Why the Government Fails at Welfare

TDB's picture

Via The Daily Bell

The leviathan created by the modern welfare state is one of the gravest threats facing the American republican system. Dangers levied by the continued use of the government’s dole come both fiscally and socially. Fixes being floated from Congress to community organizations still lack a cohesive focus on reform in the mainstream public discourse.

The federal welfare apparatus has bloomed into a disastrous menagerie of nearly one hundred programs. Representative Warren Davidson (OH8-R) has introduced legislation that will consolidate 92 of the programs in an attempt to minimize waste and redundancy.  Davidson isn’t alone in his calls for welfare reform.  Other members of the House Freedom Caucus are publicly demanding that welfare reform be tied into the promised Trump tax reform package.

Even if House conservatives get their way, it’s not clear if the welfare model is sustainable. Stacked up against other industrialized countries, the U.S. clearly gets the worst bang for its buck.  In part, the reason for the failings comes from flawed designs for the American social safety net.

Governments on both sides of the Atlantic seem to be settled on the model of government intervention supporting those in need, but several Pacific Rim countries offer a different model based on social responsibility.

Pacific Rim Models

The tiny nation of Singapore has dazzled economists and pundits since it gained its independence from Great Britain. By embracing free market principles Singapore has raised its per capita income from $500 to over $52,000 in the short time it has been free of colonial shackles.

Even more exciting is the attitude the government takes on social welfare programming.  Since its inception, the state has taken a hard stance on handouts.  The government’s longtime approach has been underpinned by the idea that universal benefits are “wasteful and inequitable” and has chosen to base their safety net on social pressures. Singapore’s philosophy on welfare follows

Singapore’s philosophy on welfare follows three basic principles: each generation should pay its own way, each family should pay its own way, and each individual should pay his or her own way.   These aren’t just guidelines.  The legislators codified the importance of family reliance by enabling seniors to file litigation against their children if they refuse to support them.

In addition to heavy social pressures, the state also requires compulsory savings for retirement, housing, and other items deemed social necessities.  By requiring employers and employees to designate money for individual “rainy day funds” the government ensures that citizens have money when in need while simultaneously avoiding onerous taxes and bureaucracy that accompany the American and European models.  

Other Pacific Rim countries have also dabbled in alternative forms of social welfare.  Chile once instituted a meritocratic point based system which enabled those in lower income brackets to advance through subsidies offered by the state and was able toproduce better results than those in Europe and America.

Japan also has a history of creating social pressures to ensure the elderly and those in need are taken care of without government intervention.  Hong Kong, another of the Pacific’s shining societies has its own take on welfare in which increased productivity from workers equals increased benefits.

While those in Congress struggle to find the solution to America’s welfare woes it is important that they look not across the Atlantic to the failing welfare states of Europe for policy, but rather to the east and take note of the alternatives offered by market-based models.

States Rights

Instead of waiting on the national government to create a solution to one of America’s most pressing problems several states have taken the initiative and attempted to create a sustainable welfare model. By embracing the federalist model and utilizing the states as laboratories of democracy lawmakers can see what works and what doesn’t in real time. Already some states have produced promising results.

Legislators in Maine took a bold step in implementing conservative style welfare reform. Initiated by a Republican governor, Paul LePage, the reforms sought to address the growing number of welfare recipients in the state and the massive budgetary mess that came along with it. In Maine, able-bodied adults are required to work, train, or volunteer at least on a part-time basis to receive any government benefits.

The plan drew steep criticism from both the Obama administration and liberal media outlets as both claimed that the measure unfairly targeted the poor in a budget reducing measure and would create more harm to those in need. The results of Maine’s experiment, however, have proven quite the opposite. 

Maine has lowered its unemployment rate and has 10 times fewer residents on welfare. Even more exciting for Mainers, those who came off of welfare saw their incomes rise by an average of 114 percent. Proving that Maine’s results are not just a fluke, Kansas has implemented a similar program and has likewise alleviated a great deal of the state’s poverty.

