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Wednesday, October 28, 2009

An End to Welfare as We Know It?

I've been mulling something over in my mind lately, and I decided that I had enough of an outline in my head that I could share it with whoever might periodically read my blog. I constantly hear liberals who support Obama's health care plan, and others like it, say that conservatives have no ground to oppose the democrats' plans because we aren't coming up with a solution that will fix the problem. Now, first of all, this is not true; I have heard lots of conservative plans that would bring down the cost of health insurance. i.e. interstate insurance purchase and tax free health savings accounts. And second of all, I don't think that this is necessarily a problem because of the fact that according to polls, about 85% of Americans are happy with their health insurance. That doesn't exactly sound like an over-bearing problem to me. But I had a thought hit me recently after thinking about government controlled health care, and how some people are pushing for a welfare-like system to provide a means of assisted health care.

Now, to provide a premise for what I am about to suggest, let me say that in no way do I think that it is the government's responsibility to provide anything for anybody other than protection from the infringement of rights. But our federal government is already providing a plethora of social welfare programs for millions of Americans. This is a cancer to our liberty, and our tyrannometer should be blinking a big fat DANGER sign already from the amount of socialism that has been able to sneak into our country in the past several decades.

Problems that arise from poverty are real. Don't get me wrong. No one likes to see the guy on the street pushing a buggy with junk all in it, and not because we don't like the eyesore, but because most people genuinely are compassionate toward people who end up like that for whatever reason. But, in order for a free society to continue to be free, problems like this should be and must be handled by private philanthropy, because the ONLY way that government can give something to someone is to take it away from someone else.

With that thought in mind, let me say that the suggestion that I have could not only help solve that problem with providing insurance to those who can't afford it, but it could also possibly help purge our nation from all federal welfare programs. Keep in mind, though, that I am no expert on economic issues, so I don't know how to crunch the numbers to see what kind of impact this would have on federal revenue. I only know that the more we allow the government to provide for us, the less we are able to do for ourselves, and that means less liberty.

The plan is as follows:

First, the federal government creates tax incentives for the creation of privately owned welfare-like charity organizations. This will make it as easy as possible for private individuals and corporations to build entities that will provide things like assisted housing, food banks, transportations services, and yes assisted or free health care.

Second, the federal government gives incentives to individuals to donate money to any welfare-like charity organization(s) of his/her choice. For each $1 that is donated, $1.25 (or some other amount higher than $1) is deducted from that individual's federal income tax for that year. This would cause a few things to happen. First, most individuals would figure out exactly how much they would need to donate in order to erase any federal income tax that they would be required to pay for that given year, since they would spend less by doing this than they would from paying federal income taxes. Because of this, they would have more money at the end of the year to save or spend. Also, most people would rather know exactly what their money will be used for when they give it away, and since they could choose which charity/charities get their money, they would be in control of what cause it went to.

Third, as I said above, given the assumption that most people would donate just enough money to erase all owed federal income tax, they would end up with more money at the end of the year and would, in effect, see a tax cut. With more money in their bank accounts, they will be more likely to spend more through the year. To help generate some revenue, the federal government could implement a small (less than ten percent) national consumption tax on luxury items.

Since the burden of welfare programs would be lifted from the federal government, the required revenue from taxes would be greatly reduced, therefore the loss of income tax revenue would not hurt the federal government because they would only need enough revenue to pay for essential (Constitutionally endorsed) spending.

Fourth, over the course of a few years, gradually eliminate social programs within the federal government as privately owned welfare-like charities grow and can meet the need for such programs.

Fifth and finally, make it easier to buy health insurance from out-of-state suppliers to help increase competition and drive down cost for companies who offer insurance benefits and individuals who privately buy insurance.

Now, like I said, I am no expert on the economy, so for me to provide any details on the numbers I spoke of would be ill-advised. But I think the premise is sound.

I welcome any comments on this, both positive and negative. Give me a full critique, and let me know what could be changed for the better.


  1. Great suggestions! If only politicians were looking for common sense solutions.

  2. You know, I would like to spend some time looking at the numbers to this, but it sounds like a very workable solution.

  3. Yeah. I would like for someone who knew the economic world's ins and outs to crunch the numbers to see how viable it is. I'm sure the numbers I proposed would have to be tweaked some, but I think it could work.