What if the implementation of welfare programs perpetuates more welfare programs? In other words, do welfare programs have some positive feedback effect inducing further creation?
The reasoning is pretty simple. Let’s assume that welfare programs help the poor very slightly in the short term, but hurt the poor to a greater extent in the long term. Poor are made a little better off, but they don’t have as strong an incentive to work, to learn, to innovate, to create, to problem solve, etc. These stronger incentives will lead the poor to a more prosperous future in the long run than the handout program.
To simplify this model, I’ll make another assumption: the short run will be defined as the current adult’s life who receives the handout. The long term will be defined as the poor adult’s children and all the future children’s children.
Ok, the current generation is made a bit better off with the handout. The children are made relatively worse off with the weak incentives. They also get a handout (later), but are left in much the same place as their parents. The political party that generally favors these sorts of handouts will keep receiving votes from the poor group. It is only human nature to want more and the benefits are to the current generation (the self interest). Therefore, the poor keep voting for welfare programs that damn their children to future poverty.
The parents of the poor may care for their children and want them to become wealthy. But since they lack education (have imperfect information), they remain unaware that their voting is perpetuating the problem. Once again the government handout creates less of an incentive to learn (and poor people are relatively less educated than non-poor form the start).
You are left with the current generation perpetually depressing wealth of future generations.
This argument is so clean and simple it bothers me. The assumptions are too basic and need some more sophistication. Maybe there is a kernel of truth to it though.
An area where such a discussion will invariably lead is the value of life. How can we choose between a life today and a life tomorrow? There seems to be some justification for welfare programs along these lines. By an unlucky draw in the lottery of birth one man was made so poor that he received no education or money and will surely die before the age of 20. Let him die and he won’t bear another son into the same situation to perpetuate the problem. But how can I justify letting him die when the cause is almost surely pure chance. Are all human lives counted the same? Should we discount future human life?
These are questions I must ponder.