In a series of sketches for Saturday Night Live, Billy Crystal played a fictionalized version of actor and director Fernando Lamas as host of the talk show “Fernando’s Hideaway.” Crystal’s character would often say that it is better to look good than to feel good.

This was on my mind as I reviewed recent evaluations of St. Louis’s guaranteed basic income pilot by Washington University’s Center for Social Development. The review’s claims will sound familiar to anyone who has followed these pilot programs around the country. Participants reported feeling more financially secure. They were better able to pay bills and cover everyday expenses like rent, utilities, and groceries.

In many ways, the findings are exactly what one would expect. St. Louis distributed $500 per month for 18 months to several hundred households using federal pandemic relief funds. If someone suddenly receives an additional $500 each month, it should not surprise anyone that paying bills becomes easier in the short run.

The St. Louis program is also not unique. Over the past several years, cities across the country have launched similar guaranteed income pilot programs. Their evaluations tend to report the same kinds of outcomes: reduced financial stress, improved food security, and higher levels of self-reported well-being.

But as economists Hilary Hoynes and Jesse Rothstein of the University of California, Berkeley note in a review of the universal basic income literature, the new wave of guaranteed-income pilots is “not well suited” to answer the most important questions about the policy. (My colleague David Stokes wrote about this same study in 2024.) The pilot program evaluations tend to measure short-run responses that economists have already examined for decades in earlier experiments.

These evaluations often measure something quite narrow—how recipients say they feel about their financial situation. But feeling good about one’s finances is not the same thing as actually being better off.

More comprehensive research on guaranteed income programs paints a more complicated picture. A recent randomized study published by the National Bureau of Economic Research examined the effects of unconditional cash transfers using a large experimental design. In that study, 1,000 individuals were randomly selected to receive $1,000 per month for three years, while a control group received only a nominal payment.

The researchers tracked employment, income, and time use using administrative data and detailed surveys. Their findings suggest that while the payments increased consumption and temporarily improved subjective well-being, participants also worked fewer hours and saw declines in income earned from work. The transfers reduced labor-force participation and led participants to shift some of their time away from paid work and toward leisure.

In other words, the transfers made recipients feel more financially secure—but they also changed work behavior in ways that reduced earned income.

This should not come as a surprise. Economists have been studying guaranteed income–style policies for decades. Earlier negative income tax experiments and other research on income transfers have consistently found that unconditional income tends to reduce work effort modestly. Those effects may be small, but they are real and have important implications for the long-term economic impact of such policies.

None of this is to say that guaranteed income programs provide no benefit to recipients, or that the research from Washington University is flawed. Reducing financial stress and helping families weather unexpected expenses is not nothing. But policymakers should be careful not to confuse the short-term financial relief detailed in the St. Louis pilot program evaluation with long-term economic improvement.

There are also broader societal concerns that pilot evaluations like this one cannot address. One of the Show-Me Institute’s objectives is to build a state where “all Missourians are free from dependence on government.” Large unconditional cash-transfer programs, such as the program tested in St. Louis, could expand long-term dependency on government support and weaken incentives for work and self-sufficiency. That risk remains a significant policy concern.

Feeling better about your finances is not the same thing as improving the underlying economics—regardless of what Billy Crystal might advise.

Local leaders must be careful not to confuse the two, lest we commit to an expensive program that does more harm than good.

The post Economically, Feeling Better Isn’t the Same as Being Better appeared first on Show-Me Institute.

-Potential reforms to the initiative petition process in Missouri
-The need for better accountability measures in our schools
-The role consultants play in creating harmful economic development policies
-Creating free-market policies in energy
-Big changes coming to welfare policy via the One Big Beautiful Bill
-Kansas City’s expensive failures are a warning, not a model

Click here to find the newsletter.

The post Show-Me Institute’s October 2025 Newsletter appeared first on Show-Me Institute.

