Chances are, if you are a small business owner or employee, your business does not get much business from welfare recipients. Big business get more of the business from welfare recipients. So, what’s going on is that you are paying taxes on your productive labor, that money is being handed to a person who is not working, and that person is then patronizing a big business.
It’s no wonder that big business is never leading the charge against welfare reform. Many of them are great beneficiaries of it and it allows them to also “receive a handout” from the government. Corporate cronyism. The lobbying dollars the big businesses spend ensures that Big Government favors Big Business over Small Business.
Government regulations impose higher costs on small businesses, because the “cost per employee” to meet the demands of the regulation are much higher for small businesses. No wonder some corporations actually advocate for more legislation and restriction on business – it keeps upstart competitors out of their market.
Perhaps most disturbing is the way welfare funds are used.
Think about this. If you as a small business owner or as a small business employee were able to keep more of your money, you could actually create more jobs (by expanding your business and hiring others if you are an owner) and spend more in your local enonomy (if you had more take-home pay after taxes), THEREBY LOWERING THE UNEMPLOYMENT RATE AND ACTUALLY LOWERING THE NUMBER OF PEOPLE ASKING FOR WELFARE HANDOUNTS. (I’m shouting this because it’s a fact no one seems to get!)
Taxation for welfare programs BEGETS the need for more welfare programs (and therefore more taxation).
Now, let’s talk about the consequences of Welfare dependency. It makes us all worse off and actually enables bad behavior while diminishing the need to be personally responsible.
I received the following email this week from a member of the SBABG facebook group. He works at a large national convenience grocery chain, but is very sympathetic to our small government message. He writes:
You know what would be nice? If welfare could have more restrictions. 99% of all Electronic Benefit Transfers (EBT) transactions for welfare recipients at my store are for candy, chips and pop. Very, very rarely do I see someone actually use EBT for a necessity.
It would be interesting if there was data that showed how much junk food vs necessities was purchased with EBT.
At least energy drinks such as Rockstar or Red Bull are not covered. A guy tried to buy one a few months back and when EBT wouldn’t cover it exclaimed “They should pay for that!!”. Ummm, No!, I should not have to pay for you to drink sugar water! I know there are people who actually need welfare, but I think the majority of people on welfare are too lazy to try and find a job (even before the economy went down).
Welcome to the harm that Big Government does. Apparently, we are unable to work out social problems in our local communities, so Big Government takes from the most productive among us, gives handouts that do not fulfill their stated objective, and thereby ensures that the problems are permanently with us.
As we like to say, “Way to go Big Government!”
Do you have any “nightmare stories” you’d like to share? Please leave them in the comments below!
Also, please subscribe to our RSS feed and our newsletter, and join our Facebook group.
June 19th, 2009 at 1:14 pm
I had a friend who was in college, married with a child, did not need welfare but qualified for it. He came to visit me with his family (they were in another state).
He brought $100 worth of junk food. Said to me, “Welfare is our fun money. It’s free money and we just spend it on crap.” When I called him on it and said (1) it’s not free money and it’s disrespectful of taxpayer money to use it when it wasn’t necessary and (2) he shouldn’t be using it on stuff that was making him and his family worse off, he replied, “Hey, if you don’t use it, someone else will and they’ll buy the same stuff with it. You should get some too.”
I was a married graduate student with a small child at the time of his visit and also qualified for assistance, but did not want it as I’ve seen firsthand the “evils of the dole” and wanted no part in fostering my own dependency on it and instead took a part-time job to cover my family’s expenses. It made for a lot more work. It was hard. But we didn’t need welfare and I didn’t need to waste some taxpayers money.
Life is inconvenient when you live it right. It’s also very satisfying. Dependency makes life easier in the short run but much less satisfying. And in the long run it destroys you.
June 19th, 2009 at 2:04 pm
The most appalling display of entitlement I saw–and something that just snapped me back towards hating the government welfare–was when I was about 17 and working at a TV store. A couple and their late 20’s daughter came into the store to buy a big screen TV–one of those 50″ers that I hated delivering up two stories of stairs. While they were paying for the TV, they were bragging that their daughter and her two children’s welfare checks and the father’s government disabilities checks were paying for the TV. Even at 17, that pissed me off.
June 19th, 2009 at 2:08 pm
About 8 years ago I worked with drug addicts in Utah. I was talking with a woman who was in therapy for substance abuse and was also out of work. I asked her if she had any job prospects and she said that she had stopped looking because \"I can make more on welfare than I can working.\"
Here I was, busting my butt and working for 9 bucks an hour and paying to put myself through school while she sat at home and collected her \"free money\" every month. And she was finding $ from somewhere to purchase drugs too.
