The Real Problem with Government Welfare: It's Not Fraud

I used to think that the problem of welfare the fraud it engendered, as well as it being a magnet for illegal immigration. In his book, The End of Welfare: Fighting Poverty in the Civil Society, author Michael Tanner points out that neither of these perceptions is true. The problem with welfare, rather, says Tanner, is the kind of unproductive lethargy that it breeds all across society.

What are the common (usually conservative) misconceptions about welfare?

That illegal immigrants are a net drain on the US welfare system.  This is not true. Some sort of employment IS nearly always available to those who sincerely seek it. This is illustrated by the many immigrants who come to America and are willing to find work. Of course, unemployment benefits provide a "floor" for the unemployed American citizen, who generally refuses to accept employment that pays a wage similar to the amount of an unemployment check.

That a great deal of fraud exists in the welfare system.  Not so. As a general rule, Tanner noted, fraud accounts for about 4% of all welfare cases, a much lower incidence than in other government programs.
The danger of focusing on welfare fraud is that it's not the biggest problem.  Tanner says
In many ways, focusing on a distraction from the real evils of the welfare system.
The End of Welfare, p. 126
What are the real evils of the welfare system?

Disincentives to Find Employment. In many cases, people need to relocate to find employment. Welfare assistance short circuits this process.  The Cato Institute explains it
In some ways, the availability of welfare disrupts normal labor migration patterns by allowing people to remain in areas with low employment. If welfare had been in place at the beginning of the century, the great migration of black sharecroppers and farm workers from southern farms to northern factories would never have taken place.
Even Gary Burtless of the Brookings Institution opined that
"if welfare recipients realize their benefits are going to stop . . . it will cause them to search much, much harder for alternatives."
Loss of Dignity. In her book, Tyranny of Kindness, Theresa Funiciello, who was once a welfare mother described the regular "dehumanizing world of the government welfare system--a system in which regulations and bureaucracy rule all else."

Based on her experience with the government, most people's feigned concern for the poor, says Funiciello,
came neither out of real sympathy for the plight of those less fortunate nor out of a simple respect for human life. Their motivating force would more accurately be characterized as disdain.

Tyranny of Kindness, p. 233
Such dehumanization can occur in instances of private charity, but it is not institutionalized as it must be in government welfare systems. Take, for example, the case of an individual who needs a new battery to be able to drive downtown to their new job. Private charity drives the individual to the job and/or purchases the battery for them. Government is compelled to tell the individual to wait two weeks until their next welfare check comes.

Absence of Values. Because government must treat all cases the same, and because of the separation of church and state, government welfare programs cannot support religious programs as a way to help people out of poverty. This is despite the reality that religious organizations have helped legions of individuals out of poverty.

Loss of Initiative. What happens when welfare recipients are suddenly taken off welfare? They find gainful employment in much higher numbers. A study at Ohio University found that
18.3 percent of poor people receiving welfare moved out of poverty within one year. However, 45 percent of poor people who did not receive welfare were able to escape poverty.

The End of Welfare, p. 133
Other studies have shown that, shortly after getting off welfare, nearly half of all former recipients have employment that earns them as much or more than what they were making while on unemployment compensation.

The Solution? To a large degree, "government welfare" is an oxymoron. What government dispenses is often to the detriment of those it is trying to help.  To be sure, there is not a great deal of fraud in the US welfare system. But that is not the problem. The real problem leads to a loss of productivity and money in far worse fashion than fraud ever could. The problem is lethargy. The problem is a lack of real caring.

The solution is private welfare--private charity. Says Tanner:
Private efforts have been much more successful than the federal government's failed attempt at charity. America is the most generous nation on earth.
That's almost ironic: we are STILL the most generous nation on earth DESPITE the fact that the government already takes so much of our money and flushes it down a rathole.


  1. If this were true, then it would naturally follow that nations with more generous and pervasive welfare systems would be less productive due to the "loss of initiative" supposedly engendered by these programs. A quick glance at Western Europe will demonstrate conclusively that this is not the case. While private charity is to be commended and does have some limited impact, truly generous nations are unafraid to tax themselves to insure the security and health of their fellow citizens.

  2. Charles,

    You cannot make your assumption in a vacuum. In other words, there are a number of factors that lead to higher or lower productivity.

    Rather than point out the obvious, I'll let you figure it out for yourself. Which, presumable less productive, countries are you comparing Western European nations to? Now, can you think of any other reasons those countries might be less productive?


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