Policy think tanks across the country have analyzed the finding of Maine’s experiment and have called on their state governments to follow suit. Some even heralded the program as a model for the nation. The problem facing many action oriented states come from restrictions put in place by the federal system. While the Republican lead welfare reform of the 90s did a great deal to push welfare to the state level, it also left a great deal to be desired.

To function as independent bodies, as the federal system intends, and better serve their most vulnerable citizens’ states ought to have greater freedom to experiment with welfare reforms.  Congress could act to give states a greater say in how welfare is implemented within their borders if reform is to be both helpful to those in need and sustainable.

Market-Charity

The government has a long history of implementing duplicative, ineffective policies and leaving communities to pick up the pieces. From the feds creating the modern ObamaCare healthcare debacle to city government literally stealing donations meant for children, every time the state attempts to intervene to solve a societal ailment it just makes it worse. Welfare is no different. Luckily for Americans, the government doesn’t control their fate, they do.

When looking to alleviate the suffering of their fellow citizens, Americans need only look inwards. American citizens are already the most charitable citizenry in the world, and keep giving more money every year. Moreover, private charity organizations, by and large, run much more efficiently and with substantially lower overhead.

Private groups are providing money, resources, and life-changing services better than the government is. Tired of seeing their impoverished neighbors get tossed around by the welfare system one group started an organization to successfully transition people off government support and into self-sufficiency. The core idea of such missions is to have neighbors helping their community members rise to their full potential and become productive by their own means. Of course, neighbors helping neighbors only works if there are opportunities available to them.

No government intervention or individual generosity can finally end poverty. The only force powerful enough to lift people out of the clutches of poverty is free market capitalism. Many who advocate for expanding the welfare state in its traditional form fail to realize the positive power markets can play in reducing poverty.

The wealthiest societies are not those which provide their citizens with cradle to grave care; it’s actually the complete opposite! The freer the society the easier it is for individuals to act and create wealth which in turn raises the standard of living. If allowed to thrive, market forces will create the greatest outcome to workers, companies, and those in need.

If the government is serious about helping the disadvantaged it should stop with the various welfare schemes, which inevitably fail, and get out of the way of the real engines of wealth creation. Neither the federal government nor any local authorities have the means to truly address poverty. Government fails; freedom works.

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dexter_morgan's picture

but...but...but, is you do that, won't the bureaucrats lose most of their power over us?

Kprime's picture

If you cancelled the entire welfare system the money saved would not pay for one day of the money the US spends killing citizens in foreign countries.  It would barely pay for the money the US gov spends incarcerating folks for smoking cigarettes with a slightly different tobacco.  The welfare debate is a sham to direct your attention from the trillions handed out to the financial system with one hand and taking kickbacks with the other hand.  It's a fraud to direct your attention from the trillions the .gov prints and borrows to put into it's own pocket and the pockets of the 1% while they have been busy making debt slaves of an entire generation.  What a crock.

quesnay's picture

While military spending is at insane levels, I don't think your math is even close to right.

https://media.nationalpriorities.org/uploads/total_spending_pie%2C__2015...

Plus you focused only on federal spending. There is no spending on the military at the state or municiple level, but there are plenty of assistance programs.

halfasleep's picture

While those figures may not be correct, your sentiment is spot on, i upped you. Why don't we stop wasting money bombing countries that didn't bomb us and jailing people who didn't do anything before worrying about whether or not social services are inefficient?

Xena fobe's picture

I would like to see some real proposals with supporting data. High priorities need to be no public assistance for anyone not a natural born citizen, no assistance for anchor babies, no assistance for children born to single parents.  These have become huge scams. 

For the rest, they can replace government employees in exchange for benefits. That kills two birds with one stone. Any need. Left after that, tax wealth to fund it, not income.

Charity is not a reliable source of funding. 

quesnay's picture

"Charity is not a reliable source of funding."

It is the only moral source of funding. All other funding is theft at the end of a gun.

Welfare and government create a feedback loop of destruction.

