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The lesson here is that if you pay people not to work, you get less work. In fact, this is a universal problem. Record-breaking increases in recent years in food stamps, disability benefits, and various forms of welfare have reduced incentives to work and earn. But it’s clear over the first half of the year that lower unemployment subsidies have generated higher employment, which helps explain why employment growth accelerated and the unemployment rate fell another half-percentage point when overall GDP growth slowed to nearly a 1 percent pace.

Rep. Paul Ryan has the right idea to solve the wrong-way incentives generated by big government. He would block-grant all the transfer assistance programs and send them back to the states. Importantly, Ryan wants to restore lower eligibility requirements and reduce benefit assistance time limits. Plus, he would expand the earned-income tax credit to ease the transition from welfare to work without prohibitive increases in marginal tax rates.


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Policymakers should listen to Ryan. And they should carefully observe what’s been happening with lower government employment assistance and higher job growth.

As Kashkari pointed out, many in our country just want to work. They just need a job, which is the greatest form of welfare. But for a change, let’s get policies that actually increase the incentives to work and earn. The whole country will benefit.

Robert Sinche is a longtime right-thinking Wall Street economist. 
COPYRIGHT 2014 CREATORS.COM

Photo credit: Christopher Halloran / Shutterstock.com

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The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.


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