Free To Choose - Milton Friedman on The Welfare System (1978) | Thomas Sowell

After World War II, New York City authorities maintained rent controls supposedly to help its poorest citizens. The intentions were good. This and the Bronx was one of the results. In the 1950s, the same authorities were taxing their citizens, including those living in the Bronx and other devastated areas. beyond the East River to subsidize public housing, another well-intentioned idea, but poor people are paying for these subsidized apartments for the rich when the government at the municipal or federal level spends our money to help us make strange things happen, the idea What the government had to protect us became accepted during the terrible years of the Depression, capitalism was said to have failed and politicians were looking for a new approach.

Franklin Delano Roosevelt was a candidate for president, he was governor of the state of New York in the mansion of the governor in Albany met repeatedly with friends and colleagues to try to find some way out of the depression the problems of the day had to be solved through government action and spending the measures FDR and his associates discussed here derived from a long line of past experiences some years ago. Some of the roots of these measures date back to Bismarck's Germany in the late 19th century; the first modern state to institute old-age pensions and other similar government measures in the early 20th century, Britain did the same under Lloyd George, and Churchill instituted old-age pensions and similar schemes.

These precursors of the modern

welfare

state had little effect in practice in the United States, but they did have a very large effect on intellectuals on campus, such as those who gathered here with FDR, the people. Those gathered here had little personal experience of the horrors of the depression, but they were sure they had the solution in their long discussions as they sat around this fireplace trying to devise programs to deal with the problems posed by the worst depression in the world. history of depression. In the United States they were naturally inspired by the ideas that prevailed at that time, the intellectual climate had become one in which it was taken for granted that the government had to play an important role in solving problems to provide what which was later called security in front of others.

From the cradle to the grave Roosevelt's first priority after his election was to address mass unemployment A public works program was initiated The government funded projects to build roads, bridges, and dams The National Recovery Administration was created to revitalize industry Roosevelt wanted to see America move toward a new By the time the Social Security Act was passed and other measures followed, unemployment benefits,

welfare

payments, distribution of surplus food, with these measures, of course, came rules, regulations and bureaucracy, as familiar today as they are novel, then government bureaucracy began to grow and has been growing ever since.

This is just a small part of the social security empire today its headquarters in Baltimore has sixteen rooms this size all these people are distributing our money with the best possible intentions, but at what cost in the 50 years since the Albany meetings have we given more to the government? and more control over our lives in our income in New York State alone these government buildings house 11,000 bureaucrats who administer government programs that cost New York taxpayers $22 billion at the federal level alone the Department of Health, Education and Welfare has a larger budget than any government. In the world except Russia and the United States, these government measures often do not help the people they are supposed to help.

Richard Brown's daughter Halima needs constant medical attention. She has a defect in her throat and must be on a respirator to breathe. We will survive the nights when she is an expensive treatment and the family can be expected to qualify for a Medicaid grant. No, I am not receiving it because I am not eligible to receive it. I earn a few dollars too much and the salary I earn I can't do. I can't afford to just live and save. I have a question and I want to say, we live, we live from payday to payday, I mean literally payday to payday.

This trunk is not made any easier by the fact that mr. Brown knows that if he quit his job as an orderly at Harlem Hospital, he would qualify for government assistance and be better off financially. It's a terrible pressure for him, but he is proud of the work he does here and he is strong. enough to resist the pressure mr. Brown, uh, and you're fully dilated, so I'm here to take you to the delivery room, try not to push, please, do you want to have a nice sterile birth, mr. Brown has found out the hard way that welfare programs destroy an individual's independence.

Now considering welfare, we went to see if we could apply for welfare, but we were told that we were only eligible for five dollars a month and that to receive this five dollars we would have to cash in on our son's savings bonds and that's not even worth it. the sorrow. Anyway, I don't believe in something

free

. I think a lot of people are able to work and willing to work, but that's how it's set up. It is the mother and the children are better off if the husband does not work or if the husband is not fair and this divides so many poor families.

One of the saddest things is that many of the children whose parents receive welfare, in turn end up in the welfare trap when they grow up in this public housing project in the Bronx, New York, three quarters of the families Now they receive welfare payments, well, sir. Brown wanted to stay away from this kind of thing for a very good reason: people on welfare lose their human independence and sense of dignity, they become subject to the dictates and whims of their welfare supervisor, who can tell them if they can to live here. or if they can get a phone, what they can do with their lives, they are treated like children, not responsible adults, and they are trapped in the

system

, maybe a job comes up that seems better than welfare, but they are afraid to do it. take it because if they lose it after a few months and maybe six months or nine months before they can get back on welfare and as a result this becomes a self-perpetuating cycle instead of just a temporary situation, the Things have gone even further elsewhere.

