This was an answer to an anti-welfare post on another site which I wrote a day or two ago. Slightly edited for context.
I think to a certain extent the case against welfare is a bit simplistic. If the question is: “Welfare: yes or no” I think the question can be answered by what a debater would call a “negative repairs” case, in this case meaning that refining the welfare system makes more sense than trashing it, and trashing it could have a lot of expensive consequences such as more people getting their income from crime and more expense to us if we catch and imprison them. There are reforms we need, such as finding work for the able bodied even if the government makes such work and not penalizing people on welfare who get ill-paying jobs by deducting their pay from their welfare checks, thereby removing their incentive to work. You get what you incentivize.
Also, the common idea that some of the money “disappears” makes no sense, only that one might lose track of where it went. The thing about Welfare is by the nature of the recipient population no recipient can afford to do anything with that money other than spending it. Spending it is a private sector function. The poorer one is, the faster they have to spend what they get or earn. It is tax breaks to the wealthy where money “disappears” because they save a lot of it, often in offshore accounts where it sure as Hell doesn’t do the country any good. Spent money creates jobs, reducing the need for welfare and increasing the number of taxpayers, making welfare and everything else easier to afford, and increasing the number and size of customers.
The worst financial problem we have here is all that unproductive money in the hands of the very wealthy at the same time that the current powers that be, emphatically including the President, have been exacerbating the problem and trying to exacerbate it more. If nothing else, government has proven to be more effective at redistributing money than the private sector has. When economies are left very free market, like 1900 America or immediately post-Soviet Russia, money tends to concentrate.
Right now, it’s way too concentrated to optimize the economic performance of this country. You can look around the world and find consistently that the healthiest countries have healthy middle classes because any economy depends on a lot of people spending steadily - that’s what keeps businesses open and prospering. Our middle class now has hardly any of our money, and forget about our poor. The wealthiest 40% of the population has over 95% of our wealth. The poorest 40% has 1/3 of 1% of our wealth. How can you look at those numbers and conclude that our problem is how much money the government is giving to a population more like the poorest 20% of our population, which incidentally collectively has 1/10 of 1% of our wealth, or 1/1000 of our wealth for 1/5 of our population?
This concern is so upside down. From an economic standpoint, our biggest problem is not the undeserving poor or even government, because everything government spends ends up in the private sector; it’s the undeserving rich. Our inheritance taxes, which need to be increased substantially, are under attack for existing. An inheritance tax free Eric Trump would do more damage to our economy by himself than a big proportion of the welfare recipient population.
Why are you so much more offended by the undeserving poor than by the undeserving rich? At least the undeserving poor have genuine needs while the undeserving rich are doing so much more damage to our economy. Yeah, I see the lip service - “I care about abuse both ways” - but the arguments mostly go one way, treating the government giving more money to the poor as our biggest problem.
Please. Money going to a population worth 1/1000 of our money is not our biggest problem. And that assumes that 20% of America’s population is on public assistance. But even if it’s higher than that, if we double the population to the poorest 40%, we’re still only talking about 3/1000 of our money. Get real. Somewhere along the line, we should be paying less attention to those stealing pennies than those stealing houses.
By the way, as a liberal Democrat, those who fault President Obama with going along with this are right. His refusal to prosecute in the aftermath of the mortgage crisis was criminal, so this behavior clearly isn’t limited to Republicans.
Please stop reacting so viscerally to what bothers you philosophically and follow the money. This is the flip side of bleeding heart liberalism: conservativism that is emotionally blinded by anger at the undeserving poor, more willing to spend $10 to imprison someone than 1$ to help them.