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Politics : A US National Health Care System? -- Ignore unavailable to you. Want to Upgrade?

To: Katelew who wrote (14665)	3/17/2010 6:22:01 PM
From: TimF	Respond to of 42652

Thanks for responding. People should do lots of things, getting off welfare if they can is one of them. But the reality is people respond to incentives. Not as perfectly or always as directly or immediately as the ideal early classical economic models might suggest, but they still respond. If working harder and longer produces no extra net compensation, income or wealth, than many people won't work harder and longer. If it actually results in a reduction of wealth (which it generally doesn't but in narrow cases it can even now, and will to a greater extent if you expand taxation and income based subsidies and benefits) than even fewer people will work harder and longer. Throughout time, even before the invention of money, let alone modern economic theories, the main incentive for people to work was that they where better off if they did so. Monkeying with that incentive to a greater and greater degree seems quite problematic, and if taken to far could even be disastrous. Allowing for (or when necessary in narrow cases creating) positive incentives for useful action, seems far more likely to succeed than just pushing the idea that people should do what you want them to do, even when they don't benefit from it. And yes you could in theory deal with this incentive by pushing them off of welfare and subsidies, but its not like we can reasonably evaluate each individuals circumstances and motives to any great degree. Pushing people off would mostly involve time limits. They might be somewhat useful but they tend to get extended or removed when times or rough or at any other time when a sufficient coalition forms behind changing the limits. Also many subsidies and benefits have not time limits, and that's likely to continue to be the case (and would apply to the insurance subsidies in question). I don't think we reasonably can or should, try to make sure that every dollar in additional gross income always or even typically results in a dollar of additional net after tax and benefits income. The only way to do that is to have no income based tax, and no income determined benefits. But its important to try to not take all of or most of the additional dollar, for both poor working people, and for richer people (for whom income determined benefits aren't a factor, but high marginal income tax rates can be).