Thomas Sowell‘s latest Human Events column highlights the problem of “moral hazard”:
Although “moral hazard” is an insurance term, it applies to other
government policies besides insurance. International studies show that
people in countries with more generous and long-lasting unemployment
compensation spend less time looking for jobs. In the United States,
where unemployment compensation is less generous than in Western Europe,
unemployed Americans spend more hours looking for work than do
unemployed Europeans in countries with more generous unemployment
compensation.People change their behavior in other ways when the
government pays with the taxpayers’ money. After welfare became more
readily available in the 1960s, unwed motherhood skyrocketed. The
country is still paying the price for that– of which the money is the
least of it. Children raised by single mothers on welfare have far
higher rates of crime, welfare and other social pathology.San
Francisco has been one of the most generous cities in the country when
it comes to subsidizing the homeless. Should we be surprised that
homelessness is a big problem in San Francisco?…
We
hear a lot of talk about “safety nets” from big-government liberals, who
act as if there is a certain pre-destined amount of harm that people
will suffer, so that it is just a question of the government helping
those who are harmed. But we hear very little about “moral hazard” from
big-government liberals. We all need safety nets. That is why we “save
for a rainy day,” instead of living it up to the limit of our income and
beyond.We also hear a lot of talk about “the uninsured,” for
whose benefit we are to drastically change the whole medical-care
system. But income data show that many of those uninsured people have
incomes from which they could easily afford insurance. But they can live
it up instead, because the government has mandated that hospital
emergency rooms treat everyone.All of this is a large hazard to taxpayers. And it is not very moral.