At the center of the issue is what’s called the “Thrifty Food Plan,” which is the formula the USDA uses to set SNAP benefits every year. In short, the formula is designed to determine the cost of a basic but nutritious diet, given the USDA’s dietary guidelines. For decades, the Thrifty Food Plan was adjusted yearly to account for the increased costs families saw in their grocery bills. But in 2021, the formula was changed to boost benefits by around 21%, far exceeding inflation.

The precise way the formula was adjusted is complicated and goes beyond the scope of this post, but suffice it to say that both the foods included in the calculation and their cost were changed to increase national SNAP expenditures by roughly $200 billion over ten years, all without an act of Congress. Historically, major changes to the Thrifty Food Plan beyond inflationary cost increases have been the result of legislation. Such a significant change without explicit approval led many to call for its immediate reversal, arguing the move violated federal law and years of precedent.

After several years of higher SNAP spending, the OBBB finally addresses the issue created in 2021. The law now ties Thrifty Food Plan increases to inflation and specifies how often the foods included in the calculation can be re-evaluated. While this may not seem like some groundbreaking change, it’s an important step to protect against future bureaucratic attempts to expand welfare benefits without congressional approval, and could ultimately save Missouri taxpayers money.

As I wrote recently, in an effort to improve SNAP’s program integrity, the OBBB will soon start putting states on the hook for a portion of benefit costs if they can’t get their payment error rates under control. Keep in mind that until the OBBB is fully implemented, the federal government covers 100% of all SNAP benefits. Meanwhile, states have overpaid recipients nearly 10% of the time. By changing the incentives, states now have a reason to lower their error rates, which should reduce wasteful spending. The Thrifty Food Plan change will also help states (maybe including Missouri) that become responsible for a portion of benefit costs (because their payment error rates are too high) from being subject to unanticipated large program cost increases in future years.

The Thrifty Food Plan changes will help rein in the administrative state and encourage states to be better stewards of taxpayer money. Missouri’s policymakers and taxpayers should welcome the return of thrift to SNAP.

The post More SNAP Changes: Restoring Thrift appeared first on Show-Me Institute.

Let’s recap. In 2015, the city passed its ridiculous source-of-income rule that requires landlords in the city to accept housing vouchers. Keep in mind that most housing vouchers involve the Section 8 program, where participation is voluntary. But in the city, and in four other towns in Missouri, you are required to participate.

The other actions are all more recent. In recent months, city leaders have:

• Passed a program to fund lawyers for people subject to evictions. This program will use tax dollars to take sides in civil matters between landlords and tenants. So not only is the city requiring landlords to accept vouchers, but it is also using public money to prevent those landlords from evicting people not paying rent at all.
• Created a pilot program to institute a guaranteed income program in the city for families with kids in public schools. Basically, this means the city is sending people money to use as they please, with no oversight or requirements. (Yes, I am familiar with the libertarian arguments for guaranteed incomes, but that idea is to replace existing welfare programs with a guaranteed income.)
• Instituted the newest, smallest, and probably most absurd program of them all to loan drivers money to register their cars. Let’s be clear—this is taking tax dollars from taxpayers to “loan” to other people to pay their taxes, in this case the sales tax on their cars. If they haven’t paid their sales tax and registered their vehicle, what makes one think they will a) repay the loan, b) get insurance, or c) renew their tags later? This is nothing more than subsidizing the purchase of a car for people who should be buying less expensive cars to start with (or not buying them at all).
• Passed a bill to repay certain resident’s medical debts, a process which, in the large majority of cases, has absolutely nothing to do with city government. (Cancelling debts owed to the city’s own health department is something I can understand.) It is just taking tax dollars and giving them away to favored groups.

The only silver lining to all of this is that the current city leadership is so poor at municipal administration that these programs are only going to “help” a small number of people. It’s almost as if the political message behind them is more important than the programs themselves. (In these cases, that is a good thing.)

This expansion of the local welfare state is the last thing St. Louis needs to turn itself around.

The post Let’s Just Get Rid of Personal Responsibility for Everyone appeared first on Show-Me Institute.

