The Roadmap for the 21st Century Project is a collaboration of free-market experts nationwide reflecting their views on the major public policy choices facing the nation, particularly those affecting economic growth and prosperity.
This Roadmap paper, by the Working Group on Poverty and Welfare Reform, describes the “perverse incentives stemming from our outdated, fossilized welfare system” and shows how those incentives can be reversed. The paper summarizes the reform proposals of House Speaker Paul Ryan (R-WI) and U.S. Senator Marco Rubio (R-FL), and it reveals a new plan that would make the Ryan and Rubio proposals even more effective. The plan described here would maintain the social safety net, making it more effective and less economically burdensome on taxpayers.
The authors conclude:
The reform described here would promote economic growth. Instead of taxpayers paying the bottom 20 percent of the income ladder a trillion dollars a year not to work, private employers would be paying them more, to work. The result would be a powerful, transformative boost to economic growth and prosperity, especially for the poorest 20 percent.
In addition, with incomes for the poor coming from work rather than government payments for broken families, the welfare incentives for family breakup would be eliminated. Those perverse incentives would be replaced instead with incentives for family formation and maintenance, so parents could share the necessary work and child care and child-raising responsibilities.