This is a human state, a public housing project in Manchester, England, well here we are 3000 miles from the Bronx, but you would never know it just by looking around, it seems like we are in the same place, it's the same kind of flats, the same kind of massive housing units, shit, even though they were only built seven or eight years ago, vandalism, graffiti, the same feeling about the place of people not having much drive and energy because someone else takes care of them . their daily needs because the State has deprived them of an incentive to find work, become responsible people and be the true breadwinners for themselves and their families for the last seven years.

Maureen Ramsay has had to buy food and clothes for her family. on a handout from the government all that time her husband Steve hasn't had a job every week he collects what is known in Britain as Social Security the government takes care of him his wife and children but accepting welfare payments means accepting the rules of those who give my opinion anyway you feel like they belong to you you know there's no other way to say it they say I got a job tomorrow because I needed something good, I know I have to go there and report it because I couldn't Don't go into work because you would be Looking over your shoulder thinking all this says safety is coming I want to finish, there's still no hope, you can't fight them, jobs are lonely these days, they just hit you. he caught about 45 pounds a week he didn't eat it to be below that you still end up with Tata 9 pounds okay what is he working on when he used to get the same?

You know what I mean, I don't see any point. Of course you are absolutely right, but it may not be worth it to get a job now, that is not your fault and I do not blame you, you are acting sensibly and intelligently in your own interests in the interests of your family, it is a failure of the

system

. which takes away his incentive to get a job, but suppose you were cruel and just took him off welfare overnight, cut it off, what would happen, he would find a job, what kind of job I don't know, maybe not .

If it is a very nice job, it may not be very attractive, but with some salary and some level of remuneration there will always be a job that you could get yourself, it could also be that you would be forced to depend on some private charity that Maybe have to get help at a soup kitchen to pay the equivalent again. I'm not saying he's desirable or nice or good, he's not, but in fact, as to what would happen, there's no doubt that he would find some way. to make a living the American government is trying to break the welfare trap these people were unemployed now they are being trained at taxpayer expense may or may not lead to a real job here we have a vast national welfare system that is diametrically opposed to everything that the United States believes because the United States was founded on a work ethic, it has practice to work with ethics and it has said that this is what we want everyone to have the opportunity to have a job and in the United States everyone here has to sign and do a full day's work.

It is an attempt to make it look like a real job, we say a job as part of the American lifestyle and we will help you find a job so you can get a piece of the pie and you can pay taxes. You can become part of that American dream, but the dream doesn't work. Schemes like this run under the government's Comprehensive Education and Training Act have a high dropout rate and many trainees end up in the same place where they started on welfare, the men and women who run Sita and similar programs the government officials Department of Health Education and Welfare our dedicated people their motives are good their achievements are not the results of these programs have been disappointing why I believe the basic reason is because it is very difficult to achieve good objectives through poor means and The means we have been using are bad in two very different ways.

First, all of these programs involve some people spending other people's money. Our goals, which are determined by a third group of people, no one spends other people's money. money as carefully as they spend their own, no one has the same dedication to achieving someone else's goals that they show when they pursue their own beyond this, the programs have an insidious effect on the moral fiber of both the people who run the programs and the people who administer them. supposedly benefit from it for the people who administer it instills a feeling of almost divine power for the people who supposedly benefit instills in them a feeling of childlike dependence their ability to make personal decisions is atrophied the result is that the program involves evil use of money do not achieve the objectives they were intended to achieve but, much more important than this, they tend to rot the fabric that holds a decent society together if you think that is overstating the case, look what hgw found when it did a special investigation into the spending of the vast funds it manages.

We have just received the Public Health Service's plan on reduced bed requirements. On these reels of tape recording every payment made to every recipient, they found evidence that a staggering seven and a half billion dollars had been lost to fraud, waste and abuse in one year. Doctors. Contractors. Hospitals. We all want to get our hands on it, you can be sure that we can all find very good reasons why we should be the ones spending someone else's money. Someone or someone else made a good case for spending taxpayer money to subsidize. The rents in New York City, including the rents for these apartments, the people who occupy these apartments pay about 200 dollars a month less than the market rent and that subsidy comes from the taxes of the people, most of them who are much poorer than the people who live here.