Over the past few months, I’ve talked a lot about Missouri resuming its Medicaid eligibility redetermination process. In short, during a three-year pause on eligibility checks, Missouri experienced enormous Medicaid enrollment and cost growth. Today, more than 20% of all enrollees are likely ineligible for the program, either because they make too much money, have coverage from their employer, or have moved out of state. This means that Missouri is wasting upwards of $120 million each month footing the bill for health coverage for people who aren’t qualified to receive it.

Missouri’s Medicaid agency is now two months into processing redeterminations and enrollment has finally started dropping, albeit slowly. Recent reports from both national and local news outlets are attributing the enrollment decline to “paperwork issues.” In my opinion, this characterization is incredibly misleading.

States classify anyone who fails to respond to a renewal application as being removed from the program for “procedure reasons.” This is being referred to as “paperwork issues” by some. This is in contrast to the other classification of individuals removed from the program—those who were “determined ineligible.” The problem is that if the state never hears back from an enrollee after repeated attempts to confirm their eligibility, they can only be removed from the program for “procedure reasons” because there wasn’t enough information to determine their eligibility one way or another. Calling all failures to respond to the state Medicaid eligibility checks “paperwork issues” misses a key point.

Someone who knows they no longer qualify for coverage is incredibly unlikely to go through the effort of filling out and returning the Medicaid renewal application. For years, individuals on essentially every welfare program (including Medicaid, Supplemental Nutrition Assistance Program [food stamps], and Temporary Assistance for Needy Families) have been required to inform the state when something changes that would make them ineligible for services, but they rarely do. Recently, the Congressional Budget Office estimated that more than 5 million Medicaid enrollees nationally are currently enrolled in private health coverage, meaning states are losing billions providing coverage to individuals for whom it’s completely unnecessary.

Most Medicaid rules are biased toward recipients maintaining continuous coverage, which may sometimes be a good thing, but for many people, Medicaid is a resource they only need temporarily. No one is saying that eligible Medicaid enrollees should be removed from the program, but even if that does happen, they’re still effectively covered because the federal government will cover up to three prior months of health costs once they’re determined to be eligible again.

Removing Medicaid recipients who don’t provide evidence of eligibility is a necessary act of fiscal prudence—an act of prudence that, prior to three years ago, was standard, federally mandated operating procedure.

There’s no getting around the fact that more state tax dollars being spent on ineligible Medicaid enrollees means less money for other state spending priorities, such as education and infrastructure. If Missouri’s elected officials ever want a chance at reining in Medicaid’s runaway spending, scrutinizing the program’s rolls must remain part of the equation, and occasional drops in enrollment must be normalized as simply par for the course.

The post Problems with Paperwork appeared first on Show-Me Institute.

For years, I’ve been complaining about Missouri’s IT systems and have been begging for improved data quality. Back in 2020, due to insufficient computer systems, pandemic unemployment benefits couldn’t be tied to recipient incomes, which led to the federal government paying many individuals more to stay home than to go back to work.

More recently, I’ve written about Missouri’s sluggish start to the post-pandemic Medicaid eligibility redetermination process. States often struggle to keep up-to-date income or address information on Medicaid and other welfare program recipients, which is why there are frequent checks to see whether those enrolled in these costly programs are still eligible to receive services. But for the last three years, many recipients maintained coverage because the state didn’t know that they no longer qualified, or weren’t allowed to remove them even if they did. It’s easy to see how poor data in such cases can quickly result in serious government waste.

These data limitations are a big reason why I wrote that the recently signed “benefit cliff” legislation is a bad idea. While it may sound good to slowly reduce welfare benefits as recipient incomes increase to avoid an abrupt loss of services, the government implementing something like that requires far better data than what is available. Missouri doesn’t keep real-time income data on program recipients, and often only checks earnings once per year. Even if a program tries to offer a welfare off-ramp, if eligibility is only checked once per year, all you have is another cliff.

All this to say, accountability in government spending is incredibly important, and it’s unfortunate that Missouri has fallen so far behind. But it’s also a good thing that the federal government wants to know that the summer food stamp benefits are actually making it to kids who need them—regardless of whether Missouri could get its act together to comply with the program’s requirements.

For a while now, the costs for Missouri’s insufficient computer systems were primarily borne by state taxpayers via bloated programs. But now that our state is missing out on millions of available federal funds aimed at benefiting children, it is my hope the issue of improving IT is something everyone can agree on. Let’s hope Missouri’s legislature listens and takes action next year.

The post Data’s Double-Edged Sword appeared first on Show-Me Institute.

• A recap of the legislative session
• Missouri falling further behind on school choice
• Missouri’s expanding welfare state
• Property taxes
• The failure of open enrollment legislation

Click here to find the newsletter.

The post Show-Me Institute’s June 2023 Newsletter appeared first on Show-Me Institute.

The county library announced Wednesday that the social workers will provide free assistance to connect people with resources and referrals regarding things like child care, health care, parenting resources, housing, food insecurity, substance abuse and jobs.

People used to have neighbors, fellow church members, extended family, or more to help them get through difficult situations. Simply put, you had a community. Now, apparently, you book an appointment at the local library with an “expert” who will likely do very little beyond helping people fill out government paperwork.

I am not just a middle-aged man complaining here. (Well, perhaps I am, but I have some citations.) The changes to our culture in this respect were famously documented in the book, Bowling Alone by Robert Putnam. He tells the story of the decline of social interaction (otherwise known as social capital) through the lens of bowling leagues, which not long ago were a ubiquitous pastime for Americans and have now gone the way of the rotary phone. We spend so much time alone interacting with technology that most people, especially those in younger generations, have no desire to join an organization like the Rotary Club. When I speak at service clubs or other groups, I—age 51—am usually the youngest person there.

So why should anyone care how or if people choose to interact? We should care because it matters for our society.  According to economist Isabel Sawhill, “many researchers have found that [greater] social capital is associated with higher economic growth rates, better health outcomes, and more stable democracies.”

The absence of social capital has serious harms. One of those harms for people who don’t have community to rely upon in difficult times is dependency on government. The Obama Administration had Julia, the Biden Administration has Linda. (I don’t even want to guess what type of fictional female character Trump might have created.) Julia and Linda are the fictional characters used in cartoon storylines to joyfully describe how liberal policies will take care of these women and their children (men are never around) from cradle to grave. From child tax credits to free preschool, free community college, Medicaid, Medicare, and scores of other programs, the story depicts a person dependent on government for their entire lives. But that is the all-too-real alternative for people who lack the vital social connections to weather the tougher parts of life.

Interviews with people who have had their residences taken for highway projects, urban renewal, etc., often show that the most devastating part of the process was the loss of community. Everything else can be replaced—but not the sense of belonging to a group of people who cared about you. Churches, neighborhoods, and social groups used to be the charitable foundation of our country. But as those institutions have declined, government is left as the only option when aid is needed. As any political machine hack will tell you, as bad as the service may be, at least it’s something. Too many people are willing to give up too much in exchange for that governmental “something.”

Obviously, the St. Louis County library didn’t cause any of this. Libraries can be a part of building more social capital, among many other wonderful attributes. The social problems I have described require a change to our society, and one that government should only have a minimal role in. But having a taxpayer-funded organization use tax dollars (and private grants, to be fair) to help more people access what will mostly be (let’s not deny the obvious) other tax-funded government services isn’t the answer.

The post Reading Alone appeared first on Show-Me Institute.

Welfare programs often create perverse incentives regarding work; recipients don’t look for jobs due to the risk of reaching a level of income that would cause them to lose access to the welfare program. Because of this problem, welfare programs can exacerbate the poverty problem they are intended to fix.

Politicians have floated the idea of a universal basic income (UBI) many times as an antidote to the incentive problems welfare programs tend to create. Andrew Yang made it a prominent plank in his 2020 presidential campaign, promising to give out $1,000 per month to every American adult if elected. Since UBI offers every single person (rich and poor alike) a certain amount of money per month, no strings attached, its proponents argue that it wouldn’t create an incentive against working.

Some free-market economists have argued that the replacement of welfare programs with UBI could reduce the bureaucratic power of government—the state would have less of a say over how people choose to live or spend their money. Charles Murray emphasized replacement as a key feature of UBI implementation:

The first rule is that the basic guaranteed income has to replace everything else — it’s not an add-on. So there’s no more food stamps; there’s no more Medicaid; you just go down the whole list. None of that’s left. The government gives money; other human needs are dealt with by other human beings in the neighborhood, in the community, in the organizations.

For UBI to serve as a tool that helps low-income individuals while increasing government transparency and decreasing state paternalism, it must be accompanied by a complete overhaul of how the welfare state currently functions.

The proposal put forward by the City of St. Louis disregards all of the wisdom stated above. First, the incentive problem that UBI tries to address is mostly ignored in the guaranteed basic income (GBI) program. Recipients of the “free” money must fall at or below a certain mark of the poverty level, which could create an incentive against working. Second, the proposed GBI program would not replace other social welfare programs. A spokesman for Mayor Jones expressed that one of the administration’s priorities is to ensure that the GBI program does not force its recipients off other government benefits, such as food stamps, for fear that it “might leave residents worse off.” In other words, Mayor Jones is not looking to reform the current welfare programs in St. Louis—she is hoping to establish another one.

Additionally, this proposal does not address concerns about the future sustainability of such a program. Mayor Jones proposes using money the city received from the federal government in pandemic aid to pay for the program. Once the $5 million is handed out, how does the city plan to keep funding this program?

If the mayor really wants to help low-income individuals, how about using the $5 million to improve the bus system that has seen massive service cuts in recent years? The reductions in bus lines have negatively affected many low-income individuals who rely on buses to get around St. Louis.

In any case, countless problems accompany the program Mayor Jones proposes. As tends to be the case in public policy, closer attention to incentives and to future financial viability could help the City of St. Louis craft proposals that would better serve the poor of St. Louis.

The post Welfare Reform or Welfare Expansion? appeared first on Show-Me Institute.

Inflation has reared its ugly head again—hitting a 30-year high of 6.2 percent, which is more than triple the Federal Reserve’s definition of stable prices. Unfortunately, the wayward policies that have contributed to soaring prices, pervasive shortages, and sputtering growth are not going away. In fact, they are poised to get a whole lot worse.

President Biden signed the first of two giant spending bills into law on Nov. 15. That was the $1 trillion “Infrastructure Investment and Jobs Act.” The second bill is the administration’s proposed Build Back Better Act, passed by the U.S. House of Representatives a few days later and now pending before the Senate.

Taken together, we are looking at a potential tsunami of bad policymaking. Let us count the ways the two pieces of legislation threaten our nation’s freedom and prosperity:

#1. The infrastructure act is only partially about infrastructure as most people think of it. For example, the law spends only $110 billion on fixing roads and bridges—barely putting a dent in the maintenance backlog—while Amtrak alone will get 60 percent as much as all of America’s bridges and roads combined. Yes, that Amtrak—the one that has consistently run operating losses almost every year for the past 50 years. Tens of billions of additional dollars will go into public transportation even though only five percent of Americans rely on public transit in commuting to work.

#2. Also under the infrastructure act, the government says it will make “the largest investment in clean energy transmission and grid in American history,” and it calls for “building thousands of miles of new resilient transmission lines to facilitate the expansion of renewables and clean energy.” Wind and solar have been lavishly supported for decades, but still only account for 11 percent of U.S. electrical power generation, and their actual role is much less than that because they are intermittent. Does anyone seriously think they can come anywhere close to replacing gas and coal as the primary source of 60 percent of electrical power generation and be equally cheap, reliable, and easy to use?

#3. Then, too, as part of the green energy component of the “infrastructure” plan, the federal government will mastermind the building of a network of 500,000 electric vehicle charging stations, thereby not only putting taxpayer money at risk, but also putting the federal government in the position of picking winners and losers among America’s small-town communities through its choice of where to put those stations. The survival of local communities may soon depend increasingly on Washington, D.C.’s whims.

