When Considering Welfare Reform, Consider a Different Model

The federal welfare apparatus has bloomed into disastrous menagerie of nearly one hundred programs. Many in Congress are seeking a solution to the welfare leviathan’s imminent collapse.

Currently, Rep. Warren Davidson (R-Ohio) has introduced legislation that will consolidate the 92 welfare programs in an attempt to minimize waste and redundancy. Davidson isn’t alone in his calls for welfare reform. Other members of the House Freedom Caucus are publicly demanding that welfare reform be tied into the promised Trump tax reform package.

Stacked up against other industrialized countries, the U.S. clearly gets the worst bang for its buck. In part, the reason for the failings comes from flawed designs for the American safety net. Governments on both sides of the Atlantic seem to be settled on the model of government intervention supporting those in need, but several Pacific Rim countries offer a different model based on social responsibility.

The tiny nation of Singapore has dazzled economists and pundits since it gained its independence from Great Britain. By embracing free market principles, Singapore has raised its per-capita income from $500 to over $52,000 in the short time it has been free of colonial shackles.

Even more exciting is the attitude the government takes on social welfare programming. Since its inception, the state has taken a hard stance on hand outs. The government’s longtime approach has been underpinned by the idea that universal benefits are “wasteful and inequitable” and has chosen to base their safety net on social pressures.

Singapore’s philosophy on welfare follows three basic principles : each generation should pay its own way, each family should pay its own way, and each individual should pay its own way. These aren’t just guidelines. The legislators codified the importance of family reliance by enabling seniors to file litigation against their children if they refuse to support them.

In addition to heavy social pressures, the state also requires compulsory savings for retirement, housing, and other items deemed social necessities. By requiring employers and employees to designate money for individual “rainy day funds” the government ensures that citizens have money when in need while simultaneously avoiding onerous taxes and bureaucracy that accompany the American and European models.

Other Pacific Rim countries have also dabbled in alternative forms of social welfare. Chile once instituted a meritocratic point based system which enabled those in lower income brackets to advance through subsidies offered by the state and was able to produce better results than those in Europe and America. Japan also has a history of creating social pressures to ensure the elderly and those in need are taken care of without government intervention. Hong Kong, another of the Pacific’s shining societies has its own take on welfare in which increased productivity from workers equals increased benefits.

While those in Congress struggle to find the solution to America’s welfare woes, it is important that they look not across the Atlantic to the failing welfare states of Europe for policy, but rather to the east and take note from the alternatives offered by market based models.