We Need to Look at All Sides of Welfare Programs

          Nancy and I worship in an inner-city church in Cleveland, Ohio. The church is in one of the worst slum districts of the city. It is attended by drunks, drug addicts, homeless people, and vagrants. Last week a man in that church was interviewed about his financial income. He is receiving food stamps, unemployment insurance, Medicaid, and, perhaps, other forms of government welfare. He was asked where the money for these programs is coming from. He immediately said, “From the government.” He actually believes that the government is the source of his income.

          What the man does not realize is that the government does not produce one dollar of the money it redistributes to the poor. Every bit of that money comes from others who work to produce it and who pay the taxes to allow the government to distribute it to the poor.

          In order to understand the effects of government welfare programs, one must realize that there are always two parts to welfare redistribution programs—there is the visible part and the invisible part. The visible part is far more obvious than the invisible. In this man’s case, the visible part is the man who now has food to eat, a roof over his head, and medical care when he needs it. These are things that everyone can obviously see are quite beneficial. Who would not like to see all these ends accomplished?

          The invisible parts are not nearly so obvious. These invisible parts include the fact that when money is taxed away from the population at large, the taxpayers no longer have money for business improvements, for infrastructure, and for investment in projects that produce jobs. They cannot put that money back into the economy to work efficiently so as to multiply itself by real stimulation of the economy. That money that is no longer in the hands of entrepreneurs who can use it to create the jobs and the sense of self-accomplishment that the poor man badly needs if he would work for it, himself. Real production of real goods and services that can only be obtained by investment in the private economy is delayed or prevented from doing so by the visibly desirable effects of immediately available beneficial results on the poor. Government welfare programs effectively transfers money out of the hands of those who know how to increase wealth and puts it into the hands of those who do not know how to increase wealth. In the long run, this decreases the effectiveness of money that might be used to create jobs. Both the rich and the poor suffer from that effect.

          No thinking, compassionate, person would object to a reasonable government redistribution policy if it were not so extremely large and completely out of hand as it is today. At this time, the total amount of federal and state welfare spending is $10,000 for every man, woman, and child in this nation. That does not include the cost of enhanced welfare payments that does not require the government to tax and spend on the welfare programs, themselves. That is, this amount does not include the amount of money transferred to the poor by direct contributions required of business, e.g., minimum wages, maximum hours and mandatory benefits for employees, and rent control for tenants. (Imprimis October 2014)

The most insidious effect of these government give-away programs is that they leave the poor just as poor in the end as they were at the beginning. They leach away self-respect by making the poor man ever more dependent on more and more government give-away programs.

          Fortunately for the man with whom I spoke, another member of our church has taken him under his arm, so to speak, and provided him with money to pay for attendance at a local trade school in which he is learning skills necessary to become a diesel mechanic.  That is REAL charity. That kind of charity will probably make the man independent and finally allow him to become a self-supporting, independent, and happier man. Unfortunately, there are reasons why many of the church members do not or cannot realize the benefits of getting off government welfare programs any time soon. But…the government’s current policies do not seem likely to encourage many of today’s poor to raise themselves up out of the gutters of despondency and dependency to really make them self-respecting members of society. We need a smaller safety-net program for the truly disadvantaged and disenfranchised citizen.