It's not unusual for this kind of thing to happen when the government tries to do good with our money. Look what happened in Chicago. For most visitors, the immediate impression is of a rich, prosperous and bustling city, but like every major American city, it has its problem areas. Overcrowded slums that generated poverty and crime afterthe Second World War. One such area was developed in Hyde Park in the 1950s. Plans were drawn up to tear down large areas of slum construction and rebuild using government funds under an urban renewal programme. It was going to be a show project. replacing a blighted area with an integrated community that controlled the spending of that government money, in fact it was my own University of Chicago that felt its existence threatened by the spread of urban blight and crime.

Government money was used to tear down an area that contained many small shops as well as low income families, once the area was cleared private money rebuilt with middle class apartments, townhouses and shopping complexes the blight had subsided. eliminated here, but only to move to other places in many cases when the government administers large grants while those funds do not end up directly serving the people and achieving the objectives that were the intention of the programs because the grant has a source of information that the large government bureaucracy Joe Gardner helped establish an organization of local black people to protect their own interiors. previously blacks had rioted in the streets to try to get their way now it had to be done peacefully using government money when government funds became available the Woodlawn organization gained control they used them to build the type of houses they wanted low rise apartments like these, the bureaucratic planners and architects told them that it was unequal that only the high-rise blocks worked, they were wrong, many people have this opinion that the disadvantaged, if they have no idea what their problems are that they do not solve the heart, that outside professionals are needed to do that and we say that's nonsense because the outside professional doesn't feel in his gut what a woman who receives welfare with six children and lives on a hundred dollars a month knows. deteriorated construction fields she can find much better solutions than a bureaucrat the intentions of this local community group are good they want to rebuild the community like the community wants the government money always corrupts look at the number of people rebuilding this garage no It doesn't make sense, except these are sitting workers paid with taxpayer money.

Government funds have allowed the organization to take over an entire area of ​​Chicago. Now they have their own supermarket. They built splendid houses for middle-class occupants, very expensive, protected by the latest technology. security systems all at the expense of taxpayers in a sense, it is quickly becoming a mini government at this particular point we have approximately 400 employees we have an operating budget of over five million dollars a year so we are large and We expand. Their next project is to redevelop this site and that is just the first step in a 20-year plan that will generate $220 million, most of it coming from South Bronx taxpayers.

They are very familiar with government protections, such as rent controls that did it. It is economical for owners to maintain their buildings. They have moved out and the vandals have moved out. The South Bronx is an area where many people receive welfare and where the crime rate is high, but all of this could change. They began to renovate these buildings to build new houses. They call themselves Sweat Equity because at first all they could put into the project was sweat and effort. Only later did they accept a small government grant. How long ago did you start working on this building?

Four months ago. in this building right here and I'm telling you what you're going to do is gut everything from the beginning and totally gut it and you're going to have to rewire the ceilings worked in a winter working in the summer how many people are you going to work? You know a good 40 people, how do you keep them working? Well, you know, 10 11, most want to get tired, wait, etc., how do you like it? Interesting, we show you what could be done in the future. What will be done in the future. and take it, take it well at first it's a little difficult to show someone that in the next 3 or 4 years what will come out of this they can't see, the long term turnaround that we will see in short, they need money, right?

Now, in those 200 years, sure, we try to show them that it will happen, it's true, they take some money from the government now, but so far they have managed to retain their original philosophy, but the best way to do something well is to do it. You're okay, like what we're doing, we're getting people off the streets, giving us something to look forward to. They had their own apartment. They would take care of the area around. They have a garden. they even get off welfare, you even give them a job so they can leave the world's fair and have some self-pride, that's all in itself, the crime, because as long as you collect money from the government and stay quiet, you won't have any worries. when that break we are working, we are making that money come in, we are putting it in our building, we were also building ourselves in the building, some of these people are Sita workers paid by taxpayers, but this is not as useful as seems.

