Home Subsidies Promote Govt Dependency

Wednesday, 09 Jan 2013 10:18 AM

By John Stossel

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
The Obama administration now proposes to spend millions more on handouts, despite ample evidence of their perverse effects.
 
Shaun Donovan, secretary of the Department of Housing and Urban Development, says, "The single most important thing HUD does is provide rental assistance to America's most vulnerable families — and the Obama administration is proposing bold steps to meet their needs." They always propose "bold steps."
 
In this case, HUD wants to spend millions more to renew Section 8 housing vouchers that help poor people pay rent.
 
The Section 8 program ballooned during the '90s to "solve" a previous government failure: crime-ridden public housing. Rent vouchers allow the feds to disperse tenants from failed projects into private residencies. There, poor people would learn good habits from middle-class people.
 
It was a reasonable idea. But, as always, there were unintended consequences.
 
"On paper, Section 8 seems like it should be successful," says Donald Gobin, a Section 8 landlord in New Hampshire. "But unless tenants have some unusual fire in their belly, the program hinders upward mobility."
 
Gobin complains that his tenants are allowed to use Section 8 subsidies for an unlimited amount of time. There is no work requirement. Recipients can become comfortably dependent on government assistance.
 
In Gobin's over 30 years of renting to Section 8 tenants, he has seen only one break free of the program. Most recipients stay on Section 8 their entire lives. They use it as a permanent crutch.
 
Government's rules kill the incentive to succeed.
 
Section 8 handouts are meant to be generous enough that tenants may afford a home defined by HUD as decent, safe, and sanitary. In its wisdom, the bureaucracy has ruled that "decent, safe, and sanitary" may require subsidies as high as $2,200 per month. But because of that, Section 8 tenants often get to live in nicer places than those who pay their own way.
 
Kevin Spaulding is an MIT graduate in Boston who works long hours as an engineer, and struggles to cover his rent and student loans. Yet all around him, he says, he sees people who don't work but live better than he does.
 
"It doesn't seem right," he says. "I work very hard but can only afford a lower-end apartment. There are nonworking people on my street who live in better places than I do because they are on Section 8."
 
Spaulding understands why his neighbors don't look for jobs. The subsidies are attractive — they cover 70 to 100 percent of rent and utilities. If Section 8 recipients accumulate money or start to make more, they lose their subsidy.
 
"Is there a real incentive for the tenants to go to work? No!" says Gobin. "They have a relatively nice house and do not have to pay for it."
 
Once people are reliant on Section 8 assistance, many do everything in their power to keep it. Some game the system by working under the table so that they do not lose the subsidy.
 
One of Gobin's lifetime Section 8 tenants started a cooking website. She made considerable money from it, so she went to great lengths to hide the site from her case manager, running it under a different name.
 
"Here's a lady that could definitely work. She actually showed me how to get benefits and play the system," says Gobin.
 
Although Section 8 adds to our debt while encouraging people to stay dependent, it isn't going away. HUD says it will continue to "make quality housing possible for every American."
 
Despite $20 billion spent on the program last year, demand for more rental assistance remains strong. There is a long waitlist to receive Section 8 housing in every state. In New York City alone, 120,000 families wait.
 
Some are truly needy, but many recipients of income transfers are far from poor.
 
America will soon be $17 trillion in debt, and our biggest federal expense is income transfers. They are justified on the grounds that some of that helps the needy. But we don't help the needy by encouraging dependency.
 
Government grows. Dependency grows.
 
John Stossel is host of "Stossel" on the Fox Business Network. He's the author of "No They Can't: Why Government Fails, but Individuals Succeed," "Give Me a Break," and "Myth, Lies, and Downright Stupidity." Read more reports from John Stossel — Click Here Now.
 

 
 
 

© Creators Syndicate Inc.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Obamacare Violates the Constitution

Wednesday, 15 Oct 2014 09:24 AM

The Constitution’s limits on government power helped create the most free and prosperous country on earth. But now, some . . .

Poverty Persists Despite $22 Trillion Spent

Wednesday, 08 Oct 2014 10:04 AM

Despite spending an astonishing $22 trillion dollars, despite 92 different government welfare programs, poverty stopped  . . .

Despite Media Reports, America Is Doing Fine

Wednesday, 01 Oct 2014 09:05 AM

Terrorism is a threat. But deaths from war are a fraction of what they were half a century ago, when we fought World War . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved