money would be available at eighteen if enrolled in an educational program—college or approved trade school, or at twenty-one.
An exception to the age limit would be granted to a pregnant girl and fathers under the age of twenty-one. Money from the GLP program would be used to offset doctor bills and other related costs—both the mother and father would be responsible for one-half the cost. There would no longer be free rides for pregnant teenagers or teenage fathers.
Every single America citizen would have money available for college tuition and living expenses. Married couples having their first child could take up to a thousand dollars a month from the fund to offset living expenses while she is pregnant and staying at home during the baby’s first few years. Any individual wanting to take a year off could use the money without questions.
Once the sixty thousand dollars is gone, it’s gone, and it’s a loan, not a gift or grant and has to be repaid. The interest-free loan would be paid back in the following manner.
1) Individuals with income under $12,000 would repay the loan at 5 percent a year.
2) Individuals with income from $12,000 to $44,000 would repay the loan at 10 percent a year.
3) Individuals with income over $45,000 would repay the loan at 20 percent a year.
If a college graduate used up the entire amount during his school years and found employment at fifty thousand dollar a year, it would take six years to repay the loan. A laborer with an income of 25 thousand would pay the money back at 10 percent of his salary until it was paid in full—twenty-four years or so, but he would pay it back.
An unemployed worker could tap into the fund. The employer’s liability would be fixed, say three thousand dollars per employee, and that amount would be added to the employee’s GLP account. If a person finds a new job quickly, he would benefit, while the co-worker who decided to take time off could use up the three thousand or more, but the “or more” would be his own money. This program returns partial responsibility to the employee to find work, and rewards the workers who seek out employment, while penalizing the workers who don’t. That’s the way it should be. Unemployment insurance has become a free ride for lazy people.
Payment for injuries on the job would be fixed, based on the average recovery time. A broken arm might be worth a thousand bucks. One employee might go right back to work, while a second employee might take two months off. If he did, one month would be at the expense of his employer and one month at his own expense. A broken leg might be three thousand dollars, serious injury obviously more, but at a fixed amount unadjusted for socio-economic status. All employees would be treated exactly the same.
Having one program for student loans, unemployment insurance, welfare, and workers comp would reduce the administrative cost of the programs and provide basic income security for all Americans. On top of the security that it provides, there is the catch. It’s a loan. If an individual wins a poker tournament, the lottery, receives an inheritance or an injury settlement, the fund would be brought back to its maximum of sixty thousand dollars. At an individual’s death, the fund would be repaid from his assets and PRA before family members receive their inheritance.
All American citizens would qualify for the loan. Becoming an American citizen wouldn’t mean being fully invested in the Guaranteed Loan Program. New citizens would have to pay 10 percent of their salary for ten years before they are invested. This is a program for America and for Americans.
None of the money could be used in a foreign country. If a recipient moves out of the United States, the account balance would be reduced to zero. On their return, the recipient would have to pay into the account until it was back to the full amount. Americans can’t afford to finance a leisure lifestyle for anyone. No one in jail or prison for more than a month would qualify. In fact, the opposite would apply. Prisoners would continue to pay back money from his prison job, until his loan of sixty thousand was fully paid.
The poor in America and irresponsible young adults will drain their account. But when the money is gone it’s gone. This limits the taxpayers’ liability to sixty-thousand dollars per person. When it’s gone, the recipient would have to do without or go to work and begin to repay the loan. A GLP account would limit the free ride and force people into the working marketplace.
Subsidized Home Mortgage
Affordable housing, which subsidizes the rent for qualified applicants, has turned the poor into renters. HUDs budget for affordable housing is approximately 18 billion dollars a year. The current amount of assistance per tenant varies—it can run from a few hundred dollars per month to a thousand dollars or more.
A woman with kids rents a house at a thousand dollars per month—enrolled in the affordable housing program, she might pay three hundred dollars in rent, while HUD pays an additional seven hundred dollars. Ten years later, the kids are grown and gone, but the woman stills needs help and fights to stay in the program—a lifetime of assistance. The affordable housing program encourages the poor to stay poor, and abuses the taxpayer by paying more, sometimes several times more, than what the house is worth.
The Subsidized Home Mortgage would be very similar to affordable housing, but the individual would own the home. It would be a one-time housing break for those who meet the income guidelines. The value of the house couldn’t exceed 60 percent of the median price of homes in the region. The house and yard would have to be maintained, and the applicant would have to take classes on home repair and maintenance.
Once an individual finds a house, the federal government would buy it and sell it back to the housing applicant on a contract for deed—subsidizing the mortgage payment—instead of subsidizing rent payment. The goal for the recipient would be to pay off the principal balance just like any homeowner.
The median price of a house in America is roughly $160,000; the average cost of a house would be $96,000. At $96,000 per house, HUD would be able to buy 200,000 houses per year—based on a family of four, 800,000 people would be enrolled per year. Because the applicant would have to pay taxes and insurance, there would be no more tax dollars spent and very little administrative cost.
