Monthly Archives: June 2018

Welfare Reform

E-Newsletter No. 54 _____ June 2018

Last month, we talked about the costs and the benefits of employment and welfare. There have been a lot of discussions lately in Washington DC about re-establishing work requirements in exchange for the “entitlement” to receive welfare benefits. Re-establishing work requirements would be a step in the right direction towards eliminating poverty in America.

However, these discussions are also somewhat mis-guided, because they fail to address the fundamental problem, which is Congress’ disregard for the Tenth Amendment and an erroneous belief that the federal government can solve the issue of poverty. The federal government can only throw money at the symptoms of the disease – – it cannot cure / eradicate poverty. Our elected officials have failed to remember the words of wisdom in Thomas Paine’s pamphlet entitled Common Sense about the fundamental differences between government and civil society.

The federal government was established to handle specific, limited responsibilities. Over the past 100 years or so, it has expanded well beyond this limited role, and this expansion has directly contributed to many of the troubling issues that currently confront our country. These social ills – – dependency on the government, a growing sense of “entitlement”, and a ballooning federal debt – – can be tied directly to the advance of Socialism.

As Dennis Prager pointed out in his video on the detrimental effects of Big Government (https://www.prageru.com/courses/left-and-right-differences/how-big-should-government-be-left-vs-right-1) “Big Government eats away at the moral character of a nation. People no longer take care of one another. After all, they know the government will do that.”

One unfortunate by-product of many pieces of legislation passed by Congress is the detrimental effects of unintended consequences. In the tax reform legislation that was passed last December, Congress significantly increased the standard deduction for personal income tax returns. We support that increase – – in The 2020 Initiative we take the position that no individual or family should be asked to pay federal income taxes until they have earned enough income to cover their own cost of living.

However, the problem with this increase in the standard deduction is that it will probably lead to a decrease in the amount of charitable contributions that are made by our country’s citizens. There have already been signs of a decrease in the amount of contributions to universities, civic organizations and religious institutions (the unintended consequences). However, we are somewhat skeptical, because this might actually have been by design – – the federal government wants to continue to crowd out civil society, and Congress wants to be seen as being the solution to all of our country’s social ills. But let’s repeat – – the federal government cannot solve the issue of poverty.

The federal government’s welfare programs simply add to the federal government’s debt. Charitable contributions made by our country’s citizens do not. This is the reason why we recommend that four national pass-through charities be established (for education, food, housing, and medical care), which would be funded by allowing a dollar-for-dollar tax credit against an individual’s / family’s federal income tax liability for the contributions to these four charities. With this change, the federal government should then eliminate all of its “non-constitutional” welfare programs, and the war against poverty should be waged by civil society at the state and local level. Local Not-for-Profit charitable organizations are closer to the action and are better equipped to deliver actual, positive results.

US Debt Clock – – May 1st – $64,606 per citizen / June 1st – $64,635