We have become a society of freeloaders. In an ever increasing attempt to make life better for the indigent in our communities, we have created a welfare state that has not only failed to reduce poverty, it has actually in many cases made things worse. One of the reasons for this is one of the most basic principles of economics: People respond to incentives. When you provide "money for nothing" there will always be long lines of people ready to take it.

While our economy has grown to be the envy of the world, some disturbing trends have emerged. One of the most basic is that approximately 20% of the population pays almost 80% of Federal Income Tax. Of course that statistic is only part of the story, the top 10% in the US also control almost 70% of the total wealth. Why have things become so skewed?

First the obvious: Working and earning a living is difficult. If money is offered to people so that they can survive without needing to go through the trouble of finding, keeping, and working a job then rest assured, many will do just that. Worse, the "crutch" provided by this assistance serves as a disincentive to work and serves to exacerbate the number of poor. Rather than functioning as temporary assistance, these programs become welfare for life.

Alexis de Tocqueville, the French author and statesman that famously traveled and commented on American life in 1831, wrote a "Memoir on Pauperism" arguing against "the trap" of public relief. Chief among de Tocqueville's concerns are the unforeseen consequences of the good intentions that inspire any system of large-scale state-sponsored relief to the able-bodied poor. He argued that the "entitlement" to public charity ultimately traps its claimant in a degrading system, that it produces an overweening and oppressive bureaucratic state, that it weakens the poor's incentive to work, and that it severs the essential moral ties between giver and receiver that exist in private charity.

Though de Tocqueville's work was written 175 years ago, it reads remarkably prescient today. Prior to the 1930's and the Great Depression, there was practically no expectation by an individual that "government" would step in to help if things got tough. The choices were simple: 1.) Pick yourself up, get a job and survive on your own. 2.) Rely on family to help you out 3.) Private and religious charities ran services for the poor. Either way, America had a culture of self-reliance, not a culture of entitlement. Today, it seems that many of America's urban poor believe that they do not have to work and that government will take care of them regardless of the poor choices they make.

One of the most egregious examples of people becoming dependent on government handouts is the department of Housing and Urban Development (HUD)'s Section 8 rental assistance program. In 1996, Section 8 made up 26 percent of HUD's budget. By 2004, it accounted for 55 percent, a growth rate of 18% a year!" Today, HUD subsidizes nearly 5 million housing units, of which 1.4 million are through section 8. If this trend continues unabated, HUD will very soon simply be an agency that only pays rent and will no longer have any resources to achieve its goal of making housing more affordable throughout the country.

So what can be done to reduce "entitlement" and dependence on government charity without giving up on the poor? The answer is simple, even if its implementation would be complex: We must require certain responsibilities in exchange for assistance. We simply must change the culture of entitlement to a culture of service.

Imagine how things might look different if anyone receiving a dollar from the government was required in turn, to give something back to society? In exchange for assistance during a tough time in one's life we could require a period of military or civil service. Need help with this month's rent? No longer can you rely on Section 8 for the rest of your life, instead you'll need to spend 15 hours a month volunteering as a local fire fighter. Need help with the groceries? Here are some foodstamps, and please sign up for your 10 hours of volunteer teacher's assistance.

We already have successful examples of incentive structures that work this way. The Army's GI bill grants money for college in exchange for military service. Why not extend this principle to many other forms of federal grants?

John F. Kennedy famously asked at the end of his inaugural address "Ask not what your country can do for you -- ask what you can do for your country." If we change the incentive structure of government transfer payments, we could achieve the dual goal of reducing dependence on transfer programs while at the same time creating more involvement within our communities. Why not change the system so that getting public money is no longer an entitlement? Why not demand that able-bodied people receiving assistance provide some assistance back to society?

Currently the only "price" associated with public assistance is the price paid by the taxpayer to fund it -- a price paid by fewer and fewer in order to support larger and larger groups of relatively unproductive citizens. By putting a price on this assistance directly to the recipient in the form of required service, we effectively shift the incentive structure and no longer provide "money for nothing." It is time to change our culture of "rights" and "entitlement" to a culture of "service" and "responsibility" and we will surely see the income gap shrink as more of society is welcomed into the ranks of the productive.