Real Welfare Reform

Welfare reform is something people on the right often speak about during election years but rarely gets much focus or attention.  In order for any meaningful reform to happen, a couple of other dominoes must fall in place.

The Rise of the Welfare System

The dichotomy of the United States between the 1920s and 1930s is quite striking.  The former decade was a period of great success, opulence, and opportunity.  The latter decade was marked by so much failure, poverty, and dismay that, all these years later, it's symbolically known as "The Great Depression."

When the Great Depression started, there were roughly 18 million disabled and elderly, along with single mothers with children, living below the poverty line in the United States.  Churches, private charities, and local governments saw it as their collective duty to work together and provide basic necessities like food, clothing, and shelter for these individuals.  But by 1933, another 13 million Americans were unemployed, and it was no longer feasible for these private organizations to care for a swelling population of impoverished and desperate people.

"Grace Abbott, head of the federal Children's Bureau, reported that in the spring of 1933, 20 percent of the nation's school children showed evidence of poor nutrition, housing, and medical care," the Constitutional Rights Foundation explains.  "School budgets were cut and in some cases schools were shut down for lack of money to pay teachers.  An estimated 200,000 boys left home to wander the streets and beg because of the poor economic condition of their families."

If the conditions were rough for America's youth, they were catastrophic for the elderly.  At the time, the majority of elderly Americans didn't have any personal savings, retirement pensions, or fallback plans.  For those who did have investments, Black Tuesday and the stock market crash of 1929 destroyed whatever they previously laid claim to.  In other words, American society was quickly burning at both ends.

While President Franklin D. Roosevelt did focus a lot of attention on creating jobs to put unemployed workers back into money-producing jobs, he also had no other choice but to care for the 31 million-plus citizens struggling to survive.  By 1935, he had spearheaded a national welfare system – the first of its kind in American history.

The welfare system empowered local counties to give certain kinds of relief – such as food, fuel, and cash – to poor residents.  Those who were capable were required to work in difficult labor positions.  However, most individuals – young children, widows, the elderly, and the disabled – were incapable of working.

Pretty soon after the implementation of the welfare system, Roosevelt foresaw just how dangerous the continuation of government relief programs would be for the country moving forward.

"The lessons of history, confirmed by the evidence immediately before me, show conclusively that continued dependence upon relief induces a spiritual and moral disintegration fundamentally destructive to the national fiber," Roosevelt said in his 1935 State of the Union address.  "To dole out relief in this way is to administer a narcotic, a subtle destroyer of the human spirit."

It has been more than 80 years since Roosevelt spoke those words, and the national fiber of this country has been worn down.  The welfare system has created huge problems in society and we're still trying to find a viable solution that empowers the human spirit and discourages continued disintegration.

Laying the Foundation for Welfare Reform

According to data gathered during the last U.S. Census, there were nearly 110 million Americans receiving some sort of government assistance in 2012.  That's roughly 35 percent of the total U.S. population.  While 31 percent of people receiving public assistance stay in the program for less than a year, 43 percent receive benefits for three to four years.  More than one in four participants receive long-term assistance.

As was the case during the Great Depression, children, senior citizens, and single mothers are much more likely to receive welfare than other groups.

Almost every politician for a major public platform has developed a specific plan for welfare reform over the past 25 years, yet nothing significant has changed.  The reason for this is that the foundation is compromised.  For welfare reform to work, there are two key areas that must first be addressed.

  1. Education

While there will always be extenuating circumstances that force people into the welfare system, the vast majority of those who receive long-term assistance lack basic education.  When you consider that basic education is the key to finding income-producing opportunities, it makes sense that amplifying education in impoverished communities is part of the answer.

When young Americans are given a chance at receiving a quality education, they're much more likely to prioritize higher education.  (Those who receive at least one year of college education rarely ever enter the welfare system.)  And even if they don't have aspirations of attending college, they at least have the discipline and skills in place to find jobs that (a) earn money, and (b) fill their time with safe, constructive behaviors that keep them off the streets and away from situations that often lead to welfare enrollment.

  1. Financial Literacy

Financial literacy is the second foundational pillar that needs to be cemented in place before true welfare reform can begin.

According to a recent study, nearly two thirds of Americans can't pass a basic financial literacy test.  That proportion is even higher among Americans in impoverished communities where welfare is rampant.  As a result, the poor continue to make bad financial decisions and ultimately become even poorer.

There are numerous real-world illustrations of how this works.  Consider, for example, that financially illiterate families don't understand how basic things like car insurance work.  So instead of comparison-shopping for rates, they end up spending hundreds or thousands more than they have to each year.

The same could be said for loans.  Those in impoverished communities don't know how to compare loans and are much more likely to be victimized by predatory lending practices.  This leaves people with high-interest debts that are nearly impossible to pay off.

Also consider that most Americans don't understand how interest and savings work.  So not only do people find themselves carrying high-interest debts, but they also lack any sort of retirement savings plan.  As a result, they miss out on the value of compounding interest.  (Saving just $100 per month over 40 years produces an average nest egg of $150,000.)

By providing basic financial literacy to communities with high proportions of welfare recipients, fewer Americans will be duped into making foolish mistakes that compound their already difficult situations.  Ideally, financial literacy should go hand in hand with education reform.

Building a Brighter Tomorrow...for Everyone

Why do we often feel that personal success is predicated on the failure of others?  Why do we think that in order for us to be successful, others have to stay in poverty?

The truth is that our country is better when we're all collectively healthy and thriving.  Success and wealth breed more success and wealth.  By dealing with the root issues of welfare, we can give way to a brighter tomorrow for everyone.  It'll take time, but education and financial literacy must become foundational focuses of welfare reform.

