On Thursday, as part of the Liberty and Economic Freedom Speaker Series, we had Dr. Jeffrey Dorfman visit campus. His talk, "How the well-meaning government hurts the poor" was supurb. I was pleased that about 250-275 people showed up in Degenstein Theatre to see him talk: approximately 10% of the student body was there!
The biggest thing I learned was about the magnitude of the disincentives faced by the working poor to gain raises or promotions. At one point in the talk, he described the incentives faced by a single mom. If she earns under $29,000, she will receive many extra government benefits. But once she hits $29,000, she starts losing so much in benefits that she won't have the same level of after-tax income/benefits until she earns $69,000! That is terrible policy and gives the working poor an incentive to NOT seek promotions or acquire additional human capital.
One main problem is all of the different government agencies have their rules on when benefits get phased out, but most are in the same income range. I left the talk somewhat depressed, as the easy solution for this would be to abolish all the welfare programs and replace them with cash payments. The political likelihood of that happening soon, however, is next to zero.