| Oddly enough, the "moral hazard" argument is well known from business, especially underwriting. If incentives are not written into the contract, the very fact that one is insured may lead to inadequate care being taken with one's property, and thus to loss. Part of the purpose of deductibles is to make sure there is some penalty for carelessness. Sometimes, conditions of storage or security are written into the contract, default on which can void it.Tranfer this to the realm of government "social insurance": unless one ensures that some consequences are felt, people will engage in reckless and self- destructive behavior because they expect to be rescued, or even profit from it. Give unwed mothers money, and you will promote unwed motherhood. Attach a penalty, like having to spend time in a supervised environment, with work/school requirements, and teen pregnancy goes down.......... |
