Thirty years ago, welfare reform was a hot topic here, as there. In the United States, major changes seemed to work, and Bill Clinton even declared in his January 1996 State of the Union that “the era of big government is over.” But nobody told big government. And in Canada, drastic fiscal measures by Jean Chretien and Paul Martin to avoid “hitting the wall” necessarily involved cutting social spending because, as anyone who seriously examined the books quickly realized, it’s where the money was going.
Some Americans tried to blame high defence spending for big deficits and a growing national debt. But it wasn’t very convincing, partly because if the U.S. were to neglect its security like all its allies, the West would soon founder amid surging tyranny and chaos, but mostly because the Department of Defence simply didn’t account for that big a share of federal spending.
Clearly, the big problem is social programs. So we threw up our hands and went for broke, and we’re nearly there. Ralph Klein once said you have to go hunting where the ducks are, but when he left office, Alberta provincial spending was way higher than when he came in. So one might say of welfare reform what G.K. Chesterton once said of Christianity: “The Christian ideal has not been tried and found wanting. It has been found difficult; and left untried.”
It wasn’t supposed to be this way. As late as January 1935, even Franklin Roosevelt, key architect of the big-government New Deal response to the Great Depression, warned: “The lessons of history, confirmed by the evidence immediately before me, show conclusively that continued dependence upon relief induces a spiritual and moral disintegration fundamentally destructive to the national fiber. To dole out relief in this way is to administer a narcotic, a subtle destroyer of the human spirit.”
It was a lofty vision. But it didn’t work. In Canada as elsewhere, poverty and spending surged instead of plunging. Worse, dependency spawned an intergenerational underclass in hideous slums. And every time people tried to address welfare, which for a while they really did, they ran into the same paradox.
They went in thinking poverty persisted because money wasn’t reaching the target clientele. But they quickly found that it was, and making things worse by rewarding precisely the behaviour we wanted to prevent.
Most people have always tried hard to avoid poverty because it hurts. But if you make it less painful, while avoiding it is just as onerous, from rising early to obeying a boss to holding a marriage together to saving for old age, people are less likely to put in enough effort.
Thus the negative income tax, initially hailed even by Milton Friedman as the acme of efficient relief of want, proved so catastrophic in small-scale trials that it was abandoned by almost everyone. It’s the ideal way to buy improvidence, and if you build it, they will come.
Statespersons would tackle such a problem, urged on by virtuous citizens. Instead, we just gave up. You can’t talk like FDR today, nor apparently can you think that way. Canada’s national debt passes a trillion dollars, interest payments start to crowd out everything else, and we just shrug. What can you do? Gotta have handouts.
So I worry that it’s happening. But I worry far more that we’re not even discussing it.
