Liberty Pen: Professor- Milton Friedman- 'The Welfare Establishment (1978'

Source:Liberty Pen- Professor Milton Friedman, giving a lecture in Chicago about the American economy and government, in 1978.

"Professor Friedman looks at the dynamics of the welfare state. Liberty Pen."

From Liberty Pen

The term “Welfare Establishment”, I find interesting, because it suggests that there’s a group of people, who get together to design social insurance programs for people, who for whatever reasons can’t support themselves. Or these programs go to help these people support themselves. That these people get together to plan how they are going to take care of low-income low-skilled people. With other people’s money. Which is my main problem with the welfare state. 

I don’t support the idea of a welfare state, because a welfare state is basically for anyone who pays into them and it makes people dependent on them, because they expect to get them. And less independent than they can be, because they know they have these Welfare programs coming their way to take care of them. And people on Welfare, feel that they don’t need to work as hard. Or be as productive as they can be, because again they have these Welfare programs coming their way to take care of them. 

I believe in a safety net which is different. A safety net, is for people who needs it, who don’t have a large enough pension fund to take care of them, can’t afford enough health insurance once they retire, can’t afford enough health insurance while they are working. Lose their job and can’t find new work right away. Can’t afford a home on their own, can’t afford private education, etc. 

Basically a safety net, is for the people who lack the skills to take care of themselves for whatever reasons, but then its up to the safety net especially since its funded by taxpayers, to help these people who are physically and mentally capable, to get the skills that they need to be able to take care of themselves.

If we had a public assistance system that was about self-empowerment instead of dependence, guess what, fewer people would need public assistance, because more people would have the skills to take care of themselves. Which would make these social insurance programs more cost-effective and efficient, because fewer people would need them, because they would be supporting themselves and be self-sufficient. 

Its basic economics and more people would instead be paying into public assistance, instead of collecting from it. Which is why people who can fund their own retirements, unemployment, health Insurance etc, should be doing exactly that. Instead of collecting from Social Security, Unemployment Insurance, and Medicare.

Again, welfare state is for everyone, whether you need it or not and now we are wondering why we are going to have trouble funding it. Safety net, for the people who need it that empowers those people to be able to take care of themselves and be self-sufficient so we have fewer people dependent on public assistance. Two different concepts when it comes to social insurance. 

Social insurance, should be exactly that: a social insurance system, that people can collect from when they need it. That buys them time and allows for them to pay their short-term bills. While they are putting themselves back on their feet, or on their feet for the first time in their lives, because they grew up on Welfare and perhaps never saw their parents work at all. And made similar mistakes as their parents. Like dropping out of high school and having kids before they were ready to take care of them. 

You can also see this post on WordPress.