New Book: Can We Privatize The Welfare State?

FOR IMMEDIATE RELEASE

DALLAS, TX, June 10, 2015 – A new book by Goodman Institute Senior Fellow Peter Ferrara argues that individual responsibility and the marketplace can solve problems much better than government transfer programs. The case is made in Power to the People: A New Road to Freedom and Prosperity for the Poor, Seniors, and Those Most in Need of the World’s Best Health Care.

America’s welfare state, he tells us, is a “vast empire” that spends a trillion dollars a year on 185 federal-state means tested programs. The total spending equals about $17,000 a year per poor person, or more than $50,000 for a family of three. And most of this is completely unnecessary:

For anyone who works full time in the United States — the minimum wage, augmented by the Earned Income Tax Credit and the Child Tax Credit equals or exceeds the poverty level for every possible family combination, including single persons with or without children.

In 1960, nearly two-thirds of the families in the bottom fifth of the income distributions were headed by someone who worked. By 1991, only one-third of these households were headed by someone who worked and only 11% worked full time. Early on in the War on Poverty, the federal government’s own studies showed the devastating effects it was having. In the guaranteed income experiments of the 1970s, for every $1 of extra welfare given to low-income people, they reduced their labor earnings by 80 cents.

Ferrara reminds us that welfare reform has been phenomenally successful. The AFDC welfare rolls were reduced by two-thirds. Yet because of the increased work effort on the part of previous recipients, the total income of low-income families increased by 25%!

But this success only reflects the reform of the AFDC (cash welfare) program — where federal funds were block granted and work requirements were imposed. Ferrara wants to do the same thing with the 184 other means tested programs.

See John Goodman’s review of the book at Forbes.

 

About John C. Goodman

Dr. Goodman, an author, health economist, and Senior Fellow at The Independent Institute is considered the “Father of Health Savings Accounts” and serves as president of the Goodman Institute, a think tank that focuses on the areas of health care, taxes and entitlement reform. Goodman served as the founder and president of the Dallas-based National Center for Policy Analysis (NCPA) for 31 years, and regularly appears on television and radio news programs, including those on the Fox News Channel, CNN, PBS, Fox Business Network and CNBC. His articles appear in The Wall Street Journal, Investor’s Business Daily, USA Today, Forbes, National Review, Health Affairs, Kaiser Health News and other national publications. Currently Goodman is working with members of Congress on an alternative to ObamaCare. Visit www.goodmaninstitute.org.

 

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