I guess my view is that I can accept the government setting some very general rules and helping people who meet the criteria in a way which does not distort the market.
There are two very different things here. One is that I would limit government help to the bare minimum because I do not believe it is healthy for people to learn to rely on government help. People who have houses by the beach on the Atlantic coast should have hurricane insurance. If they cannot afford it, it means they cannot afford a house there. The feds should not be asked to bail these people out every hurricane. I do not care how rich or poor they are. That should not be a criteria. You should have private insurance if you want to be covered. If you cannot get insurance that is telling you right there you should go live somewhere else. The same for flood insurance in other parts of the country. The Mississipi is going to flood now and then. get insurance and don’t make the rest of the country pay. Insurance is part of the cost of living ther and doing business there. So, point one is that i would limit government help to the most extreme cases of hardship and let people make their own provisions for a rainy day.
A different issue is, when the government does give help, how should it do it? I believe it should not help you with specific needs like housing or food or whatever, but rather let you decide your needs.
If the government says “i’ll give you food stamps” so you can only buy food, that is distorting the market. Food is a commodity which can be bought and sold. here in DC you see all the time people buying food with food stamps and selling it at a discount. Those people have decided they don’t need food, they need money.
My neighbor is an 85 year old woman and she lives on government help. Her utilities are paid for so in the winter her house is a sauna even though she is short of money for other things and continually asks to borrow from me. If she could sell the heat she would, but since she can’t she merely wastes it and gives it no value.
If she was given an allowance of money to spend, she could use it much better. By telling her how she has to spend the money, you are just creating waste and making energy more expensive for other people.
I am not doing a very good job of explaining myself but the main point I am trying to make is that it is not good for the government to get involved in the particulars. If the government makes general rules which affect everyone equally, then that is OK, but if the government tries to obtain certain results, that distorts the market and is prejudicial.
Subsidizing the people in a particular neighborhood is a bad idea because it just distorts the economy there. If people can count on a subsidy there, then they will count on it, they will take a job which pays less than it should, the employer is paying less than he should, his product or service is, in effect, being subsidized. This subsidy attracts more tenants and more businesses when you would want the contrary, for them to move to other places.
Many businesses have moved from California to Arizona where costs are cheaper. That is what market forces do.
But if you take the kind hearted approach of immediately helping people who seem to need it, you are creating a much bigger problem in the longer run. Europe is a good example of good intentions gone bad. There the policy is to protect the workers and subsidize companies which lose money so they can stay in business. That is what they have done for decades. The problem is that it is a well intentioned short term patch with huge negative long term consequences. They have had to move away from this because they just could not affor it. Unemployment is high and the incentive to be productive just isn’t there if you know the government will bail you out.
Just a few days ago I saw a segment in the news here about farmers planting crops they knew would fail with the sole intention of collecting insurance. The scam was huge, millions of dollars. the original intention was good but the results were not. The insurance companies would not sell this insurance because it was obviously too risky so the feds would undersign them. Now both the farmer and the insurance company have an interest in insuring the crop they know will fail because they both make money off it.
So, it is not that I don’t care for the poor farmers, but the solution just creates more problems than it solves. I say if they cannot afford the insurance they should not be in that business. That is true of any business. If the only way to afford the cost of doing business is a government subsidy, you should get out of the business.
I know I am not too good at explaining it… but it’s the best I can do.