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Strengthening families is key economic issue


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For those in long-term poverty, there are two causes: physical or mental illness or some form of failing families.

Indiana gubernatorial candidate Mike Pence recently raised some eyebrows by arguing that the condition of families was an economic issue. This is a tough matter to discuss, so it is best to begin with fiscal issues and poverty.

Throughout their lifetimes, perhaps half of Americans spend some time in the formal definition of poverty. Most of it, like my decade, is fairly benign and caused by short-term job losses, college and other common vicissitudes of life.

For those in long-term poverty, there are two causes: physical or mental illness or some form of failing families. The latter of these is far and away the bigger problem, manifesting itself not only in our economic performance, but in local, state and federal budgets.

It bears wading through the meretricious babble about the economic causes of poverty and simply acknowledge that the proximal causes of poverty, dropping out of school (one in five kids) and single parenthood (two in five kids), are best described as failures of families.

Federal spending on Medicaid and welfare (Temporary Assistance for Needy Families, Supplemental Nutritional Assistance Program) alone exceeds the defense budget. Add to that Housing and Urban Development and Health and Human Services, and sundry spending at the departments of energy, agriculture and education, and the entirety of the federal deficit in its worst year is consumed by programs to mitigate long-term poverty.

Of course it isn’t fair to lay all the blame at the feet of failed families. They are only 75 percent of the poverty problem. The share each Hoosier household pays is roughly $10,500 per year.

At the state level, the size of the problem is relatively worse. We spend annually about $2.5 billion on Medicaid match and another half-billion dollars through Department of Child Services.

That is more than $1,078 per Hoosier household in state tax dollars spent to remedy the ills of broken families. This is about one in four state tax dollars. Throw in the entirety of the K-12 funding formulary adjustment, our prison budget and a few hundred thousand

dollars in township poor relief, and it should be clear: Broken and failing families aren’t merely an economic issue, they are the economic issue.

So, if something like a third of all tax dollars are spent mitigating the ill effects of families who cannot stay together, make socially or privately rational choices about reproduction or inconvenience themselves to read to their kids, why don’t we do something about it? The answer is simple and in three parts.

First, to be truly free, one must be able not only to excel but also to fail.

So, in a free nation, limiting the reproductive choices of a teenage dropout cannot devolve to government. Rather it remains the purview of a culture and society to inhibit poor choices. Second, much familial failure is beyond the scope of policy intervention, even in totalitarian regimes. Finally, the matter has become paralytically politicized around peripheral issues.

As a mature and healthy society we must have a frank and meaningful conversation about ways to strengthen families or ignore it and continue to pay the hefty price.

Michael J. Hicks is the director of the Center for Business and Economic Research and an associate professor of economics in the Miller College of Business at Ball State University. Send comments to letters@dailyjournal.net.

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