The Problems with Public Welfare
NOVEMBER 01, 1979 by KENNETH L GENTRY JR.
The Reverend Mr. Gentry is the pastor of Midway Presbyterian Church, Jonesboro, Tennessee.
Americans have long been known to be a charitable people. Unfortunately, government intervention could be changing that. The government has entered and gained monopolistic ascendancy in this field as in so many others. Being charitable makes it a bit difficult for us to speak out against public welfarism, lest we appear to be unconcerned for the needs of the poor. However, there are numerous compelling reasons why we can legitimately decry public welfarism and still maintain—even emphasize—our concern for the less fortunate in our society.
1. Public welfare destroys the personal relationship and interaction which can be achieved through private, local charity. Big government is faceless and cannot express truly empathetic concern for the needy. The human element so essential to aid the poor is sacrificed to computerization.
2. It actually destroys a true sense of genuine charity among the general populace. Charity today is coercively maintained. How many times have you heard complaints about excessive taxation? And what accounts for a very large percentage of our national debt? I used to work in a grocery store and constantly overheard grumbling from the shoppers who were having to pinch their pennies when they observed a heavily loaded shopping cart of choice items being paid for with food stamps. Not only are ill feelings fostered but also there is provided an excuse to shift responsibility when private charities appeal for funds:
"The government has the resources. They will handle the situation."
3. It destroys, through excessive taxation, the capacity of private citizens and organizations to help. Personal income is eroded through redistributive tax schemes, thus leaving fewer funds for personal charity. Remember the recent uproar over the enormous increase in the Social Security tax? There goes some more money that could have been available for private charity.
4. It undermines personal responsibility and incentive in the poor to help themselves. Welfare funds are addictive. Withdrawal is hard.
5. It promotes a false sense of security among the needy. "The government will always be there to take care of me." "My Social Security will always be available to help me financially." According to the Federal Statement of Liabilities issued by the Treasury Department, the Social Security program has about $4 trillion in unfunded obligations! That’s security?
6. It promotes a false sense of equality among minorities. They can either be led to believe they are getting their "fair share" or that they are receiving "remuneration" for past offenses against them. Dependency does not promote equality.
7. It is less efficient than private charity. Private, local charity is true charity: it is voluntary and it is not subject to the bureaucratic filtering process. I have never heard the government or any of its programs praised for efficiency—except by the government and those who head the programs!
8. It promotes conflict among groups clamoring to get their hands on the handouts. Though theoretically (in a Keynesian economic system) fiat money could supply everyone with plenty of money, actually there is at least some restraint upon the government’s printing press (thank goodness for election years!). There is never enough money to make everyone happy; therefore, groups fight to get to the front of the line.
9. It can and often does encourage immorality. The government does not have the same degree of religious and moral sensitivity that can characterize private charities. Illegitimate children are one way to gain additional welfare funds. Or if you decide against illegitimacy, in most cases you can get a "free" abortion. Urban renewal programs have long been derided as consistently producing drug culture, crime infestation areas, and family disruption.
10. It is more open to fraud and criminal abuse than smaller, more easily contained, private charity programs. Newspapers are filled with reports of welfare abuse by criminal elements. This serves as an additional "tax" on the truly needy themselves: scarce resources are filtered away from their target.
11. It destroys the incentive to produce among the heavily taxed middle class. Success seems to be subject to undue fines (increased taxation).
12. It represents a large percentage of the federal debt that is monetized in the process of inflation. Price inflation erodes the wealth of the nation and will eventually break the back of the economy. I recall in our local newspaper an interesting—but not surprising—article on the economic plight of our area hospital. This plight was caused by governmental regulations related to welfare. It noted that Memorial Hospital gave "free" medical care valued at $1.2 million in 1973-74, $2.5 million in 1974-75, $4.1 million in 1975-76, and $4.5 million in 1977. The assistant administrator reported that "paying patient charges could be reduced by $50 a day if the hospital did not have to provide free care." There go more funds that could have been tapped for voluntary charity!
13. It is ironic that the expansionistic monetary policies of the government which are partly necessitated by welfare programs are not only hurting the general well-being of the nation at large but are especially hurtful to those on fixed incomes: the welfare recipients for whom we inflate in order to aid! The government is sadistic: it whips hardest the very people it supposedly wants to help.
14. It coerces medical personnel to give out "free" services as mentioned above. This not only raises prices for the non-welfare populace, but when medical programs are further expanded they cause medical shortages. England’s socialized medicine is a case in point: England suffers from a doctor drain (they can live better elsewhere), over-crowded hospitals (free hospital care encourages hospitalization for light cause), increasingly inadequate medical attention (fewer doctors are serving larger crowds), and so on.
15. It increases statist power. That which controls your property and wealth controls you. A bigger government is more unmanageable, more susceptible to totalitarianism and tyranny. Thus, it aids and abets the erosion of liberty. Higher taxes cut down on what we are able to do, increased regulations (concocted by a powerful state) limit what we are allowed to do.
16. It unmasks "blind" justice. It coercively redistributes the wealth from some in order to favor others—all in the name of social "justice"! Discriminating justice is mandatory injustice.
17. It encourages an increased ignorance in one of the most important areas of life in our population: economics. "Free" programs imply that wealth is "just there," profits are evil, shortages are contrived, lunches can be free. Our population already suffers a woeful ignorance of economic theory, without interventionist politics setting a bad example.
Yet despite these problems and others that could easily be multiplied, there are certain functions which government could properly perform to care for the needy.
First, the central feature of the government is power. The purpose of this power is to insure the law and order necessary for economic stability and growth. As F. A. Hayek has written in The Constitution of Liberty: "There is probably no single factor which has contributed more to the prosperity of the West than the relative certainty of the law which has prevailed here." A wealthier people can better support the needy. The government can promote wealth through law and order.
Second, the government could abandon its redistributive schemes, reduce the burden of direct taxes and inflation, and leave to productive individuals the means and the incentive to help their less fortunate neighbors. Charitable giving is much more efficient than coercive redistribution.
Third, the state can use its judicial power to prosecute criminal and fraudulent abuses of charity.
The state does have a concern for the welfare of its population. The only legitimate way and the best way to care for the poor is through encouraging charity in the private sector by the three-fold method outlined above.