1.) Politician gets elected by offering 'more benefits'.
2.) Number of people receiving benefits grows, increasing their political clout as a group to pressure politicians to offer more benefits.

Repeat. We can see the final result in places like Venezuela.

Reaper's picture

"What happens when social workers end poverty?" Feigned compassion is an unmarketable skill.

tangent's picture

Are you fucking kidding me? An article reviewing the efficy of dropping food stamps does not check to see if people are going hungry? What a joke. I have an idea. Lets review whether or not food stamps are needed but not bother finding out who is going hungry and who isn't. Wow.

"able-bodied adults are required to work, train, or volunteer at least on a part-time basis to receive any government benefits" Okay, and I personally know someone who actually goes hungry on a regular basis who is illegible for food stamps. Whatever the reason it certainly isn't due to too much income. So, it seems that since food stamps dropped 90% in Maine, the number of people going hungry could have increased by over 500%. But this article makes zero attempt to find out if people are starving in Maine.

By virtue of the fact "you have a job and work on a part-time basis" you don't need food stamps. Duh, so Maine has set up their program so that by definition, the only people who may have foodstamps are people who cannot possibly need them unless they are spending all their money on drugs. If they are spending all their money on drugs, then by definition they need food stamps because if you look at those meth people you know they need more food. In theory they could trade some food stamps for meth but that is probably rare.

Basic common sense says that if you don't need government food welfare, you don't need ANY government spending at all as food is the most important need. A person without food doesn't need defending as they will be dead in short order, so obviously having a national defense is useless if you have no food.

I would go on to write a 10 page report on how stupid article is, but I'll just stop here in saying that of the $2+ trillion budget the $75 billion program is possibly the least wasteful.

Xena fobe's picture

Not a serious article for sure. But these benefits are used to justify high taxes on the middle class who are barely surviving themselves.  This is dragging the middle class down into poverty too.  I can attest to that personally.  In my area, welfare takers are better off financially then poor and middle class workers.

milo_hoffman's picture

Remember kids:

Socialism is NOT spreading the wealth, Socialism is for spreading the poverty.

NickPeeMe's picture

It is not about helping the disadvantaged. It is about helping the richest folks and the governments are doing swimmingly well at helping them. They have more than doubled there multi billion dollar nest eggs in the last decade. All thanks to Welfare that got strategically mislabeled as a bailout. Thanks to a population that thinks welfare is some lazy black person that gets a free PBJ sandwich and makes sure that doesn't happen anymore, While bankers gamble on whatever they want no fears as taxpayers will cover any loses. A population so dumb down they think Trump is their savior instead of the welfare queen he really is. Trump is Hillary with a Vagina.

tangent's picture

Most welfare is for the rich. School welfare is for the middle class. And Republicans cannot stand the fact that there is welfare specifcially for the poor. It really irks them in a bad way. Trump SAYS he won't subsidize wealthy Japan and wealthy South Korea military, but he is doing exactly that.

Xena fobe's picture

But it has become a huge business/scam.  I too could write pages on how the system is gamed.  It also ultimately benefits the wealthy.  Think about it.  Poor taxed workers subsidize other poor workers to enable the wealthy to keep wages low.

Vimes's picture

I agree with you, it is an  unstoppable business scam. It helps them export jobs and make the employed pay for it too.

OutWithLibs's picture

"If the government is serious about helping the disadvantaged..."
They're not...that's the point. The more lazy, unappreciative, money-sucking doles that are on the system, the more control the gubment has over them. That's the Dem way...

overmedicatedundersexed's picture

this is  a .gov success..why we got more poverty every year, we are moving middle class into the chronic poor in ever increasing numbers ..making .gov larger and larger to "care for them"...I am sorry so many think it is the War on Poverity, no it is the war to make poverty a right.

Kprime's picture

it's actually just a war to make poverty as widespread as possible.

strickler's picture

My problem with charity is that I can't tell who is truly deserving and who is just working the system, and neither can the government.

