Are Welfare Programs Worth What They Cost?
By Randall Holcombe • Wednesday October 31, 2012 3:14 PM PDT • 7 Comments
In 2011, 14.6% of households in the United States were below the poverty line, according to these statistics. That represents 16.8 million households. That same year, the federal government spent $746 billion on means-tested welfare programs, according to this report recently released by the Congressional Research Service. If that money were divided up and given to those families below the poverty line, each family would receive $44,405, enough to put them well above the poverty line.
That $746 billion includes only federal government means-tested programs, so does not include Social Security and Medicare, the nation’s two largest redistribution programs. It also does not include veterans benefits, even when those benefits are means-tested. This is money that is specifically targeted to the needy.
That $746 billion does not include any state or local government spending; only federal spending. State and local government spending on Medicaid alone totaled $166 billion in 2011. If that were added to federal means-tested welfare programs and also divided among families below the poverty line, each family could receive $54,286 a year.
In 1970 the percentage of families below the poverty line was 10.9%, well below what it is today, according to Table 5 here. The poverty problem is worse today than at the early stages of the War on Poverty. According to the government’s own statistics, welfare programs do not reduce poverty. We are spending enough on means-tested welfare programs to lift all poor households in the United States well above the poverty line; yet poverty remains.
Welfare programs may have been designed with good intentions, but more than four decades after initiating a War on Poverty, those programs should be judged on their results, not on their intentions.
Tags: Budget and Tax Policy, Economics, Medicaid, Politics, Poverty, The State, Welfare 
Are Welfare Programs worth what they cost? The cost doesn’t matter to the people receiving the checks or to the politicians who buy votes with those same checks. Its sort of a symbiotic relationship between a parasite and a politician with the productive taxpayer as the host.
libertarian jerry | Nov 2, 2012 | Reply
From the above, it appears as if about half the money in total went to “administrations”, not to those in need. We forget that many government programs have large “administrative costs”, resulting in about half of the taxpayer’s money (this is really “where” the money came from) ends up elsewhere than where we’d prefer it to go. On the other hand, the same amount of money remaining in the pockets of the taxpayers might be better spent in the hands of the taxpayers by creating jobs and employment for those in need.
Jerome Bigge | Nov 5, 2012 | Reply
I think you’re on the right track, libertarian jerry, but we need a concise definition of the word, “Worth”, to understand the question posed by Randall Halcombe. However, I think that the essay is basically misguided rhetoric to which leftists are too immature to respond correctly. So assessing the question in light of the definition may not be worth the effort. In fact, they will conclude that more efficient administration is a correct response.
Also, have you ever noticed how little the caring community is interested in bearing most or all of the burdens implied by their alleged caring? Oh, sure, they scream loudly and repeatedly for redistribution by government (and for the rigging of commerce, too, to benefit the needy), but they always scream for the government to distribute widely the burden of their alleged caring. This trick protects the symbiosis from immune system response. Their MO is to set up particular programs that concentrate benefits in motivated special interest groups but distribute widely the costs. Particles of the immune system conclude that the benefits of opposing the disease do not justify the costs of doing so.
It would seem also that most of our do-gooders are oily cowards and that few are as courageous as a looter named Robin Hood or as Robin’s merry men. Remember this when dealing with the do-gooders in a manner that inspires them to call the police, for the cops will be expected to do some of the dirty work that most of them are [ahem] reluctant to do on their own. Later a judge will do more of their dirty work.
Now, if you have or have had any wealthy welfare statists as friends or acquaintances, you may have noticed something peculiar about their eagerness for higher taxes. They rarely explain well why the higher taxes will not force them to reduce their charitable giving. Yet should not higher taxes force them to do so? Don’t the caring tax ideologues already care so much before the imposition of higher taxes that they are giving to the needy as much as they, the wealthy bleeding hearts, can bear to give? In fact, before the tax increase, they’ve already cut the fat out of their lifestyles such that there’s no inappropriate sybarism on their part, right? When the tax increase comes, the bleeding hearts merely change the name of the people and the organizations whom their checks order their banks to pay, right? But the amount stays about the same, at least as a percentage of the bleeding hearts’ wealth, right?
For some good reason I am reminded of sailing on Lake Michigan in August of 2008. The boat’s skipper, my roommate’s girlfriend, was swooning for Obama and all the good things he would do for the needy with other people’s stuff. I hasten to add that the boat was a mere Island Packet 38 made ca. 1991. It was purchased used by the daddy of the skipper and given to her, a lawyer who was then making in the low to mid six figures. I think it was earlier that year that she’d been to Antarctica to mingle with the penguins. A few years later she was married in France and held the reception at a pleasant chateau in the homeland of her beau.
Paul T | Nov 7, 2012 | Reply
NOTE: The Table 5 reference [census data] to historical data from 1970 is invalid; as the 1970 row in this table has nothing in it...
Tim | Nov 14, 2012 | Reply