It might seem like you're asking these guys who would rather have the workers' seat or the money paid to the workers' seat who would rather have the paper money, but that's your help, it's very expensive in terms of what these people they could use. With the money that you give these people, the amount of money that you are paying them, that means that the workers are now betting that they will have double, three times as much work, am I wrong? Oh, that's a very inefficient way to use your money, the problem is you have a bureaucracy and the government bureaucrats want to decide what to do, they don't want to let you decide what exactly to ask you, how was this place built in the first place, after all, This was a pretty respectable situation. solid and substantial region when it was first developed it was not done through a government project, it was done by individuals individually who had an incentive to build these buildings and occupy them.

What these people that we've been seeing here are doing is they're trying. To restore that feeling and that attitude, we will have a much healthier community here if it arises from the self-help of people like the people we have been talking to and if it is a paternalistic enterprise undertaken by government officials and bureaucrats who have planned on a large scale. for other people we must find a way to give everyone who falls into the welfare trap the kind of initiative that these people have the best or should I say the least bad solution that I have been able to come up with is something called a negative income tax this it's the idea that we should get rid of a lot of the welfare bureaucracy of the degrading rules that we should help people who are poor fundamentally by giving them the money what is the positive income tax that you are entitled to a certain number of exemptions and personal deductions and above that amount you pay taxes, but let's say you have no income under a negative income tax, the government will pay you a fraction of your unused exemptions, guaranteeing you at least a minimum income if you earn something you still You would receive a fraction of your unused exemptions and end up better off as your income increased, the supplement to your income would become smaller and smaller until your income equaled your exemptions, at which point you would break even without paying any taxes or taxes. receiving a subsidy is not an ideal system, it is not the system we would have liked to enter, but it is a system that would have the effect of eliminating the separation of society between those who receive and those who pray, a separation that tends to destroy everything the social system. knitting would mean that that week each of us could take advantage of the opportunities presented to us without fearing that if by some chance we lost our jobs it would be a long time before we could receive assistance again;

It would be a system that would give us all an incentive to gradually improve our lives and perhaps allow us, over time, to get out of the kind of mess we've gotten ourselves into, a mess we've gotten ourselves into for the best of reasons, but with a The worst of results we have become increasingly dependent on the government. We have handed over power to the government. Nobody has taken it from us. We are the ones who generate the results. high inflation, a welfare system under which neither those receiving aid nor those paying for it are satisfied, trying to do good with other people's money simply hasn't worked.

The discussion is already underway here at the University of Chicago, so let's join in while you watch. Watching the film I had a growing sense of anger because that position did not recognize that the system that was being attacked was necessary in our

free

enterprise capitalist system which by its very failure produces poverty and therefore requires government intervention in the interest of those people. . trapped in the traps of poverty, so as I sat and watched the movie and listened to dr. Friedman's statement excited me to the point of anger because only half the story is being told: we really are victims again, this time of one system, the social welfare system, for the failure of other systems to operate in the interests of people, let's get others.

The reactions that came from that statement trying to do good with other people's money simply hasn't worked the welfare system is rotting the very fabric of society Tom Salt my reaction was the complete opposite because my anger was about what was had created in a city where I grew up in very different conditions during the period of capitalist failure, during the period in which there was no humanitarianism and where it was possible for people to live better and get out of that poverty, now I believe that someone who lives in the same place where it would be much more difficult for me to escape that poverty because of all these things, the buildings were not abandoned like the building we saw in that movie when I lived in Harlem, the crime rate, there are all the things that attributed to failures and The previous method did not exist.

I slept on fire escapes in Harlem. I would challenge anyone to do that. Nowadays, anywhere in New York City, we in the United States have traditionally tried to avoid some of the welfare trap that you talked about. denying eligibility to healthy and non-elderly people, etc., and therefore we have tried to close the door of social assistance to a good number of categories within the poor population, the second point that was highlighted and I think should be made in some perspective is that some, but not all, what we might call welfare programs broadly have this strong tape behind benefits as you earn a little more money and I guess that's what I'd like to point out as the main problem identified in the film, but It is not something common to each and every social welfare program that one could think of when the family fails, when the private sector fails to create jobs at a fast enough rate, it is discovered that people are unemployed and end up needing help to exist and the social welfare system. was created in the 1930s to do exactly that, when the private sector essentially failed, we have the development of a welfare system, it is not corrupting society, it is taking what the institutions of society have left behind, the family, disintegrating the economy, not expanding the health system fast enough.

