> Perhaps caring for your own kids produces much better kids (and eventually, adults). And that may be more of a benefit to society than a large number of people being incentivized to create large number of kids whose care is just outsourced to childcare centers where they receive less attention.

We're not talking about some vague value to society of kids. We're talking about the concrete value of the service being provided - an adult physically present in the vicinity of children to take care of issues, freeing up adults for other, more productive utilizations of their time. A stay at home parent who looks after only their own children does not free up any adults.

> Is this really an argument for anything? One could just say “if you want to raise kids you can’t afford, do it on your own dime” and undermine your perspective.

That doesn't undermine my perspective at all. Again the argument is that division of labor is more efficient. It costs society less to have one person raise multiple kids than it does for lots of people to raise their own kids. Even if you say only those who could afford to stay at home and raise their kids should have kids, they should still be utilizing this system to reduce total cost. If they choose not to participate in the cost reduction, they ought to shoulder the burden of the higher costs on their own. Recognizing that society kind of needs kids for the whole survival of the species thing, selfish actions that reduce cost savings for everyone ought not to be incentivized.

If you're trying to be efficient, you could also put 100 kids in a room with an adult to do whatever as long as the adult can keep them alive, but most people would recognize that the services are not equivalent. It's not more efficient; it's lower quality.