Bemused Observer's picture

Ahhh, that's right. And you're not supposed to. You are supposed to be charitable to 'the poor', but can't ascertain, to your satisfaction, just WHO these 'poor' really are...but there IS a solution...

 

Just be charitable, period, and leave the sorting and judging to God. Then you won't be tormented by the possibility that your charity has fallen into 'unworthy' hands...Just tend to your OWN obligations, and never mind worrying over someone else's possible 'undeserving' state. That's the best and fastest path to a properly functioning society. Take care of your own shit and leave God's job to God. See to the mote in your own eye first.

 

As an imperfect fellow human, you can't 'be God', and know what is in a man's heart, it's not possible. Beyond your pay grade, so to speak. And if you are waiting for that certainty before you extend your charity, then you will never, ever do so. You will be like the picky, fussy bitch who finds fault with every single guy she meets, and so never has a relationship, never gets married or has kids, and dies bitter and alone...this is the point made in the Bible over and over and over again. YOU are supposed to be charitable, so be charitable. If the recipient of your charity is truly not worthy, let that be on HIM...your 'good work' is not negated by his bad attitude. If you see an obvious issue, speak up, otherwise leave it alone. Because as 'sure' as you are, you may well be totally wrong about the person, and their situation. And if THAT'S the case, then you have just done deliberate evil to an innocent person, which opens a whole new can of worms for you...best just to leave these things to God.  When it's your turn to be on the hotseat for something, then God will be as merciful to you as you've been to others. Otherwise, if you want the LAW, then you'll have the LAW, and can yourself be judged by the LAW when it's your time, and LAW forgives no one, ALL are found wanting. Think of our human law, where anyone can be charged with multiple felonies a day, entrapped and railroaded right into prison for violating any of a thousand obscure 'codes' and rules...imagine if the Biblical heaven was real, and run like that...all the sinners huddled with their fucking LAWYERS...

The principle of 'innocent until proven guilty' in our law is similar...until you have hard evidence of wrongdoing, you are not to assume guilt, and not to 'sift and sort' your neighbor's heart, looking for fault. Because we ALL fall short of the standard, there isn't a one of us who would 'deserve' a god-damned thing if we were all held to the same standards we insist others live up to. And if God had the same attitude towards us that we have towards each other, then no human at all would be saved...at some point, the 'perfect' must cut the 'imperfect' some slack, or destroy it outright, hence God's mercy to we sinners, and hence God's instruction that we be merciful to one another.

 

I'm no Bible-thumper by any means, but these old religious and moral texts really give you an idea of some very basic problems we humans have to deal with, some faults and tendencies that will end up derailing any progress we make if we don't get them under control. And those long dead authors were really pretty smart and observant...they nailed just about all of them. Even today, it is easy to make the connections between some modern crime, and a Biblical parallel, and see that today's crime is just a replay of that old story, without the goats and sandals...there's nothing new under the sun after all.

Carpe Tutti Bastardi's picture

"and neither can the government". Do What? Tell who is truly deserving of private charity or working the system? which should not be its (the 'government') responsibility or judication.And yes, if you paid attention you could define which charities are most beneficial and cost effective; or that truly meet your desired charitable intentions. For instance, I long ago stopped donating to a questionable 'charity' when it was reported that they spent more money on the administrations office embellishments and salary's than was used for their so called charity. You just have to find out what portion of the contributions go to charitable causes and what portion goes to 'upkeep'.

thedespised's picture

how can you tell the truth in a world of lies? I'd love to know, cause last I checked our NGOs were killing and raping children, so I'd really love a good look at the charity in detail before sending anything you should too.

milo_hoffman's picture

Anyone who thinks the heartless compassionless bureaucratic government who treats EVERYONE like a freaking number, and filled out request form and can't make an independent decision based on real need instead of 'rules' is better than REAL private charity is just in denial of reality.

Getting assistance from the government is DEHUMANIZING.