If the education system fails and does its job, we have untrained and unskilled people seeking employment in a highly technical society or jobs with wages so low that people cannot actually live at a decent level of humanity. I see that the welfare system does not corrupt but in fact takes the remains and trying to help people live with dignity so that the fabric of society rots is not supported except perhaps by you, could you support that phrase absolutely? You're saying you're talking about the failures of other parts of society, what the welfare system and other types of government programs do is pay people to fail, to the extent that they fail, they get the money and , to the extent that they are successful, even to a moderate extent, their money is taken away, this even extends to school systems where they will give money to schools with low scores to the extent that the school improves their education the money is taken away. money so that people who fail in their own lives are being subsidized have become more dependent on handouts that today we have built-in expectations about the quality of life quality of work the level of income that one expects in return why because we look at the level around us that is necessary to have that is not why I can have all kinds of expectations the question is what can I do if someone else is subsidizing my expectations my expectationswill be hiring or to the extent that the Center for Advanced Studies was subsidizing my expectations a few years ago I refused to work at UCLA for the normal full professor salary why should I when I receive the same money for being at the Center for Advanced Studies without hours, without homework and without classes, let's look at another proposal in the case of Milton, the insidious effect on those who receive social assistance, lose their independence and human dignity, are treated like children, etc., now Dr.

Thompson as former administrator. of an important program is that a big risk that is not a big risk in fact assumes that people on welfare stay on welfare and therefore have the result that dr. The thing about Friedman's statement is that in our AFDC programs around the country in particular, the same thing happened in New York, there is a turnover of graduates on the AFDC welfare rolls, about a third of them disappear each year now if these people so destroyed by the system when they leave they wouldn't look for a job they wouldn't keep a job they wouldn't stay off the rolls for six months 18 months 24 months as long as they can stay off so something is wrong With that argument, when you look at the people and what they do, the people you know who are poor are no different from those of us who are not poor and their motivation for self-dependence, self-support, and mobility up the economic ladder is no different from those around the world. reasons we have for not letting the system remember dr.

Friedman, the social rights organizations that refused to let the system sculpt them while trying to change the policies around them and I completely agree, but the people who are poor in our welfare roles are no different from the rest of course . They are not human beings and they deserve all the sympathy and all the possibilities to make their own path but the welfare system makes it different you give them a way out in their stupid internal account so that they get off the lists well no one figures it out or figures it out and You have to be careful with the figures, the fact that 1/3 has a turnover of 1/3 does not mean that there is not half a war all the time, people come, continue, continue, continue, I think they should have the other. things, 34% of the people in AFDC or for five years or more and when you think about the purpose of the AFDC program, which was the raising and maintenance of children, dependent children, minor children, I would tell you that five years is not It is a terribly long time for a mother and children to be dependent if there is no other source of income, we have a program in Pennsylvania for essentially all those who are not served by the AFDC program, it is called the General Assistance Program and they are less than fifteen%. for over 18 months, so we have a high turnover, essentially we have young men who enter the welfare system after unemployment compensation and then leave it when a job opportunity arises.

You know, I think the notion of generations of people on welfare is this. a very small minority in the entire system, that does not mean that the system as it is currently defined and as a set of programs that we have put together does not often contradict each other and I am the first to agree with dr. . Friedman that some of the programs are contradictory, however, I think it is too broad to say that we turn people into helpless children. I don't remember talking to anyone who was ever on welfare who didn't think they were being treated like children. while they were at it, you know Mun has to make a difference, a distinction between the system that was created to help people and the people who are employed in that system.

Look at any public welfare system across the country and we know of virtually few trained people. people to work with people we employ poorly trained people who are not equipped to help people they say they are social workers they are not social workers I have neither the skills nor the attitudes and some of them don't even care so I believe One You have to separate the conceptual framework of a system designed to help people and what the country and the community put into that system to implement those programs. I separate hopes from reality. I separate the skills that are available to implement what the objectives of the program are and if they have to be separated, if we are talking about the objectives of the program, are we talking about how it works?

I would be the first to say that it is a system that I administered that had people ill-prepared to do the job that they were created to do and I would not say that the system that we established focused on the social well-being of the people who think they were actually so paralyzed by the system that there was very little they could do to help people get out of welfare, that is, develop skills, get jobs where it was necessary to get off social assistance, they thought that the system that we are stereotyping existed, it is one of great paternalistic interference in the lives of individual families and, in fact, is it not so?

