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Paying for Marriage, A Welfare Idea

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Paying for Marriage, A Welfare Idea (Originally Published 9/25/2009)

The phrase, “You get what you pay for,” is usually used to justify a seemingly high price of a good or service implying that if the purchaser wants better quality, there will be a higher price associated with it. Or it may be used deprecatingly to someone who just purchased some product at a bargain price and found it defective. Someone will say, “Well, you just get what you pay for.” I always like to add, “…if you are lucky.”

A less common use of the phrase would be to say that if people, or government, are willing to pay for particular goods and services, someone will step up to provide those goods and services. So, if people are willing to pay for MP3 players, someone will produce them in huge quantities. If people are willing to pay $100 for a pair of athletic shoes, companies will be formed to provide such shoes in large quantities. If people are willing to pay two or three dollars for an “heirloom” tomato, the tomatoes will be provided. If people can get sub-prime mortgages to buy homes they cannot afford, someone will step up to build such homes in large quantities. Free enterprise: It’s a crazy system, but it works. Emerson was on to something when he said, “Build a better mousetrap and the world will beat a path to your door.”

How about the way our government influences the economy by paying for certain things? Our tax laws are set up to allow charitable deductions, and, as a result, people give more away to qualified organizations. Also allowed are deductions for home mortgage interest so people invest more in homes thereby driving up prices. Deferral of taxes on income saved for retirement has resulted in billions invested in 401k’s and other retirement savings plans. Companies are given tax incentives for funding R&D, and more R&D is therefore funded.

One of the things our government pays for is single motherhood. We should not be surprised that one of the results is more single motherhood. Of course the expressed intent of such government largesse is not to get more single mothers and more children with absent fathers but rather to help those caught in such circumstances. Google “assistance for single mothers” and see how many government funded programs pop up.

In the volunteer work I do, it is not unusual to talk to single moms with two to four children who live rent free in HUD housing and get $300 to $500 a month in SNAP payments (food stamps) and maybe a little child support from the fathers. Such persons come to our agency for assistance with food or clothing or utility bills. The bad news for these folks is that if they go to work, their rent will be increased and their food stamps reduced and they will have to make arrangements for someone to take care of the kids. That is a strong disincentive to work.

Here’s a radical idea. My personal preference is that we get rid of often misguided government manipulation of behavior via the tax code and go to a flat tax, but given that has exactly zero chance of happening, how about some incentive for lower income folks just starting out to get a job and get married? Without eliminating anything currently available, the $1000 a month or so that single moms can get for housing and food stamps could be made available alternatively to match, dollar for dollar, the first $1000 of earned income each month for married couples with children. That would allow a young couple with a child to marry and get a minimum wage job for one of them, earning around $1000 a month, and then get another $1000 in matching payments. Such a family can do OK on $2000 a month. Hopefully they will learn some job skills and get raises and promotions. The matching payment can be designed to phase out and merge in smoothly with the already established earned income credit which provides assistance to those with incomes up to $40,000 a year or so. Such a change could help young folks get started on a path to financial independence instead of locking them into dependence on government. It could help reverse the trend of increasing numbers of low income single parent households.

Single parenthood may be fine for people with money, but otherwise, it is tough. I know somebody will testify that they know somebody who was raised “in the projects by a single mom” and today he or she is a doctor or senator or Supreme Court justice or president. Such stories are wonderful and inspiring, but they do nothing to help the vast majority of persons trapped in the same situation today. For every such exception, there are a thousand who will perpetuate the cycle. Chances of success are somewhere south of the chances of converting high school football stardom into NFL riches.

The system currently in place is another case in which government, while well intentioned, is acting stupidly. For a sampling of government programs that subsidize single motherhood, check out the links below. (It is ironic that most of the single moms I talk to do not have Internet access.) Our government should not be a charitable organization. The tax deduction for contributions to charitable organizations is enough!

Oh, by the way. The minimum wage might have to be reduced for this to work. A lot of folks are locked out of employment because our education system has not prepared them to make contributions worth $7.25 per hour and profitability of many businesses is such that they cannot afford to pay $7.25 per hour to hire additional employees. (Yes, I do talk to single dads raising children occasionally, but maybe one or two for every hundred single moms.) (An interestingly slanted history of Head Start, the Johnson era program which was part of the War on Poverty and was supposed to solve all these problems we have today. It seems to me that it has become part of the problem because no-strings-attached assistance programs destroy self-respect and self-confidence and increase the sense of entitlement which has become pervasive.)