The Department of Housing and Urban Development (HUD) has adopted housing vouchers as a way to finance families’ escape from the inner city. The program is described here. It is part of a much larger program. HUD has launched a comprehensive program to move inner-city residents into the suburbs. HUD will do this at taxpayers’ expense. The story is here.
The city of Memphis adopted this strategy in the mid-1990s. The statistical results began to be evident in 2005, the year I moved from Arkansas to just south of Memphis on the Mississippi side of the city line. Guess what happened to the crime rate in suburban Memphis — neighborhoods often occupied by middle-class blacks. You don’t need to guess. You know. The story is here.
VOUCHER ECONOMICS IN ONE LESSON
A voucher is a government subsidy to people who are economic failures. This is the bottom line, but with no sugar coating. The voucher system is another welfare state program. It takes money from successful people, turns it over to unsuccessful people, thereby allowing unsuccessful people to buy into a little of the lifestyle of successful people, but without becoming middle class.
A voucher is a government subsidy of a specific kind. It is a partial subsidy. In the language of economic theory, it is a subsidy at the margin. It allows a few people living on the bad side of town to rent or buy on the better side of town. I use the word “town” as a substitute for “lifestyle.” The bigger the federal program, the more people there are who can buy into the preferred lifestyle.
The recipients of vouchers need not change internally to be eligible. In fact, they are subsidized not to change internally. If they go out and get jobs, they will lose their vouchers. So, they sit tight, culturally speaking. Their attitudes do not change. Their view of economic cause and effect does not change. Only their income changes . . . at the margin. They do not become middle class. They merely buy some of the visible trinkets of the middle class. To put it insensitively — the way I love to put things — they buy middle-class bling. This annoys a lot of members of the middle class, because they worked hard for their bling.
The person who receives a voucher from the government turns the voucher over to someone who makes money by selling goods or services. The seller does not care how the buyer got his money, as long as it was legal. Money talks. Personal histories don’t. So, he sells the items, collects a voucher, and then turns the voucher over to the government. The government pays him money for the voucher.
It’s easy money for the buyer. It’s easy money for the seller. It’s easy money for the government agency administering the program. And, because hardly any voters follow the money for specific voucher programs, most voters don’t notice. The programs grow.
A billion here, a billion there, and pretty soon it’s big money.
FOOD STAMPS: THE MOTHER OF ALL VOUCHER PROGRAMS
About 47 million people receive food stamps these days. The program has become so popular that the government decided to change the name of the program. The words “food stamps” are widely understood — accurately — as a government welfare program. There is therefore a stigma attached to people who receive food stamps. They are seen as failures. This is because they are failures. They cannot or will not compete.
Government intervention is a major cause of their failure. Either they are paid by the government not to compete, or else the government makes it illegal to hire them. Minimum wage laws are the main factor here.
People on welfare do not learn the basics of deferred gratification. Necessity does not become their personal mother of invention.
(For the rest of my article, click the link.)