The Welfare Cliff

 https://x.com/handre/status/2111462088925155514?s=51&t=cLq01Oy84YkmYPZ-URIMYw

 "The welfare cliff does not trap poor families by accident. Congress engineered a benefits system where earning one additional dollar can trigger simultaneous cuts to Medicaid, SNAP, housing vouchers, and childcare subsidies, collapsing your effective income by $5 or more. The government built a cage, and somehow we call it a safety net. Take a single mother in Houston. She earns $22,000 annually and qualifies for $35,000 in combined federal and state benefits. She gets a raise to $25,000. That $3,000 in new wages costs her $18,000 in benefits. Her employer rewarded her productivity; the state punished her for it. No rational actor climbs that wall. This is price control, but applied to human ambition. Every welfare threshold functions as a marginal tax rate that would make a Scandinavian bureaucrat jealous, often exceeding 80 or even 100 percent on the next dollar earned. This disincentive is the system's core mechanism. Dependency concentrates political power. Families tethered to benefit rolls vote to protect those rolls, and the politicians who administer the programs vote to expand them. The cliff self-perpetuates. Free market economists have traced this perverse incentive structure for decades, but the administrative state expands regardless, because a bureaucracy that manages poverty also survives by it. Genuine exit from poverty requires accumulating capital, building skills, and taking calculated risks. The welfare cliff taxes all three."