Free childcare as a Ponzi scheme

By Phil Lawler ( bio - articles - email ) | Mar 17, 2023

In the UK, Chancellor Jeremy Hunt has proposed that the government should subsidize free daycare for all children nine months old or older. Hunt argues that this measure, expensive as would be, would actually ease pressures on the government’s budget, because more parents (mothers, mostly) would be able to join the workforce, and therefore to pay taxes.

Michael Deacon of the Daily Telegraph recognizes this proposal for what it is: a Ponzi scheme. The parents who take new jobs will earn more income, and their taxes will help subsidize the childcare for other parents, who in turn will grow rich and pay taxes, and…

… what about the children?

A London Times editorial applauded the chancellor’s initiative, complimenting Hunt on the “straightforward” logic of his proposal:

… affordable childcare makes it easier for parents, particularly mothers, to return to work, in turn boosting GDP and sparing the state from additional spending on other handouts.

Yes, Hunt’s idea, if it is adopted, would unquestionably raise the country’s GDP; the economic statistics would look rosier. But would the people actually be better off? Michael Deacon calls attention to what is missing here:

Somewhere along the line, without even seeming to notice, we replaced the traditional family with a giant national Ponzi scheme, which dictates that, instead of raising their children, all parents must work—so that they can afford to pay someone else to raise their children for them.

Deacon writes that “most mothers would rather be at home with their babies and toddlers, if they could only afford it.” But the government isn’t likely to subsidize them to stay at home—even though one study after another demonstrates that this would be the best guarantee of the children’s welfare, and the government’s outlay would not come close to the cost of professional child care. Deacon explains:

Of course, we know why the Government won’t do that. It doesn’t want mothers staying at home, caring for their children. It wants them all rushing back to work, for the sake of the economy.

Did you catch the curious logic of the Times editorial, which said that free childcare would spare the government from “additional spending on other handouts?” The suggestion is that many stay-at-home mothers are forced to rely on the government to support their households. Instead, this proposal would force those mothers to rely on the government to care for their children. How is that an improvement?

Writing in the Catholic Herald, Laura Perrins recognizes the Hunt proposal as the logical outgrowth of a way of thinking that has come to dominate our society. This, she writes, “is the end of an era, an era when babies went from being valued, to being seen as barriers to work.”

Yes, and to work for whom? In earlier days it was understood that the wage-earner—the father, typically—went to work to provide for his family. Now the mother is expected to work as well, so that someone else, paid by the government, can care for her family. She could care for the children herself, but then she might need government help. Yet the government is helping her by providing daycare. So what is the difference, really? The difference is that she works outside the home.

The mothers who join the workforce under Hunt’s proposal will gain income, since they have not been wining wages for their work in the home. (The newly hired daycare workers will also gain wage income. It looks like a win-win—which is one warning sign of a Ponzi scheme.) But what is the purpose of gaining income, if not to improve one’s quality of life? We already know that for children, quality of life (not to mention future prospects, including prospects for gainful employment) is best served by having the mother at home. But what about the mother herself? Laura Perrins makes the point:

Society accepted that women were indispensable as culture makers in the home and unique to their children. Once mothers enter the workplace, they are both dispensable and interchangeable.

Free childcare—in the US as in the UK—has been promoted as a boon for women and a boost for the economy. It is neither. It’s a Ponzi scheme.