It still gets me upset and frustrated when I think of that experience. How many other people are out there taking welfare checks and not looking for work because they can “make more on welfare and not have to do anything”.
June 19th, 2009 at 2:18 pm
Another apparently uncommonly known fact about welfare is that only about 25% of the taxes collected for welfare end up going to a welfare recipient’s pockets. The only three quarters? “Administrative costs.” It goes to bureaucrats, politicians, and who knows what else in the black hole that is the government. That’s compared to an average 20% administrative cost and 80% distribution in charities. If we do a little math we can see that, even supposing half the population supports alms for the poor (which I imagine is true) they are better off taking their money and putting it into charities than using the government to take money by force from the entire population; in the end less money is taken out of the hands of the productive and more is received by the poor.
As far as welfare recipients being lazy, I think that the welfare system breeds laziness. It is a system where dependence is rewarded most and self-reliance least. In the welfare system, if you start spending the money responsibly, saving it for the future, or get part-time work you will loose some or all of your benefits. Even in situations where the savings is not enough to cover costs or the income from the job is less than the welfare income, you loose everything and are back in the poor house. The system thus encourages you to sap it for as long as possible and take as much as possible; meanwhile you are not growing your work skills or your ability to manage your life, so when you finally do get cut off you’re actually in a worse position than you were before – you’re older with less ability and less experience than your peers, and a huge gap in your work record that will make you unappealing to employers.
June 19th, 2009 at 2:24 pm
Justen,
You bring up some excellent points. This notion of the system being broken is spot on . . . it INCENTIVIZES bad behavior.
June 19th, 2009 at 3:46 pm
There is a lot of bulldust theory here spread by a person who obviously has no idea what they are talking about. It is common to hear people who push for open markets push for none to very little welfare. What they don’t realise is that capitalism is the only system that has welfare. Not Communism or National Socialism. Only Capitalism.
This is because the freer market as we are now seeing, deliberately creates a larger pool of unemployed to keep the wages down. As this drives down wages, more people become dependent on welfare through top ups. For example, under the Howard Government, a minimum of 60% of people receiving the unemployment benefit held employment as casuals. As employers opt to reduce hours handed out, their wages fall and up goes the rate of welfare paid.
The same with the Disability Pension where many do hold casual employment. Their DSP covers them as a top up, to keep certain medication affordable that would not normally be affordable for them. Their DSP also acts as security should their health waver and force them to stay home while waiting to recover.
There is a lot of reform needed with welfare. Most people would agree on this but reform is needed everywhere starting from the very top of society.
June 19th, 2009 at 3:58 pm
I make next to nothing per year and get taxed on it 40% because I own my own business. What’s the point?
June 19th, 2009 at 4:09 pm
I was enlightened to spend some time yesterday with a young, married woman with two children. They are on welfare through her church and receive government Access for medical care. They cannot pay their mortgage unless she cleans homes. She loves Access because it will pay for the child they are hoping to conceive this year. Her husband works ¾ time for the city and has had to take a pay cut. She has “made new friends” with other young couples in her situation who share the latest “freebies” so they can all “make it together.” Over lunch she told me how they have found a way to get free grants for her and her husband go to school. The money pays for every semester PLUS a couple more thousand for “incidentals.” What do they have to do for the money? Not work. Or, if they do, don’t tell anyone and get paid in cash. Did I mention they’re not illegal aliens? Did I mention they feel stuck unless they find “the free things” because they’re entitled to them due to their circumstances?
It was so sad to listen to the words of a person who doesn’t feel the temperature of the hot water she is in–this is so not like her. She paid cash for a car at age 16 (because she worked) and she and her husband were able to use her savings to purchase a condo when they were married; furnished. The downfall was purchasing a larger, older home with a mortgage just higher than what they were able to pay. What they didn’t factor in was the increase in gas (to and from jobs) higher utilities and maintenance on the older home.
The denial, lack of integrity and entitlement I witnessed (so out of character for this person) is in all honesty, frightening and I wonder if this is the mentality of all who become dependent on government welfare. I don’t know because I’m not there and I don’t ever want to be; but I want to understand. I keep seeing this picture in my head—millions of little boats with tiny motors being sucked into a huge whirlpool. There is not enough power in the motors for any to fight the current and get away.
June 19th, 2009 at 4:14 pm
Earth, you obviously don’t know what you’re talking about either. The reason why Communism and Nazism don’t have welfare is because THOSE ENTIRE SYSTEMS ARE welfare. Duh! Why do you think they had bread lines in the USSR? When the governments tell you what businesses should produce, how much, and tell you how much to pay your employees, it’s Fascism (Nazi Germany; Italy and Spain in the 1930s and beyond in the case of Spain). When the governments own the businesses and ensure that everyone gets paid, that’s Communism. In either, the markets depend on the government.
