Thursday, April 30, 2009

Poor People Are Good For The Economy

I had a conversation on a Southwest flight a couple of months ago with a liberal fellow who was an environmental consultant for mass transit (as I remember). He had a few interesting points. One was that he spoke well of Jimmy Carter (specifically about solar panels being put on the White House - which Ronald Reagan removed). I had never heard positive words about Carter before.

His other point was about food stamps. He said the math works out to about $4 a day for food. His complaint was that you can't live off that. If I were quicker with words, I would have said, "Good." I don't want foods stamps or welfare to be too comfortable. Otherwise, people will be satisfied with government largesse.

Poverty and hunger can be a strong motivator. Handouts breed laziness. In fact, handouts likely decrease prosperity for those who receive them. In my international economics textbook, I read that the same phenomenon occurs with government aid. International aid has nothing to do with improving economic growth.

Besides, in the United States people are generous and eager to help those around them. Private initiatives to relieve suffering are more important anyway. And private help, unlike government help, is designed to be temporary; when people no longer need help, they will be able to stand on their own two feet.

My grandpa was a branch president for The Church of Jesus Christ of Latter-day Saints in Dumas, Texas about 45 years ago. He was working with a family facing some economic hard times and was using Church resources to provide work for them so they could earn money. Another member of the branch was employed by the government welfare program, and had the needy family placed on welfare. His reasoning was that if he didn't have enough people on welfare, he would lose funding. Once the family was on welfare, the were not interested in working.

With too much easy money, a generation is raised to believe that they are owed something by society. Nothing could be more dangerous to long-term economic growth than an increasing population not producing anything, but who demands a great deal. So poor people are good for the economy, if, and only if, they are given the motivation to rise from their poverty. In this country, there is plenty of opportunity, so if someone doesn't grab it, it is because they don't try.

No comments: