Originally Posted by RippinClapBombs

Welfare programs— particularly those with high benefit levels and/or complex eligibility rules create a disincentive to work because it creates a fear of losing benefits. We called it the "benefits cliff" where I grew up. It basically traps people into a cycle of poverty. There are certain types of aid that will foster dependence on government assistance. It does make it difficult for individuals to achieve self-sufficiency and climb out of poverty.

Welfare programs also have negative consequences on family structure, such as discouraging marriage or incentivizing single parenthood, which can, in turn, contribute to poverty. My cousin chose that route. She’s a “single mom” with 4 kids who’s been living off welfare since she was 22.

Cash Assistance Programs like Temporary Assistance for Needy Families (TANF), which provide direct cash assistance, creating a disincentive to work. The most detrimental programs are those with “stiff eligibility cliffs”— substantial reductions in benefits as income rises, such as some housing assistance or childcare subsidies, which absolutely discourages people from taking on better-paying jobs or more hours. My Aunt (who just retired) chose that route. She intentionally worked 30 something hours a week as a cashier at a grocery store that kept her within an income bracket to collect direct cash payments from the government. She’d paint houses on the side for cash (off the books). My uncle collected unemployment for years while he worked full time as a ticket scalper.

Another well known ‘off the record’ cash transaction side hustle is selling illegal narcotics. Drug dealer receives welfare check. Drug dealer takes gov assistance cash to sell dope on their ‘off the record—cash only’ side hustle. Drug dealer eventually gets caught and receives a felony conviction. Drug dealer is now unemployable for the remainder of any potential career those welfare checks were supposedly going to “lift” them into.