#4. The proposed Build Back Better Act would permanently and dramatically expand the welfare state and abolish work requirements as a condition for receiving aid. There would be some “free money” for taxpayers at all levels of income. The wealthy would get theirs in the form of expanded state and local tax (aka SALT) deductibility. The top current deduction of $10,000 isn’t much for a top-one-percenter living in an expensive house in a spendthrift, high-tax state like California or New York. Build Back Better includes an eightfold expansion of the maximum SALT deduction to $80,000. The typical taxpayer would get no benefit, while top earners would receive an average windfall of nearly $23,000. The Build Back Better Act would also permanently enshrine the Biden administration’s reimagined Child Care Tax Credit, which would allow a family to receive thousands of dollars a year ($3,600 per child under age 6 and $3,000 per child at 17 and under) in government cash with zero earned income and no expectation whatsoever of anyone having to seek a job.

#5. Adjusted for a lot of gimmickry, a close reading of the bill shows that it would result in nearly three trillion dollars in cumulative budget deficits over the next decade. Claims that the bill will not add a dime to deficits and debt are entirely spurious.

To sum up, what we have here is an overarching vision for transforming America. It would concentrate more decision-making power in the hands of the central government. And it would turn what has been a society of producers, workers, and investors into a society of people and institutions (including unions, businesses, schools, and an enlarged army of social workers and activists) whose livelihoods depend on what government gives them.

The post Commentary: A Tsunami of Bad Policy appeared first on Show-Me Institute.

But that is not good enough for certain Missouri cities that won’t be content until we are all forced onto the dole.

Maplewood is the latest city to consider passing a “source-of-income” law compelling landlords who operate in that city to accept Section 8 housing vouchers as payment. It would be illegal to decline to rent to people in the program, even though it is a federal program and federal law allows landlords to choose to participate or not. The City of St. Louis, Clayton, and Webster Groves are the three cities in Missouri that currently have these laws. Kansas City has considered it, but thankfully not passed it.

Cities cannot, and should not, be able to tell doctors within their boundaries that they must take Medicaid patients. Cities should not be able to force grocery stores to take food stamps. Clearly, most grocery stores choose to, just like many landlords choose to participate in the Section 8 program, and many doctors and hospitals serve Medicaid patients. I can’t find any examples in Missouri of cities that compel food stamp acceptance, but feel free to share with me if there are (so I can go oppose it). For food stamps, the debate is more about what you can buy with the program, not where you can buy it.

You might — believe it or not — as a landlord, store owner, unemployed person, disabled person, or anything else, choose not to accept a government welfare check or join in a certain program. You have, and should continue to have, that right. Cities with “source-of-income” rules are basically like Marcellus Wallace telling the Harley-Davidson riding, sword-wielding watch-enthusiast/boxer Butch Coolidge what he should do with his sense of pride.

The fact that Marcellus is a mobster just makes the analogy more delicious. These “source-of-income” rules are relatively new to Missouri. But new or not, they are wrong. The state should not compel anyone to participate in a welfare program if they don’t choose to, and this includes landlords. Maplewood should reject this proposal (which has not yet been introduced as a bill). If cities continue to adopt such laws, the state legislature needs to step in and prevent it like they did in Texas.

The post You Will Accept This Welfare Check Whether You Want It or Not appeared first on Show-Me Institute.

Imagine painting yourself into a corner—as someone of limited means who is subject to wacky increases in the cost of something as basic as renting an apartment. I do mean wacky, with this big component in the cost of living not just doubling, but going up no fewer than eight times over the course of a single year.

That happened to me in 1975 as the sole breadwinner in a family of three. I offer this small bit of personal history as something to think about in pondering today’s news.

In the beginning of that long-ago year, I quit my job as a newspaper reporter at the St. Louis Globe-Democrat and moved to Beirut as a self-deployed freelance writer. This was shortly after the OPEC oil embargo and the quadrupling of oil prices in 1974. Thinking the Middle East would experience one of the greatest transfers of wealth in the history of the world, I wanted to be there as an observer.

