Welfare That Works

Conservatives love to talk about how inefficient the government welfare system is. If we were to take all the money spent on poverty eradication and simply give it to the poor, there wouldn't be any poor people. Liberals apparently agree, since they keep calling for new programs to help the poor; this is equivalent to admitting that the existing programs are not doing the job.

To some degree both sides are posturing using half-truths. The poverty line keeps moving, so comparing today and the years before welfare is not straightforward. Then again, the general level of prosperity is moving, so if the poor are not better off than before welfare, welfare is not doing the job. As for being able to “just give the money to the poor,” the poverty level is partly based upon the existing handouts and subsidized services; you have to be careful about double-counting. The amount of money to live comfortably might be higher if it were not for these programs. Then again, maybe not, since the poor do pay a fair amount of taxes for these programs.

However, there is a great deal of truth in the opening statements. The current welfare system is outrageously expensive, and we still have an unacceptably high level of poverty. A capitalist society becomes a rich society over time. Allowing poverty in the midst of such riches is unacceptable.

What follows is not a call for privatizing welfare. While government paid welfare is horribly inefficient compared to private charity, governments are able to raise tremendous amounts of money through taxation. Given the price of the current system, the idea of having private charities raise the needed money to replace the government system is scary at best, even after taking into account the relative efficiency of charity.

Fortunately, there is a huge amount of room for improvement in government run welfare even taking into account in inherent inefficiencies of government. What will follow is a discussion of the principles to be applied to make a better government run system, a system that greatly reduces the number of poor people and requires fewer tax dollars.


This is a touchy subject. In order to tackle the problem, I am going to have to say something to offend everyone. Please grit your teeth and keep reading when an alarm bell goes off in your mind. By the time you get to the end of this chapter, you will find much that you like.

Liberals: Yes, I will sound like Rush Limbaugh in a few spots. The Right has made some valid critiques of the current system, and I will address them. But keep reading, and you find some rather different solutions from the ones heard on most conservative talk radio programs.

Conservatives and Libertarians: No, I am not going to call for an end to all transfer programs, and you will find my solutions imperfect at best. But I will call for immediately getting the middle and upper classes off the dole – no more robbing Peter to pay Peter. I will also show how to end the “welfare trap” that increases poverty. What will follow is not the ultimate solution, but the next steps to reducing poverty and excess government. Maybe after these reforms are implemented, privatization will look more feasible. Only time will tell.