It's hard to help without hurtingReader comment on: Krugman and Obama on Infant Nutrition Submitted by Shannon Love (United States), Feb 18, 2011 14:19 Reflexive supporters of the welfare state never stop to think that it is very hard to help people on a large scale without producing market distortions that end up hurting the people the welfare state is supposed to help. Subsidizing anything, such as infant formula, housing, education etc always raises the prices of the subsidized thing owing to the simple law of supply and demand and reduced price sensitivity by subsidized consumers (people who don't pay the entire cost of a product have no reason to consume less of the product when the price rises.) Moreover, many subsidies, while notionally of benefit for the poor, actually put money in the pockets of business and the well off. The Earned Income Tax Credit has the effect of subsidizing low income wages thus allowing employers to pay less. Housing subsidies end up in the pockets of developers and landlords while raising housing cost for everyone especially those lower middle-class who are just above the poverty line. If supporters of the welfare state actually cared about the welfare of the poor, especially in terms of raising them up to live independent and upwardly mobile lives, they would at least acknowledge these negative tradeoffs of welfare programs. That they don't tells us a lot about their real motives. Note: Comments are moderated by the editor and are subject to editing. Submit a comment on this article Other reader comments on this item
Comment on this item |
Follow Us On:
ADVERTISEMENT |
