As a financial advisor, part of my role is helping individuals understand the economic landscape we live in—including the role of government entitlements. Entitlements are programs that guarantee qualified participants benefits such as Social Security, Medicaid, food assistance, or the Earned Income Tax Credit (EITC). These programs are often at the center of public debate, especially now that the “One Big Beautiful Bill Act” has cleared the House of Representatives. Let’s weigh both sides.
The Case for Entitlements
Improved health and economic mobility. Safety-net programs like Medicaid and SNAP improve immediate living conditions and children’s long-term health, education, and earnings.1Medicare and Medicaid expand preventive care, reducing costly emergency visits.2EITC and other income-based support are linked to better school performance and higher future wages.3
Boost to economic stability. Medicaid expansion and SNAP benefits have lowered medical debt, curtailed food insecurity, and strengthened household balance sheets.4Social Security and Supplemental Security Income lift millions—especially seniors and people with disabilities—out of poverty.5
Lifeline during transitions. Unemployment insurance and related programs act as “automatic stabilizers,” supporting consumer spending when the economy contracts.6
Early intervention pays off. Short-term cash support—such as the expanded Child Tax Credit—has been shown to improve infant cognitive development and help parents remain employed.7Entitlements also shield children, the elderly, veterans, and people with disabilities from severe hardship.1
The Case Against Entitlements
Work disincentives and dependency. Poorly structured benefits can discourage additional work because of steep “benefit cliffs.”8In several states, welfare benefits once exceeded the after-tax income of a $20-per-hour job.9Reliance can also become intergenerational.10
Economic strain and sustainability. Mandatory spending already represents roughly two-thirds of all federal outlays.6Meanwhile, Social Security and Medicare face significant long-term solvency challenges.11
One-size-fits-all approaches. Uniform federal rules may ignore local realities and stifle innovation. Administrative overlap among programs can breed confusion—and fraud.12
Risk of cultural shift. Excessive reliance on guaranteed support may dull ambition. More than half of Gen Z workers already report disengagement at work.13
The Missing Link: Curiosity and Self-Driven Growth
Curiosity is the backbone of prosperity. In most new-client meetings I compare retirement income sources from the 1970s to today:
“Fifty years ago, about 61% of workers had a pension; today fewer than 10% do. Back then, pensions supplied 56% of retiree income, Social Security 30%, and personal savings the rest. Now the mix is roughly 50% Social Security, 20% earnings, 20% pension/401(k), and 10% personal savings.”
Then I ask: “What happens if Social Security disappears or fundamentally changes—and younger workers haven’t saved on their own?” I won’t answer that for you.
Well-designed entitlements serve as economic scaffolding. Over-permissive ones can erode curiosity, drive, and creative problem-solving—the raw materials of growth. When needs are met without effort, the instinct to innovate weakens; over time, people may assume support will always be there and forget how to build.
Final Thoughts
Entitlements are a critical safety net, not a substitute for aspiration. Our challenge is to balance support with personal agency—ensuring assistance uplifts rather than anchors. Research shows that targeted cash aid and accessible healthcare deliver lasting benefits, particularly when provided early in life or during economic instability.2
References (in order of appearance)
1 National Institutes of Health. “Long-Term Health Effects of Childhood Safety-Net Exposure.”
2 Kaiser Family Foundation. “The Effects of Medicaid Expansion Under the ACA.”
3 Hoynes, H.; Schanzenbach, D.; Almond, D. “Long-Run Impacts of Childhood Access to the Safety Net.” American Economic Review (2016).
4 USDA Economic Research Service & Moody’s Analytics. “The Economic Impact of SNAP Benefits.”
5 U.S. Census Bureau. Income and Poverty in the United States (2023).
6 Congressional Budget Office. Data on mandatory spending and automatic stabilizers.
7 Columbia University Center on Poverty & Social Policy. “The 2021 Child Tax Credit and Child Poverty.”
8 National Conference of State Legislatures. “Benefits Cliffs and Public Assistance Programs.”
9 Tanner, M.; Hughes, C. “The Work Versus Welfare Trade-Off” (Cato Institute, 2013).
10 University of Chicago. “Parents’ Reliance on Welfare Leads to More Welfare Use by Their Children” (2018).
11 Congressional Budget Office. The Budget and Economic Outlook (2024).
12 Government Accountability Office. “Improper Payments: FY 2024Estimates.”
13 Gallup. “Generation Disconnected: Data on Gen Z in the Workplace” (2022).
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