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The road to insolvency is paved with good intentions.

Posted By Paul Gleiser On January 10, 2013 @ 5:37 pm In Featured Articles,Fox 51 Primetime | 3 Comments

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It’s 2.5 million light years from Earth’s spot in the Milky Way Galaxy to the Andromeda Galaxy. Thanks to Wikipedia, and not to my facility in multiplying the speed of light by the number of seconds in a year and then by 2.5 million, I know that the distance to Andromeda expressed as a linear value is 2.4 x 1019 kilometers.

I don’t know what that is in miles and I’m not going to try to figure it out. The number is  just so incomprehensibly huge that it quickly becomes an abstraction.

And that’s the point.

The same occurs in discussions of U.S. government spending. The sheer number of departments, agencies and programs of the federal government and the money involved is so massive in scale that any discussion quickly becomes abstract in the same way that discussion of the distance from Earth to Andromeda is abstract. You just can’t wrap your mind around it.

So rather than try discussion on such terms I’m going to zero in on just one government department, namely the Department of Housing & Urban Development, usually just called “HUD.” With a budget of $44 billion, HUD is the eighth-largest of the 15 cabinet-level departments.

We’ll stick to this one department to illustrate a very important concept that is projectable upon much of the rest of the U.S. government and particularly those parts of the government that are pushing the country to financial ruin.

That key concept is that one of the biggest drivers of America’s massive spending and debt problem is our inability to weigh the good intentions of programs that spend billions of dollars against the actual results that those programs produce.

HUD is a case in point. HUD was created in 1965 as one part of President Lyndon Johnson’s “Great Society” initiatives in order to help poor people find housing better than the substandard dwellings in which they were currently living. It was all well-intended.

HUD went around the country acquiring property and building public housing. The residents quickly came to call their new homes “the projects.”

The projects soon became crime-ridden, blighted cesspools that were in many cases worse than the poor-quality dwellings they were intended to replace.

Faced with the unlivability of the projects, HUD then expanded Section 8 of a 1937 law to create the “Housing Choice Voucher Program.” The name “Section 8″ stuck.

Section 8 gives rent vouchers, worth up to as much as $2,200 a month, to low-income recipients so that they might leave the projects and disperse into middle class neighborhoods. Proponents of the program believed that in addition to leaving the problems of the projects behind, residents would gain the additional benefit of having middle class values rub off on them by virtue of living among the middle class.

There’s no time limit on receiving Section 8 housing assistance and no work requirement. As a result, instead of being a bridge to a better life as was intended, for many of the 2.1 million Section 8 voucher recipients, the program has become a way of life. Many recipients either avoid seeking higher income jobs or they hide the proceeds from higher income jobs so as to not risk forfeiting their Section 8 benefits.

Such was never the intention of Section 8 housing. But it’s what actually happened.

This is but a single illustration of a single government program. Project the unintended consequences of this program upon programs ranging from Supplemental Security Income (SSI) to the Supplemental Nutrition Assistance Program (SNAP, a.k.a. food stamps) to Temporary Assistance to Needy Families (TANF, a.k.a welfare) to the Supplemental Nutrition Program for Women, Infants and Children (WIC) and so on and so on and it’s not hard to see why America has a growing underclass even as the country spends itself into ruin trying to lift up the underclass.

All of these programs suffer from the enormous costs of their unintended consequences that will one day lead to the biggest unintended consequence of them all: a Greek-like financial collapse. Only this time on a massive scale. A scale comparable to the distances between galaxies.


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