+ Government has no heart

+ Government has no compassion

+ Government does not help someone based on their individual need

+ Government does not care

+ Government does not bend the rules to the situation to help someone

+ Government does not dynamically find solutions to problems but can only blindly follow rules, laws and work within their boundaries

+ Government does not hug you when they give you your check

+ Government does not wish you the best

+ Government does not love

+ Government does not want you to get better

+ Government does not stay late and talk to you about your problems

+ Government does not see the big picture

+ Government does not care if you REALLY need the help or if you would be taking away from those that really do need it...as long as you meet their quotas

+ Government does not care if its doing the 'right thing'.

+ Government does not care how this happened and keep it from happening again

Getting help from your neighbor and caring charities helps, strengthens character, builds communities and heals.

If you really want an education read this heart-wrenching book by a former welfare mother that documents how government is NEVER EVER EVER the solution to providing charity: http://www.amazon.com/Tyranny-Kindness-Dismantling-Welfare-Poverty/dp/08...

When George Washington warned that "government is not reason, it is not eloquence--it is force," he was making an important distinction. Government relies on force and coercion to achieve its objectives, including charity. In contrast, the civil society relies on persuasion--reason and eloquence--to motivate voluntary giving. In the civil society people give because they are committed to helping, because they believe in what they are doing.

Thus private charity is ennobling of everyone involved, both those who give and those who receive. Government welfare is ennobling of no one. Alexis de Tocqueville recognized that 150 years ago. Calling for the abolition of public relief, Tocqueville lauded private charity for establishing a "moral tie" between giver and receiver. In contrast, impersonal government relief destroys any sense of morality. The donor (read taxpayer) resents his involuntary contribution, while the recipient feels no gratitude for what he receives and inevitably believes that what he receives is insufficient.

Consider this simple thought experiment: If you had $10,000 available that you wanted to use to help the poor right now, would you give it to the government to help fund welfare or would you donate it to the private charity of your choice? Which do you think will do a better job?

Centerist's picture

Thank you for a well-stated position and for further elaborating on the main theme of this article.  You put one piece into your post that I think best exemplifies what is wrong with the modern welfare system"

"Calling for the abolition of public relief, Tocqueville lauded private charity for establishing a "moral tie" between giver and receiver. In contrast, impersonal government relief destroys any sense of morality. The donor (read taxpayer) resents his involuntary contribution, while the recipient feels no gratitude for what he receives and inevitably believes that what he receives is insufficient."

You, my friend, captured the most salient point of the matter.  If people had to go, hat in hand, to family or friends to politely ask for assistance during times of need, they would much more appreciate that assistance, and they would avoid having to ask for it, again, as much as possible.  Very few would be likely to want to spend their entire lives living off of increasingly resentful friends and neighbors, and those friends and neighbors would, at some point, cut them off if they tried.

Government welfare takes all of that out of the equation.  A faceless bureaucrat doesn't care if a recipient has been on the dole for his or her entire life, and the recipient only sees a bureaucrat who doesn't care when he goes in for his draw.  There is no shame, and there is no gratitude.  There is only a system that is their to be milked for all it is worth.

LyLo's picture

Nailed the crux of the problem: ingratitude.  I know a lot of these people, and that word sums up their entire existence: I could list story after story after story.  Thank you both for articulating it so well, which helps crystallize thinking on the issue.

I spend a great deal of time regretting that the world has given me more than I'll ever be able to return, and I suspect that deep seated love and gratitude for the universe to never really abate: it guides a lot of my actions and thinking.  I'm not really sure how people operate otherwise, but it must be a really sad and lonely place to be.  (Ugh.  I'm sorry.  That was gross and hippy-like, but I can't word it better without sounding like a straight up voodoo crystal douchebag.  Seriously: gonna go take a shower now.  Then going to demonstrate my gratitude in my own little ways.)

Centerist's picture

There is nothing hippy-ish about gratitude.  Being thankful is simply having a healthy perspective on things.  It is also noble in that it demonstrates a true understanding of the value that you and others contribute, respectively, and an understanding of value in that sense is what makes people appreciate what they get from others and makes them want to reciprocate.