A brief note on the economics of poverty

I'm still technically an economics and social trends reporter, so I need to shore up my bona fides on this topic while I'm constantly consumed with the fast-developing Phoenix/Lawrence/Dorjils stories.

So here is a thought. We hear a lot about - and sometimes grouse about - welfare and other government subsidies to help the indigent. Supporters say these subsidies are crucial to the survival of the people our economy leaves behind and necessary for the health and well-being of their children.

Detractors tend to say welfare begets more dependence and entrenches the cycles of poverty without really helping anyone.

But what few people note is how both sides have merit on one common point: Welfare programs poorly designed toward the goal they should all have - Asset building.

I'm not alone here proposing some radical move in a bold Op-Ed piece. I'm reporting what the dominant research in this area is consistently saying.

The problem is that welfare is set to shut down as people make more and accumulate more money, leaving them often in a Catch-22: If they work, they make less or the same, while if they don't, they mired in the haze of welfare dependence.

More importantly, many aid and subsidy packages are set to disqualify people if they save a rather small amount of money.

This is unbelievably short-sighted. People who need welfare subsidies because of pay that fails to meet basic living costs should be counseled and enrolled by the government into asset-building plans, not penalized for trying to save.

In short, people should be more slowly weaned off of assistance as they work and their pay rises. Savings programs should be encouraged or even compulsory for welfare recipients, and the amount they save should not inversely affect what they are eligible to receive.