Before I respond to you Glum, I do want to let you know that it is kind of frowned upon to quote an entire post when you're responding to me -- all it creates is more of an annoyance when people are reading through responses. I know you're new to the forum, so this is just for next time and so you don't bother anyone!
But onto the topic here
It seems like a no brainer that it's better to "stay down" sometimes.
This is exactly what the current welfare system does, it makes people stay below some limits -- sometimes these limits are income related, but they are sometimes based on marital status and so on. -- in order to retain their valuable benefits. This sort of system, in my opinion, is un-American.
This will make society more productive as a whole.
Exactly. I think that these limits do nothing but make people double think working hard if you remove these limits and just give EVERYONE benefits -- then you're going to enter a world which is more productive as they have the reason to be more productive. As they're not going to lose out if they attempt to progress.