The minimum payment would be property taxes and homeowner’s insurance/fire policy. In Texas, that would run about $3,600s a year—$300 per month. Depending on income, the applicant would pay back the principal until they repaid HUD the original cost of the house. Some inner city residents may want to buy in the suburbs, while others might choose a cheaper house in the inner city where the taxes are lower. But it would be up to the applicant where they lived and how expensive the house—the price would not exceed sixty percent of the medium home price in their housing market.
The subsidized home mortgages would be a one-time deal. The applicant would not be allowed to trash one house and buy another house through the program. If the applicant defaults on the tax and insurance, the federal government would be forced to foreclose on the house. The recipient would have to find their own house at their own cost. HUD would be allowed to accept money from private foundations and charities to offset the tax and homeowner’s insurance for the individuals who are sick, elderly, or unable to pay. But they would not be allowed to use government funds to cover taxes and homeowner’s insurance.
The catch is that the original cost of the house has to be repaid. One recipient might pay his or her taxes and homeowner’s insurance. When the house is sold, they would have to pay back the original cost of the house. But if they had paid back 100 percent of the principal, they would keep the proceeds. In the event that the house was leased out, principal payments would be accelerated and interest on the loan would be added.
Affordable housing forces the poor to rent—a never-ending cost to the taxpayer, while the affordable mortgage limits taxpayers’ cost. At the same time, it would give the poor the pride of ownership, building self-esteem.
The third program would be a National Food Bank. A National Food Bank would supply hamburger, chicken, milk, bread, beans and other staples—food, real food that is the basic need for life. The taxpayers would not supply the poor with cake, pie, soda pop, or other junk food. The Department of Agriculture would end the Food Stamp program, WIC, and other food programs, including the school lunch program. They would buy or build grocery stores—no leases or rent—and contract with food producers for milk, chicken, hamburger, rice, beans, bread, and pasta. The poor would register and pick up a week’s worth of food—Food Stamps or money wouldn’t be needed. They would be expected to prepare the food just like middle class Americans. Families would have their food supply monitored so commodities couldn’t be resold or exported out of the country.
The current Food Stamp program is the most inefficient program ever invented. We issue Food Stamps to twenty million individuals. They go out and buy twenty million loaves of bread at two dollars per loaf—the rich get richer. With a National Food Bank, the government would purchase the same twenty million loaves of bread, at a quarter of the cost—fifty cents per loaf or less. The government would save billions of dollars buying in bulk, while the administrative cost of a food bank would be lower than the various programs that are being used today. The food bank would negotiate contracts with national bakeries, milk producers, and food producers. The company winning the bid would have to be legitimate producers selling to legitimate grocery outlets.
America still has hunger, because so much of our effort is wasted—from government irresponsibility to outright fraud. It’s the parents’ responsibility to feed their children. It’s not the school’s or the taxpayer’s duty. Parents who don’t send lunch money with their child or a sack lunch would be arrested for neglect—they could explain to a judge why they are too lazy to fix a lunch for their child. Across America, irresponsible people have children, sometimes many children, expecting the taxpayers to feed, clothe, house, and care for them. This has to change. Parents have to be responsible for their children, and they should be disciplined when they don’t assume that responsibility. It’s time to force people to be responsible citizens and responsible parents.
Some people, who need help, never get it, while others have received hundreds of thousands of dollars in welfare benefits—welfare families know how and where to get the money and are always first in line. Some families have cost the taxpayers millions of dollars in health care, drug rehab, food, housing, legal, and criminal justice costs. That has to end. A limit should be placed on the elite welfare recipients, while basic programs would be expanded to help the working class of America.
The federal government would be limited to four social programs including the National Guaranteed Loan, a Subsidized Home Mortgage, the National Food Bank, and health care (see chapter eight). In essence, we give the poor a small loan, a house, and food, what they make of it is up to them.
We are a charitable nation. Most Americans are willing to help the poor, and many of us give to food drives and other charities. But at some point, we have to realize that too many people are abusing the system. If the federal budget were balanced, if the federal government hadn’t had to borrow 9 trillion dollars to keep all of these programs floating, there would be no room to complain. But dysfunctional, expensive programs that don’t work are a luxury that America can no longer afford.
 I’m not disparaging people who have been truly injured on the job. Worker’s comp is heavily abused and most people know that.
 In the news, a scandal is unfolding as big banks offered kickbacks and fixed interest rates for millions of student loans. This isn’t breaking news or even developing news, it’s old news. When hasn’t big business taken advantages of federal programs? Look at the health care system—run-away health care costs have drained government’s coffers. We can’t afford to build public roads anymore. NASA is spending billions on old junk. Iraq’s redevelopment is a mess. Katrina relief is a mess in a large part due to big business— its never-ending corruption and poor government management. Everywhere we look big business has duped the taxpayer into paying big bucks for very little in return.