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Is economic theory wrong?
Question of the Day
Also, critics have often noted how poor immigrants do better than poor Americans do. In Mr. Karelis‘ framework, this is because immigrants’ idea of “relief” requires much less money. Natives feel deprived at relatively high income levels.
As for policy, Mr. Karelis argues that America should provide unconditional aid to the very lowest income earners — rather than giving them an excuse not to work, a little bit of money would increase the marginal utility of more money. Additional work incentives should take over when someone gets a job.
Essentially, the government should heal a few stings, getting the poor to the point that work can make them pain-free.
This makes sense, and it’s worth trying. But given welfare’s history in discouraging work, lawmakers should tread lightly.
Robert VerBruggen is assistant book editor at The Washington Times.
By Andrew P. Napolitano
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