Welfare reform is something people on the right often speak about during election years but rarely gets much focus or attention.  In order for any meaningful reform to happen, a couple of other dominoes must fall in place.

The Rise of the Welfare System

The dichotomy of the United States between the 1920s and 1930s is quite striking.  The former decade was a period of great success, opulence, and opportunity.  The latter decade was marked by so much failure, poverty, and dismay that, all these years later, it's symbolically known as "The Great Depression."

When the Great Depression started, there were roughly 18 million disabled and elderly, along with single mothers with children, living below the poverty line in the United States.  Churches, private charities, and local governments saw it as their collective duty to work together and provide basic necessities like food, clothing, and shelter for these individuals.  But by 1933, another 13 million Americans were unemployed, and it was no longer feasible for these private organizations to care for a swelling population of impoverished and desperate people.

"Grace Abbott, head of the federal Children's Bureau, reported that in the spring of 1933, 20 percent of the nation's school children showed evidence of poor nutrition, housing, and medical care," the Constitutional Rights Foundation explains.  "School budgets were cut and in some cases schools were shut down for lack of money to pay teachers.  An estimated 200,000 boys left home to wander the streets and beg because of the poor economic condition of their families."

If the conditions were rough for America's youth, they were catastrophic for the elderly.  At the time, the majority of elderly Americans didn't have any personal savings, retirement pensions, or fallback plans.  For those who did have investments, Black Tuesday and the stock market crash of 1929 destroyed whatever they previously laid claim to.  In other words, American society was quickly burning at both ends.

While President Franklin D. Roosevelt did focus a lot of attention on creating jobs to put unemployed workers back into money-producing jobs, he also had no other choice but to care for the 31 million-plus citizens struggling to survive.  By 1935, he had spearheaded a national welfare system – the first of its kind in American history.

The welfare system empowered local counties to give certain kinds of relief – such as food, fuel, and cash – to poor residents.  Those who were capable were required to work in difficult labor positions.  However, most individuals – young children, widows, the elderly, and the disabled – were incapable of working.

Pretty soon after the implementation of the welfare system, Roosevelt foresaw just how dangerous the continuation of government relief programs would be for the country moving forward.

"The lessons of history, confirmed by the evidence immediately before me, show conclusively that continued dependence upon relief induces a spiritual and moral disintegration fundamentally destructive to the national fiber," Roosevelt said in his 1935 State of the Union address.  "To dole out relief in this way is to administer a narcotic, a subtle destroyer of the human spirit."

It has been more than 80 years since Roosevelt spoke those words, and the national fiber of this country has been worn down.  The welfare system has created huge problems in society and we're still trying to find a viable solution that empowers the human spirit and discourages continued disintegration.

Laying the Foundation for Welfare Reform

According to data gathered during the last U.S. Census, there were nearly 110 million Americans receiving some sort of government assistance in 2012.  That's roughly 35 percent of the total U.S. population.  While 31 percent of people receiving public assistance stay in the program for less than a year, 43 percent receive benefits for three to four years.  More than one in four participants receive long-term assistance.

As was the case during the Great Depression, children, senior citizens, and single mothers are much more likely to receive welfare than other groups.

Almost every politician for a major public platform has developed a specific plan for welfare reform over the past 25 years, yet nothing significant has changed.  The reason for this is that the foundation is compromised.  For welfare reform to work, there are two key areas that must first be addressed.

  1. Education

While there will always be extenuating circumstances that force people into the welfare system, the vast majority of those who receive long-term assistance lack basic education.  When you consider that basic education is the key to finding income-producing opportunities, it makes sense that amplifying education in impoverished communities is part of the answer.

When young Americans are given a chance at receiving a quality education, they're much more likely to prioritize higher education.  (Those who receive at least one year of college education rarely ever enter the welfare system.)  And even if they don't have aspirations of attending college, they at least have the discipline and skills in place to find jobs that (a) earn money, and (b) fill their time with safe, constructive behaviors that keep them off the streets and away from situations that often lead to welfare enrollment.

  1. Financial Literacy

Financial literacy is the second foundational pillar that needs to be cemented in place before true welfare reform can begin.

According to a recent study, nearly two thirds of Americans can't pass a basic financial literacy test.  That proportion is even higher among Americans in impoverished communities where welfare is rampant.  As a result, the poor continue to make bad financial decisions and ultimately become even poorer.

There are numerous real-world illustrations of how this works.  Consider, for example, that financially illiterate families don't understand how basic things like car insurance work.  So instead of comparison-shopping for rates, they end up spending hundreds or thousands more than they have to each year.

The same could be said for loans.  Those in impoverished communities don't know how to compare loans and are much more likely to be victimized by predatory lending practices.  This leaves people with high-interest debts that are nearly impossible to pay off.

Also consider that most Americans don't understand how interest and savings work.  So not only do people find themselves carrying high-interest debts, but they also lack any sort of retirement savings plan.  As a result, they miss out on the value of compounding interest.  (Saving just $100 per month over 40 years produces an average nest egg of $150,000.)

By providing basic financial literacy to communities with high proportions of welfare recipients, fewer Americans will be duped into making foolish mistakes that compound their already difficult situations.  Ideally, financial literacy should go hand in hand with education reform.

Building a Brighter Tomorrow...for Everyone

Why do we often feel that personal success is predicated on the failure of others?  Why do we think that in order for us to be successful, others have to stay in poverty?

The truth is that our country is better when we're all collectively healthy and thriving.  Success and wealth breed more success and wealth.  By dealing with the root issues of welfare, we can give way to a brighter tomorrow for everyone.  It'll take time, but education and financial literacy must become foundational focuses of welfare reform.