Thompson caseload is so high for an individual social worker that he cannot interfere much and furthermore, in the last decade there has been a real attempt to alleviate this welfare trap at AFDC by changing the return rate and managing work expenses and childcare expenses in such a way that the work is made easier for those who want to do it, so it is not as harsh an image as we sometimes have of there being an omniscient social worker who is there in the living room. with the family making all the decisions for them, I have never heard of a government program that was flawed and the people running it didn't say if we had more money to spend and what we couldn't accomplish with that amount. some of your recipes in that movie because it's a good topic of discussion, the most drastic one was when you said that, speaking of an unemployed man, assuming you were cruel and took welfare away from this man, he would find a job and some with a salary that will always be a job I could get, I might need some charity along the way, a private charity, but I would get a job.

I want them to react before we return to Milton. That is an image that seems plausible to them. We might get a job. He will get a job in what we call the underground economy and that is where many of our young people now go to get their jobs, those activities that are illegal and the only opportunity they have to earn part of their livelihood, I think. The other problem is that there is a whole group of people who are single women heads of households and yes, tomorrow their welfare will be cut off. What will they do?

What will be your immediate response and at what price? for their young children and for their middle-aged children. Kids, yes, you will get a job. In fact, statistics show that women are the most successful through the Employment Program, but what usually has to complement that is the provision of some type of childcare or the individual woman has to earn enough money . to be able to pay for their daycare privately or, in fact, is it subsidized through this insidious corruptive program run by the federal government that actually makes us employable as a taxpayer, it's an interesting notion to try to attract people. a productive mode, Tom, so it's amazing the way you start the story in the middle, as if there is a predestined amount of poverty, a predestined amount of unemployment, and the welfare system is in no way responsible for the 20% of the lower half. of the population, I have never been, it has always been like that, it is also true that the bottom 20% of the population has to live off the government and be governed by the Government Commission, for example, from households headed by women, many of Those extra adult women who have all the children are teen pregnancies, there is no predestined number of teen pregnancies.

I grew up in an era where people, and particularly black people, were much poorer than today, faced much more discrimination today, and where the teen pregnancy rate was much lower than Today I don't think there is a predestined amount of teenage pregnancies, a predestined amount of abandonment by husbands, others. Guttman has done a study of the black family showing that this whole notion that this is the black family has always been disintegrating, but that's nonsense. His studies date back to 1925, the vast majority of black families were intact two-parent families until 1925 and since Aro slavery, so now it is only in our time that we suddenly see this inevitable tragedy that the social welfare system says that It's going to make a sound that in itself is a point for a very small group that we're talking about. 12% of families are not intact.

They are not two-parent families in any of them. You know, I'm going to walk around sniffing. no general public we are talking about 12 percent of families 12 percent is true, it is a small number well-being we are still talking about a significant component of the bottom 20 percent who are the bottom 20 percent whether they are above the poverty line or below the poverty line are still the bottom 20% and the question is what is the responsibility of the other 80%, if your program plans to eliminate the bottom 20%, no, but you intend to increase the bottom 20%. we are raising them by having more by having more legitimacy more unemployment I am not making the flesh have illegitimate children you do not have to be subsidized we as human beings do not have a responsibility but I hope that we have compassion and interest in the bottom 20% and I just want to tell you that the capitalist system, the private enterprise system of the 19th century, did a much better job of expressing that sense of compassion than the government welfare programs that are today, the 19th century, the period in which people denigrate it as a high tide of capitalism if it had been a period of the greatest outpouring of benevolent and charitable activity that the world has ever known and one of the things that I hold very seriously against the social welfare system is that it has destroyed private charitable organizations that are very much more effective, much more compassionate, much more person-to-person treatment and helping people who really, through no fault of their own, find themselves in disadvantaged situations.

However, I disagree with you because I think the whole notion of private property was excluded in entire segments. Members of society were excluded from the notion of private property in the 19th century, namely idiotic and imbecile women, so I don't go back to the 19th century and consider it a model we would want to replicate today anyway. I want Milton now. to move on to your main prescription, I know you don't say it's on the agenda for tomorrow, but what's ahead is the negative income tax and I'm not sure people fully understand how that works, we can't, I think Let's get into the details, but first I'd like to get a reaction from the panel: is this a viable approach to the long-standing problems of poverty? negative income tax.

