Good example of unintended consequences

On his blog, International Liberty, Dan Mitchell wrote that he hopes Paul Krugman…

…is right in that [Paul] Ryan wants “to make life harder for the poor” if the alternative is to have their lives stripped of meaning by government dependency.  And I agree that it will be “for their own good” if they’re motivated to join the workforce.

…even though Mitchell is aware that Krugman “wants readers to draw the opposite conclusion,” that it’s wrong for Ryan to want this.

I can hear my liberal friends now. Compassionate folks should want to help the poor, right? Ryan and right-wingers aren’t compassionate. They don’t want to help the poor. 

Mitchell also linked to a previous post of his from 2010, which contains this chart:

I remember reading this compelling point about unintended consequences in Thomas Sowell’s books and columns. The poverty rate had been declining prior to government involvement to try to help it. The country was becoming wealthier and more people were being lifted out of poverty.

Then government ‘declares war’ on poverty, since the intention of helping the poor is noble and a good way to attract votes. Who wants to vote against the poor, after all?

But what about the outcome? The declining trend of the poverty rate stopped right after the war declaration and then stabilized thereafter and began exactly what I don’t like about government programs — the positive reinforcing failure feedback loop.

We’ve spent increasing sums of money, through government, to combat poverty. It’s still here. As Daniel Hannan wrote in his book, The New Road to Serfdom:

It is a stock phrase of virtually every European politician, regardless of party, that “a society is judged by how it treats the worst off.”  Plainly, then, there must be something selfish — and possibly racist — about a people who keep voting for a system that treats the most needy so pitilessly.

It rarely occurs to critics that there might be better ways to measure the efficacy of welfare state than by size of its budget.  Indeed, in a truly successful social security system, budgets ought to fall over time as former recipients are lifted into better and more productive lives.

 

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