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Why Not Abolish the Welfare State?

Introduction: The Welfare-Poverty Debate1

In his 1992 election campaign, Bill Clinton promised to abolish welfare as we know it. Subsequently the Clinton administration proposed a two-year-and-out workfare program. That proposal followed in the footsteps of the 1988 Federal Family Support Act, which mandated that all states enact work-for-welfare programs. Massachusetts Governor William Weld is one of several governors who has proposed even more radical change at the state level. 2 And although the 103rd Congress failed to act on President Clinton's proposal, everyone expects that welfare reform will be a high priority when Congress convenes next year.

"A national debate on welfare reform has begun" As a result, a national debate has begun. On one side are those who argue that welfare is beneficial and benign, helping people who are in poverty because of external circumstances over which they have no control. On the other are those who argue that welfare is encouraging millions to choose poverty because our generous welfare system makes it more attractive than work.

This study argues that there is some truth on both sides of the debate. Welfare does indeed help people who fall into poverty through no fault of their own. At the same time, there is overwhelming evidence that the welfare system encourages dependency, the breakup of families and the emergence of single-parent households.

An ideal welfare system is one that helps people in genuine need, without at the same time encouraging antisocial behavior. We argue that the ideal cannot possibly be achieved through reform and modification of federal welfare programs. Nor can it be achieved by turning the administration of such programs over to state and local governments.

The ideal welfare system requires hands-on management -- determination of the amount and type of aid case by case, based on each recipient's circumstances. Only the private sector can run and administer such a system. In short, the solution to the U.S. welfare-poverty crisis is to privatize the welfare state.

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 ttle in the past 20 years, even though the welfare state has mushroomed. We're paying people to be poor, but mainly not in cash.