I think it's a viable approach to some of the poverty problems it involves first. of all cash payments instead of payments in kind, as I understand that these are payments on a non-categorical basis, but please know that it does not matter if you are a family joined by women or a family headed by a man or with a young or old, you're sick or healthy, if your income falls below a certain level, you may have a guaranteed income level for people based on family size and then you have a recovery rate that is modest. I guess by definition now the question is how many things do you want to use that program to replace?

How many things do you want to replace with such a negative income tax program? Would you replace everything with just us, Claire, that point? Would you virtually eliminate remaining forms of welfare if you had this program? Yes, I wouldn't, but I think its purpose is precisely to provide a transition between where we are now and where we would like to go because, although, but because I agree with you, given that we have corrupted people on welfare and we have achieved. There we do have the obligation not to throw them out on the street and put them in the difficult adjustment that you have made, we have it easy, okay, but I would like to replace them all, let's get reactions for this, we will return to good.

I saw some figures recently that said that if you take all the money spent on poverty in America and divide it by the entire poor family you can't come up with a figure of $32,000 per family now that the average poor family is apparently not getting the $32,000 and clearly someone between the Treasury and those families is getting a lot of that money and I think if they just cut out the middleman like they say in the commercials, there would be a ton of benefits for both the poor and the poor. For taxpayers, I support the concept of a negative income tax and its objective.

I would like to point out, however, thatAdministratively we have another established bureaucracy. Someone has to take profits into account. Someone has to decide when to return that. what they are entitled to there is a gap between the payment of their earnings and the refund there are a variety of problems that I am willing to accept, but I want you to know that government intervention will not eliminate the The problem I have is where the children come in , what your rights are under a negative income tax, and by bringing in a negative income tax, we are in effect subsidizing the illegitimate, I see that Tom Soul is so concerned about the main reason why it is not feasible today. having a negative income tax is because the current welfare bureaucracy would be out of a job, they are the main objectors, as approved by Senator Patton who is now a senator.

Pat Moynihan later showed in his book on the Nixon program that the main obstacle to getting a negative income tax enacted was a welfare bureaucracy, so I don't think these administrative problems, if enacted, would be serious at all. . I think the other assumption under the negative income tax, and I'm not sure I can accept it, is that everyone has a minimum level of understanding about how to spend money, in other words, how to use the market to satisfy wants, and I, like economist, you could say yes, we have everyone, from 4 to 100 years old, who knows how to use money to satisfy desires and that is what they don't do, they don't do it, there are all kinds of problems of people who don't go to be able to do it, but that is a minority problem, it is a problem for private activity in private charity, one thing is certain, they are spending they would be spending their own money and, no matter how informed you are about my money, it would be one less step bad right now the social worker is spending mr. some money to help mr. city ​​and there is a big takeoff in the middle, as Tom Sowell said the question is not whether the richest people with low incomes can spend their money effectively, the question is how effectively they spend it in the basement compared to what so effectively the bureaucrats spend it for them. compare anything to perfection or to some arbitrary standard acetyls and point out that the same is true in the area of ​​education.

They're saying families could select select schools with their children under a voucher system, for example. Well, the question is, could they do much? worse than what the corrupt bureaucrats are doing and yet in the public school system we go to education in another program I've had equivalent, you said about half the money doesn't go to the poor or something that shouldn't , should not lead the viewer to think that all that money goes to the program administrators; Much of what you're talking about goes to non-poor beneficiaries - for example, Social Security, as a program, pays out about half of its benefits to people who otherwise wouldn't. being poor unemployment insurance pays about two-thirds of its benefits to people who are not poor and in some definitions those are social assistance or anti-poverty programs and that's how statisticians arrive at this horrendous sounding discrepancy between the total amount of money spent and the total cash benefits that go to the poor.

I think it's a perfectly valid point, because supposedly we weren't setting up unemployment benefits and Social Security to keep the rich well off, this goes back to this big philosophical debate we may have. I think it's easy to oversimplify things and say that all of these programs, including public schools, are there to help the poor and only the poor, but let me mention that the negative income tax has some of its momentum in the sense that it would be a way to limit the payment of benefits to people who say yes, and would eliminate benefits. We are a large number of people who now have expectations that they are going to obtain them, not in the form of public assistance, but in the form of social security, as we use when an almond could be made for us that does not disappoint the expectations on which the people have built their lives for a generation, but not a continuation for eternity to avoid a generational transition what are the other obstacles to this being underway now you said I don't know how seriously the biggest and almost the only obstacle It's the welfare bureaucracy no, no, they are the immediate largest group of lobbyists who will lobby against you, yes, the largest.

