Question

The world of welfare is replete with urban legends. My favorite goes something like this: “I was standing in line at the grocery store one day behind a nicely dressed woman who was buying beer, steak, shrimp, and a whole bunch of stuff I couldn’t afford. She had them put the steak and shrimp on her food stamp card and used her cash to buy the beer. She packed up her groceries and went to her brand new SUV.” In teaching this subject for years, I have heard this story in countless renditions from students who were either customers or grocery employees. The story is almost always the same. While the story may be about fraud, it is also quite likely about their misinterpreting the actions of a foster parent. Most states give foster families Medicaid cards and an allotment on a food stamp card to pay for the food and medical expenses of the children in their care. That some of these families are wealthy enough to afford nice meals and nice vehicles does not diminish our obligation to pay them for the service they are providing us by caring for orphaned, discarded, or abused children or those children whose parents are in prison.

1. What other “urban legends” exist about the poor and welfare? What research could be conducted to dispel these legends or prove them to be factual?
2. How would respond to the statement, “... Why should wealthy people who can afford to raise many children be given any food stamps for foster children? After all, they may claim the children on their tax returns and that should be sufficient...”

Answer 1

a. Other urban legends are that the welfare system's are small, that because of lack of government support, poverty is widespread and that welfare penalises work. Research such as comprehensive study about the various welfare programs could be conducted because the current research is scattered and doesn't include all the support and programs which the government undertakes. Poverty is prevalent based on the fact that a family's income falls below a certain threshold, but it doesn't consider the material aspects as these families often don't go hungry and own tangible assets, thus just because their income falls below the official poverty level, doesn't necessarily mean they are poor or don't have enough food to survive.Thus the government needs to conduct research on such aspects so that welfare is targeted to those families which need it the most. Regarding that welfare penalises work, extensive research has to be conducted as families which have low paying jobs are also paid for welfare, it is not necessarily the unemployed who are paid the benefits.

b. If wealthy people are given food stamps, it ensures that more children are adopted by such families and it indirectly reduces the burden of the government to take care of these children through tax income. For example the government will increasingly find the complete cost of looking after such children to be expensive as they have to look after their living conditions, health, education, etc which turns out to be much more expensive. By incentivising such forms of fostering children, the government pays a small cost which otherwise would have been huge.