ISSUES
AND ANSWERS
MR. FUND: Could
we please be seated?
Thank you.
I'm John Fund.
I'm on the editorial board of the Wall Street Journal and
I would like to welcome you here. This panel will be
discussing some of the more practical aspects of how the
charitable tax credit would work.
I believe that
we are here at the birth of an idea whose time is coming.
And I believe that we are on the threshold of an entirely
new approach to helping those in need, as Arianna
mentioned. My own personal experience with this goes back
to my college days when I was a counselor for the
Comprehensive Employment and Training Act, which was the
Federal job training program.
While I was a
counselor I met a very aged Catholic priest named Lou
Wetzel who reminded me that there had been a different
approach to helping people at a time when this country
was far poorer in resources but far richer in spirit. And
he reminded me of something which is very important. The
victors always rewrite the history books. The people who
believed in government takeover of social
responsibilities, a government takeover of compassion
have rewritten the history books. We have lost the entire
history of a different approach to solving these social
problems.
There was no
golden age of fighting poverty. There was a great deal of
distress and hardship in our past. But Fr. Wetzel
reminded me that at a time when our country was probably
one-eighth as rich in resources, we probably were eight
times more involved in terms of our communities in
helping people.
So, we have to
at least learn the lessons from that history. And I
believe that the lessons of that was that in order to
help people most you need to combine warm hearts with
hard heads, compassion must be married with personal
responsibility.
Marvin Olasky
has rescued this history in his marvelous book, The
Tragedy of American Compassion, which I commend to you.
He said there, and I think it's something we all should
remember, that the major flaw of the modern welfare state
is not that it's extravagant with money but that it's
stingy with the help that only a person can give: love,
time, care and hope. The impersonal government dole, I
might add, does nothing to cure the poverty of the soul
that mires so many people in self-destructive behavior.
There is clearly
a dissatisfaction with our current methods of helping
people. I have spoken on this subject before audiences
totalling 15,000 people. And I have posed to them a
thought experiment. The thought experiment goes like
this.
Imagine that
suddenly either because you were very successful in
business or because you won the lottery or received an
inheritance, imagine that each and every one of you
suddenly was $100,000 richer. And because you were a
compassionate person and wanted to help your fellow men
and women, you wanted to tithe 10 percent of that,
$10,000 to help those in need.
And I asked my
audience this, is there anyone in this room who would use
that $10,000 by writing a check to a government welfare
program? Out of 15,000 people, I only had one person
raise their hand and it turned out that person was hard
of hearing.
Something is
clearly wrong with an existing system when not one person
that I addressed would take additional resources of their
own and plow them into the existing programs.
After I asked
that question, I asked a second question, which is, how
many of you, in your local communities, in your local zip
code, as Bob Woodson would have it, how many of you know
a social welfare program that is actually helping people
better their condition without creating undue dependency?
About two-thirds of the people raised their hand.
So, clearly, in
those two questions, we have both an analysis of the
problem and the prescription. People are completely
dissatisfied with existing programs, yet, many know of
programs that do work and they probably would contribute
some that $10,000 to if they had a greater opportunity to
do so.
I believe the
welfare bill that just passed a few months ago is only
less than half of the job. It is dismantling, in part,
part of the 60-year federal welfare structure that we
have created. But we all know what's coming, the horror
stories about unmet needs, the children at risk, we all
know those horror stories are coming. It is incumbent
upon all of us who want to see a more effective way of
helping people and helping them help themselves, I might
add, it is incumbent upon all of us to come up with the
second half of the solution, and the charitable tax
credit, I believe, is at the center of that.
Now, we've also
been told, of course, that money is not everything. And
Arianna pointed out the importance of volunteerism. And I
really believe that if people become more connected to
these programs in their communities that more of them
will volunteer their time and their energies, as well as
their money.
And there is
some evidence for this. The Beacon Hill Institute has
conducted a survey of hundreds of nonprofit organizations
and by 51 to 12 percent these nonprofit organizations
said that people would volunteer more to their
organizations if they knew more about their mission.
By 40 percent to
20 percent, they said that people would volunteer more if
they made contributions to their organizations through,
perhaps, a vehicle like the poverty tax credit.
So, here we have
at least the genesis of changing the culture of
expectations that Bob Woodson talked about. And just as
our federal system that our Founding Fathers bequeathed
us meant that the states and localities would create
laboratories of democracy to try out these solutions, so
too, do I think a charitable tax credit could create
laboratories of compassion. Because let's be honest: most
welfare spending in the foreseeable future is going to be
channeled through the traditional government agencies.
We also know
that there are many reformers who work in those
government programs who know they are not working,
they're not truly effective. By creating a competitive
structure, a parallel competitive structure that can
challenge them and show them what does work in the
communities, we can force the government welfare programs
to rethink their mission, to rethink their program,
perhaps downsized, perhaps transfer some
responsibilities, and, perhaps even, yes, shame them into
change.
This panel is
going to, of course, address the practical aspects of
that and we have some very distinguished people. Leading
off will be David Tuerck. David is with the Beacon Hill
Institute. David is, I think, one of the people who has
been most effective in organizing this program. Prior to
joining the Beacon Hill Institute, was and currently is a
professor and chairman of the Suffolk University
Department of Economics. He holds a doctorate in
economics from the University of Virginia, where his
dissertation advisor was James Buchanan, the Nobel
Laureate who is familiar to many of you.
David?