The obstacle to overcoming it right now is that there is no way to build a sensible negative income tax system that doesn't hurt some people; There will be some people who will receive less money than they do now, especially those with higher incomes. groups particularly the rich who are now being subsidized by the rich and will make it politically difficult for people to implement that the intent is to implement a negative income tax that costs less money, is easier to administer and yet does not no one in society plays a dollar less than what they are receiving now;

There is no way to construct such a program, but although it is not politically viable now that the force of history is on its side, it will become political fodder, not to mention giving the impression that welfare administrators were against the negative income tax, the fat program, for example, as Moynihan says, because they would lose their jobs, for example, many of us opposed it because of certain features of that program, a $24 $2,400 level for a family. out of four, these were opposed to that and if you look at the Congressional Record, it will show that those who testified said yes, we are four conceptually, but we are against this piece and this piece, if it changes that, has our support.

In the same position I first proposed the negative income tax twenty-five years ago, but I testified against the final version of the Nixon plan because, because of welfare, bureaucrats had led them to make changes to it that made it a satisfactory decent income to negative good. imposed on one that would have been as bad as the one they have now would have been added on top of everything else, that is the political reality of it, it had changes in the political reality and that is what is important. I want to say one more thing about this whole issue that we've been talking about, and going back to Bob Lemons' comment, there's one thing that can be said in favor of the welfare program, something that I'm not used to saying in favor of it, and that is. which is the only social program.

I know that, at least on average, it gives money to people who are in lower income classes than those who pay taxes. Not only do all the other welfare programs go to a lot of money to the well-off, but on average the poor pay taxes and the rich get subsidies. We in the upper income classes have been very smart about it. time to trick the poor fools at the bottom into paying us good salaries as bureaucrats and providing us with good benefits at their expense and expense. at least a welfare program doesn't do that and what you said with great confidence is that the negative income tax will come even though you recognize the obstacles, why are you so sure it will come?

Because the current system has within it the seeds of its own destruction there is no way that a system built like prison in my opinion can avoid creating more and more social problems and something will have to be done no one has proposed any alternative as far as I know There is no effective alternative to the negative income tax and therefore it is struck down and it continues to rise, it is struck down, yes, but ultimately it raised the question of whether in any modern industrial democracy, this is a conceivable system that would be run without a fairly elaborate welfare foundation of some kind, but let it sit I I I don't think it can be because I think essentially the set of social assistance programs reflects the values ​​of this society that, if it didn't, there would have been revolts a lot before.

Now yes, there are rumors about its cost and I think that's primarily a function of rapid inflation rates eroding the real earning power of the middle class taxpayer, but I think on one level we wanted to abdicate the responsibility of caring the responsibility of real day-to-day care and in a technically modern industrial society like the one we have. The tax system and the government system are probably not a viable alternative. I don't think we'll get out of this. I don't think we'll see any private charities that can take my money. free to give or not to give and essentially make a difference in people's laws of any substance at any level.

I don't think that has anything to do with Massiah T being modern technological or industrial, it has to do with an ideology and particularly an ideology. that's very strong among academic intellectuals and in the media and I think that as time goes on and more and more intelligent ideas replace the kinds of vague divisions that dominate today, the political climate will change and that's the only thing that gets in the way. reform right now Jim, right? I don't think you're going to get rid of the system. I am interested in the welfare system. I'm interested in Tom's last statement about adaptations and theorists and such.

We forget that we are talking about people and we can sit in the ivory tower and talk about whether this system will work and, whether logically or ideologically, why it won't work, at the same time that there are masses of people outside or excluded from the system who You and I are part of it and somehow we have to make sure that those people are taken care of and the failure to do so, of course, means that your safety and mine and the vitality of this government and our country are in danger. The mayor of New York City asked me when we had a strike what I would do if he couldn't get checks to people when our workers were on strike and I told him after the first month of chaos what to do.

You mean I said no man or woman on the street in New York City includes a lord? mayor we will be safe if we can't take care of people or we leave this discussion and we hope you will join us for the next freedom to

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episode next week is equality the birthright of all Americans is it healthy for a nation when the government tries? impose equality on all its citizens, how does that affect the freedoms of individuals? Don't miss Milton Friedman's next look, free to

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