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What's wrong is creating an artificial system where X and Y effort both result in the same living condition, but X is much lower than Y but Y will result in increased living condition over time. X is welfare. Y is employment. Get it?
You just said that humans are inherently greedy. If X and Y have the same bare standard of living at the lower rungs, but Y has the opportunity to do way, way way better by working harder/smart/faster/getting lucky, then we can't we raise the bare minimum for X so we don't have people dying of starvation or preventable diseases and making things more difficult for the Ys?
I was in an X situation. I derped around around played homemaker, and wrote a novel for the lulz that didn't sell, while my husband did the hard work. Then I realized I missed having money for shiny new computer toys. So I got off my lazy bum, got a master's degree, and started working first part time, then full time again. Now I have all the money I could want for shiny new computer toys.
The bare minimum is a roof over your head, basic utilities (power, water, phone, and these days Internet), adequate clothing, food enough not to starve or die of nutrition deficiency diseases (e.g. scurvy or rickets), basic healthcare (plastic surgery or fertility treatments don't count) and if you do have a job, some means of transportation.
I don't think denying people those basic things because they are "lazy" is morally correct for society. Not everyone has the intellectual capacity or physical stamina for work. Children, the elderly, and the disabled should be guaranteed the basics. Nobody should starve, die of exposure, or get sepsis from a tooth infection in "the greatest nation in the world."
Those adults who
do have the intellectual capacity - and the inherent greed that comes with it - will do whatever they can to go beyond the basics until they've achieved whatever level of income matches their personal greed.