Thursday, February 12, 2015

Welfarism 31: More CCT and Subsidy Programs Won't Solve Self-inflicted Poverty

More welfare and subsidy programs for the poor, are they really needed?

Let us count the existing ones, at least the major subsidy programs:

1. Books and education for the poor, via DepEd, CHED, TESDA, LGUs.
2. Medicines and healthcare for the poor, via DOH, PhilHealth, LGUs, UP-PGH, PCSO/PAGCOR health vouchers, WHO/USAID/WB/ADB foreign aid in health.
3. Housing and relocation for the poor, via NHA, PagIBIG, NHMFC, LGUs, etc.
4. Land redistribution and irrigation for the poor, via DAR, NIA, DPWH, LGUs, etc.
5. Tractors, credit, seeds for the poor, via DA, LGUs, etc.
6. Rural roads and bridges for the poor, via DPWH, DAR, AFP Engg., LGUs, etc.
7. Rice subsidy for the poor, via NFA, DA
8. Train fare subsidy and electric tricycles for the poor, via DOTC, MRT, LRT, DENR, LGUs, etc.
9. Upland and coastal reforestation for the poor, via DENR, BFAR, LGUs, etc.
10. Pension and death benefits for the poor, via SSS, GSIS, LGUs.
11. Condoms and pills for the poor, via DOH, PopCom.
12. Cash transfer for the poor, via DSWD, LGUs.

If these huge and continuing subsidy programs were effective, at least for the first six, there should have been no need for the other welfare programs, especially the conditional cash transfer (CCT) program.

Given this trend of increasing or expanding welfare programs, it will not be far out that soon there will be iPad for the poor and 2nd-hand cars for the poor.

The creation of new welfare/subsidy program means past subsidy programs were either ineffective or failures. If government is less wasteful and more efficient, it should have scrapped or drastically shrank some existing but inefficient subsidy programs, before it invents and implements new subsidy programs.

What is happening now, with the blessings or direct promotion of the UN and its MDGs, is that one welfare after another is being invented and implemented.

People should have more personal and parental responsibility in running their own lives and their households.

Pwedeng painom-inom, yosi-yosi, sugal-sugal, kasi ang edukasyon ng anak at family healthcard ay hindi nila responsibilidad, entitlement nila at dapat ibigay sa kanila? May pambili ng alak at yosi, may pang pusta sa mahjong, sabong at jueteng, pero walang pang contribute sa PhilHealth card?

This is not to say or generalize that all poor people are lazy, drunkards or gamblers. Many are but not all. Poverty can be caused by nature, like a strong typhoon and big flood destroying the house, car/tractor, crops and other assets and investments. Government welfare programs are justified and needed, with time frame.

It is different  when poverty is self-inflicted. Like those who do not want to work, or they work 5 days a week but also party 5-6 nights a week and have zero savings, or spend all of the savings in one or two big party and have nothing or very little left.

In the second case, even if CCT is expanded 10x or 20x what they get now, poverty will persist. Thus, there should be poverty for the lazy and irresponsible, and inequality is not exactly bad as it rewards the hardworking and ambitious and penalizes the lazy and irresponsible.

Meanwhile, this news last week explains why more and forever welfare programs can create moral hazards problem.


See also:
Welfarism 9: Conditional Cash Transfer (CCT), November 12, 2010 
Welfarism 22: CCT, 4Ps and Central Planning, October 14, 2012 
Welfarism 29: Is Poverty Government Corruption-Created or Self-Inflicted?, October 05, 2014 
Welfarism 30: Big Government and Corruption of People's Values, December 06, 2014

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