My wife and I left a three-bedroom, two-bath apartment St. Louis’s Central West End. Our rent was $165 a month. With one young child, the cheapest, somewhat comparable place we could find in Beirut cost $700 a month.

The civil war in Lebanon erupted in early April, shortly after our arrival. By the end of the year, fighting in the streets of Beirut became so fierce it led to a mass evacuation of most of the city’s large expatriate business population. As a result, the Lebanese capital was suddenly “halas” —the Arabic word for finished—as the regional center for business in the Middle East. But the spending spree in Saudi Arabia, Iran, and other countries was just beginning. We resettled in Bahrain, where more sticker shock awaited. We moved into a three-bedroom, two-bath bungalow that cost more than $1,400 a month.

Why would it cost more than eight times as much money to find a place to live in the Middle East as it would in St. Louis?

The Middle East had been bitten by a strange curse—known in economic literature as the “resource curse,” or the paradox of plenty. Resource-rich countries are all too likely to squander the windfall wealth that comes from possession of precious metals or vital resources such as oil. Bubbles develop as people who have benefited the most from a sudden influx of money bid up the price of real estate and other assets that then become increasingly unaffordable for many other people.

I got lucky. I landed a full-time position with Mideast Markets, a high-priced publication that had sprung up to provide ongoing coverage of the fast-changing business scene in the Middle East. My new employer paid the full cost of our move and our housing as well. Bahrain became my jumping-off point for traveling throughout the region over the next three years.

With my own eyes, I saw the inevitability of prodigious waste in places where money was no object. I also saw how the resource curse exacerbates the divide between haves and have-nots. In Bahrain we lived across the street from a Persian family where eight sons—all in their twenties and thirties—were still living with their parents. Though they all had jobs, they had been priced out of the housing market—and this at time when others we knew were making fortunes in speculating in real estate.

Today our own government in Washington, D.C., is acting in much the same way as the governments in the newly oil-rich countries of yesteryear. Since the onset of the pandemic, our government has been passing out “free” money all kinds of reasons—from paying the unemployed to stay unemployed (knowing they would lose money by going back to work) to $3,000-a-child tax credits and $2,800 handouts to households with annual incomes of up to $140,000. And now we are seeing some of the same (if not quite so wild) distortions in housing prices and other asset values I saw in the Middle East.

I am not arguing against a safety net for the truly needy. Nor am I saying that there should be no compensation from governmental entities for government-ordered lockdowns that have forced thousands businesses to close their doors and deprived millions of workers of their livelihoods.

But where is all the money to come from to pay for what looks like a massive and ill-considered increase in the size of the welfare state? Not from current tax revenues or any gain in productive capacity. It is coming from funny money—trillions of dollars of borrowed or newly created money used to grease the wheels of an already strong recovery. If not repudiated through inflation, these financial obligations will have to repaid by American taxpayers in future years.

Good luck with that. How can making people less reliant on doing things for themselves and more dependent on getting checks from the government be a recipe for sound money and future success?

The post Return of the Resource Curse: The Trouble That Comes from Too Much Money appeared first on Show-Me Institute.

Would that be a fair game, or even fun? Of course not. But this version of Life is reality for many Americans. Where people grow up—their zip code or place on the game board—significantly affects their chances to succeed as adults.

Without a doubt Americans, rich and poor, are much better off now than they were a hundred years ago thanks to unprecedented economic growth made possible by the free enterprise of individuals and pro-market political institutions. Nevertheless, economic mobility, or the ability to move up the income ladder, varies for children depending on where they live, and these disparities have consequences—both for children growing up in low-income families and for the rest of the state.

A recent pair of essays from the Show-Me Institute digs deeper into the data on poverty and upward mobility in Missouri and asks what, if anything, can be done to break cycles of poverty. The solution is not simply to expand entitlement spending; America has been increasing welfare benefits for over 50 years, and it’s time to change our approach.

While child poverty is decreasing in Missouri—the percentage of children in poverty dropped from 22.6 percent in 2012 to 18.6 percent in 2017—child poverty rates in Missouri range from single digits, as in St. Charles County, to over 40 percent in St. Louis City. Moreover, data on economic mobility suggest that about one-third of children born into low-income homes in the areas surrounding Cape Girardeau, Poplar Bluff, Kansas City, and St. Louis will remain in poverty as adults.

