Top Ten Bad Assumptions: 10 – Welfare is charity.

Alternate Assumption:  Welfare is nothing like charity.

Most of my extended family and many of my good friends are Democrats.  I think that a primary reason is that they perceive the Democrats as the political party that tries to help people.  Such programs as welfare, Medicare and Obamacare are seen as a form of charity.  If we are good people, we must support these programs.  I’d like to challenge this assumption.  There are three big differences between welfare and charity.

Donating to charity is voluntary.  Paying taxes is not.

By definition, charity is voluntary.  Other people may have a different experience, but my understanding is that paying taxes is not exactly voluntary.  One can argue that if we are members of society and society democratically votes to pay taxes to help others then this is voluntary.  We can always elect to leave that society.

This argument has validity if everybody who votes pays taxes and everybody potentially benefits from the spending.  For example, if a city votes a 1% sales tax to support city parks, one can argue that even if I never go to a park, I have the right to use the park and the whole city benefits from having a park.  I think it has less validity if everybody pays and only a few benefit.  If this same sales tax is used  to subsidize favored corporations or for welfare payments, then it moves into what I would consider a gray area.

If, however, the majority of people vote for a tax paid only by a minority, then it  totally ceases to be voluntary.  For example, if 90% of the people vote for a tax that is only paid by the top 10% and then redistributed to the other 90% then this isn’t charity.  This is theft by taxes. We fought a revolution against the British because of taxation without representation.

Charity is much more efficient than welfare.

When you give to a good charity, a high percentage of the money actually goes to the recipients.  I know that my favorite charity that provides many services to the poor, including a food bank, cites that over 85% of donations go to the poor and less than 15% goes to administrative overhead.  James Rolph Edwards did a study in 2007 published in the Journal of Libertarian Studies in 2007 that stated that typically charities target 75% of the their spending directly on services to the poor and 25% goes to overhead.  In contrast, with welfare programs only 25% of the money goes directly to the poor and 75% goes to overhead.  Welfare is a very inefficient way to get services to the poor.1

This becomes particularly worrisome because many supporters of welfare believe that because government helps people, they don’t have to.  For example, Vice President Joe Biden is a big proponent of government spending on welfare.  This chart shows Biden’s tax donations for the ten years before he became Vice President:

Biden_tax_returns_2

When we direct money to welfare, we often direct money away from charity.  As a result, the bureaucrats prosper and the poor suffer.

Welfare is addictive.

The most insidious difference between charity and welfare is that welfare is addicting. We now have multi-generational welfare.  People spend all their lives on welfare and don’t know anything else.  Welfare does not cure poverty.  Welfare causes poverty.  The following graph charts welfare spending in constant dollars against the official poverty rate since the war on poverty started in 1964.

Welfare Spending vs. the Poverty Rate

As the chart shows, the poverty rate fell dramatically from 35% in 1950 to  less than 20% in 1964 before the war on poverty started.  It continued to fall to approximately 10% in the early 70s.   Since then, despite dramatic increases in welfare spending the rate has stayed within the 10 to 15% range ever since.  We are spending more and more money on welfare to fight poverty, but we are not reducing poverty.  Since Obama became president, we have dramatically increased welfare spending, but instead of poverty going down, poverty has gone up.

The addictive quality of welfare in the long term make poverty worse instead of better..  Each charity can decide how it wishes to help people.  If the charity isn’t being effective, it can change what it does.   If the donors think the charity is ineffective, the donors can give elsewhere.  Welfare is a government program that is locked into what it does.  It doesn’t change when it isn’t effective.  And the “donors”, the taxpayers, certainly don’t have the choice to give elsewhere.

Conclusion

Welfare is not charity.  It is not Tzedakah.  Welfare replaces Tzedakah, and welfare is a poor substitute.  Assuming that welfare is charity is a very bad assumption.  The people who suffer the most from this bad assumption are the poor, the people we are trying to help.

1Normally, I always like to cite reference data from mainstream sources.   In this case, after extensive googling I was unable to find any data from a well-known, unimpeachable source.  This data is typical of what I found.  I will leave it to the reader to evaluate the merit of this claim and I would appreciate it if anybody else can provide data from a more mainstream source.

5 thoughts on “Top Ten Bad Assumptions: 10 – Welfare is charity.

  1. I think that you are correct in asserting this and that it is a significant motivation for Jews and non-Jews alike: “I think that a primary reason that most Jews are Democrats is that they perceive the Democrats as the political party that tries to help people.

  2. The idea that most Jewish people are Democrats surprises me. What I have experienced is that most of the Jewish Folks that I know are Republicans, because of Israel and their wallets..

  3. Pingback: The Devastating Consequences of a Bad Assumption: The South’s Moral Justification of Slavery | Ralph Koppel

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