I agree that there is real moral hazard to "incentivising" having babies. However, if we didn't provide for the mom, then these kids are screwed. If our society can help, should we? Perhaps we should just have everyone on welfare with children annually revisited to make sure they are taking care of the necessities of thier child/ren, or else the child is placed in foster care.
The two biggest problems I see with fixing the system are causing issues for the innocent kids, and too much of "big brother" stepping in to determine how one raises thier children. (Then again, if you're getting helped by the government, having to abide by gov guidelines isn't too bad.)

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