Searching for solutions to this problem is important primarily so children in poverty have more opportunities for a better future; but Missourians should also be aware of the economic impact of lifelong poverty on the state and taxpayers. Based on economic mobility data for Missouri, roughly 77,800 people who were poor as children in the late 1980s will remain poor throughout their adult lives and will collect a conservatively estimated $15 billion in lifetime welfare benefits as a group.

Having a safety net is important, but could Missouri find a better way to invest these public dollars to help people move up and out of poverty? One promising possibility is the improvement of our education system through competition and innovation to better meet the needs of low-income students.

Data show significant gaps in test scores between low-income students and their peers on the National Assessment of Education Progress (NAEP) and the ACT college entrance exam in Missouri. While quality education cannot be measured by standardized test scores alone, these results do tell us that low-income students are less likely than their peers to have mastered the basic academic skills that will enable them to be successful in college or their chosen career.

Thankfully, Missourians can look to other states for examples of programs that help students from low-income families be successful, including specialized vocational high schools and emergency grants to help low-income college students stay enrolled. Whether by helping low-income kids to get a jump-start on a career of their choice or by better ensuring that they can get through college, Missouri should move toward an education system that meets the diverse needs and interests of these students though innovative schools and programs.

No single reform to education or any other policy area will end cyclical poverty. State leaders and policymakers do have the opportunity, however, to prioritize free-market solutions that enable people to provide for themselves and their families and help create surer pathways to prosperity.

The post Cyclical Poverty Is a Problem in Missouri-What Can Be Done About It? appeared first on Show-Me Institute.

The legislature was right to reject the Medicaid expansion for a number of reasons—among them, the program's patient access and health outcome problems and its soaring cost to taxpayers. But one of the most important arguments against expanding welfare to the unimpoverished was captured by Ronald Reagan in testimony to Congress nearly 50 years ago. Reagan's admonition that "[w]e should measure welfare's success by how many people leave welfare, not by how many more are added" is probably the best-recognized line from that speech. But I'd like to quote another sentence that is at least as important:

It doesn't seem right to reduce a man's take-home pay with taxes and then send him a government dole which robs him of the feeling of accomplishment and dignity which comes from providing for his family by his own efforts.

It's a bad idea to create a new class of welfare recipients and graft them into a broken program like Medicaid, but it is an especially bad idea to substantively change the standard for who is supposed to be receiving welfare to begin with. Medicaid is broken, but even if it weren't, government shouldn't be freshly yoking millions of able-bodied Americans to the welfare state. 

Reform-minded free marketeers should look for ways to empower workers and widen their opportunities. Unfortunately, in too many ways, the "Affordable Care Act" does precisely the opposite. Congratulations to the legislature for holding firm against Obamacare.

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Parents of children up to age 36 months are eligible to earn “baby bucks” when they make good parenting choices, such as participation in child-development programs for family events.

Parents can also earn “baby bucks” through other actions, like signing up for WIC assistance or allowing Parents as Teachers into their homes. The “baby bucks” are redeemable for items such as diapers, toys, and clothes, which are donated to the Baby Bucks Boutique.

I spoke with a representative from the Alabama program who confirmed that “baby bucks” is open to all parents with children in the eligible age range. Although Parents as Teachers obviously can’t enroll wealthy families in WIC, parents at all income levels can earn “baby bucks” in various ways.

“Baby bucks” are not given only to families that couldn’t afford baby items on their own — kind of like the entire Parents As Teachers model, which isn’t means-tested. A program that starts out as free for all parents, so that it’s not a welfare program for the few, can turn into a welfare program for everyone.

I don’t know of any Parents as Teachers programs in Missouri that offer material incentives for participation and parenting decisions. But if you’re not enthusiastic about publicly funded programs giving out stuff in exchange for approved parenting behavior, keep in mind that this is a direction that Parents as Teachers can go.

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