https://www.manhattancontrarian.com/blog/2021-9-24-the-safety-net-the-goal-should-be-to-minimize-the-number-of-people-depending-on-it
This post is about a situation where the correct public policy approach should be obvious to everyone, but the perverse incentives of government as usual push in exactly the wrong direction.
The issue is how many people should receive benefits, and in what amounts, from government “safety net” programs. From all I can find, there appears to be near-universal support for at least some level of government “safety net” for the poor. After all, no one wants to see fellow citizens starving for lack of food, or dying for lack of medical attention to a curable health condition, and so forth. And can we really count on private charity to fully provide for all the situations of genuine need among the population? Thus the result: Although the details vary greatly, every country with an advanced economy has an extensive system of “need”-based distributions of benefits to those designated as needy. But how many and which people should receive benefits, and how much?
In practice, the number of beneficiaries and level of generosity of a social safety net are inherently unstable. As soon as such a safety net comes into existence, there must inevitably be a line drawn between those who qualify for the benefits and distributions and those who do not. There will always be some elements of arbitrariness in the line-drawing; and the difference in “neediness” between the least-needy person who qualifies for benefits and the most-needy person who does not qualify may be so small as to be imperceptible. So shouldn’t the benefits then be expanded to include the next guy up the ladder? And how about the next guy after that?
An even worse problem than the fineness of the necessary distinctions is the arbitrariness. No matter how carefully eligibility criteria may be crafted, I submit that there will inevitably be many less needy people who qualify for and receive government safety-net benefits, while objectively more needy people fail to qualify. As one obvious example, some people with no income or significant assets at all may nonetheless be able to draw on substantial family resources (from parents, siblings, children, or more distant relatives) in times of need, while others may have just enough income or assets to fail to qualify but no family back-up of any kind. I personally know multiple twenty-somethings with well-off parents who nevertheless qualify for and use the Medicaid and food stamp programs. You probably do too. Hey, nobody said that parental income is part of the eligibility criteria!