Capitalism did not create welfare – the government did. And if the government stopped welfare and lowered taxes, the free market would respond by creating a need for jobs. If I own a business and I had this extra money, I would re-invest in my business (via R&D or new technologies or finding a way to be more profitable). At some point, I would need to hire more people to keep up with demand. That’s where the job creation comes in.
I will agree with you that welfare needs to be reformed, and so does the government. The government no longer act for the people or are by the people. It acts for special interests groups and elitists who think they can tell me how to use my money better than I can.
June 19th, 2009 at 4:42 pm
Well said, RoAr.
Capitalism won – it improved the standard of living, extending life expectancy, eradicated disease and poverty for the most people ever. And continues to do so. It is the only system that can do so. It has it’s “weaknesses” (debatable) but these weaknesses are of the kind found in human nature. But as Churchill said of Democracy, “It’s the worst system there is, except for ALL the others.”
Socialism lost and left misery and scores of dead bodies in its wake. As a system it is deeply flawed, anti-human-nature, anti-human, and murderous.
It’s been decided. The outcome is known.
The only question now is how committed people are willing to be to what works and step up and take personal responsibility for their own well being and voluntarily help those around them (not by force or coercion).
June 19th, 2009 at 5:11 pm
I think you may like this. I bought a tape of this about 10 years ago.
http://www.youtube.com/watch?v=LQ6Vc2pXMHE
June 19th, 2009 at 8:07 pm
Earth: that is too funny.
Communism is a theoretical economic system characterized by the collective ownership of property whether you work or not. It other words, the whole system is a Welfare System.
National Socialism is a vague and ambiguous political term that typically refers to Nazism. I’ll assume that you just meant Socialism run by the government. Be careful with your terms.
Socialism is an economic system characterized by the state ownership of the mean of production and distribution. In other words and put simply, the government is the only employer. If you are out of work, it is the government’s responsibility to provide you with work since they are the only employer. That makes this whole system a variation of the Welfare System.
Capitalism is an “economic system” characterized by the privately owned means of production and distribution. Development is proportionate to the accumulation and reinvestment of profits gained in a free market. In other words, compensation is relative to a work’s value and usefulness to someone else.
In truth, capitalism is not an “economic system,” but the natural economic order of our world. When two children—who have no knowledge of economic systems—decide to trade baseball cards on the playground, they do so under capitalism’s inherently understood rules. Each card has a perceived value dependant on its scarcity and usefulness. A trade is not performed until both sides agree to the price. That is capitalism.
Capitalism even has a method by which the poor and downtrodden can be lifted and supported. Through charities, one can pool their monies to help those in need. If that charity loses the public good graces (through scandal, misappropriations of funds, high overhead costs, or inappropriate recipients), its funds will dry up. It will eventually fail and a new charity will emerge to take its place. This is the self correcting ability that underlies the whole of capitalism.
The Welfare System (the idiom) is not really related to any economic system. It is a wholly own subsidiary of the government. The Welfare System relies on the government to take from those that “have” and give to those that “have not.” The governments top down approach lacks the self correction of the capitalist charities and quickly evolves into the aforementioned stories of fraud and abuse.
The lack of self correction is not the only problem within the Welfare System. Firstly, it strives to replaces the goodness of the individual with the false goodness of the government. Whereas an individual may have morality, the government does not (and should not.) After convincing its governed of its “goodness,” the government will then muscles charities out of the market by unfairly regulating them and then drying up their funds.
Secondly, the government mandates the taking of funds from the wealth creator for the government’s coronated “welfare recipients.” The wealth creator cannot control who receives these funds. As such, these funds are directed to those with the strongest government lobby, not to those in the greatest need or to those that have more compelling goals.
Thirdly, the government agency, who distributes these funds, neither knows nor cares who receives them. For it, the measure of its worth is not in whom they help, but in how much distribute. This model is fraught with fraud, for the bureaucrat will feel no pain (though job loss, reduce authority or decrease of funds) when these frauds are discovered. This notion will always lead to the aforementioned efficiencies. 25% distribution of fund is appalling but inherent.
Fourthly, the welfare system is a faceless entity that engenders a sense of entitlement. Many think that because it is their government handing out “free” money, they are entitled to it. After all, they are apart of the governed. Eventually, this will lead to the thought that they must “get these free funds before someone else takes it from them.” But what they refuse to acknowledge is that those fund do not come from the government—for the government can only gain money by first taking it—and that money is most unsurely not free.
The statement, “We are from the government and we are here to help you.” should send a shiver down every spine of freedom loving citizen, for the government will only help those that will give it more power; and the Welfare System is it biggest tool.
June 19th, 2009 at 8:16 pm
The end of the 11 paragraph should have said:
…This notion will always lead to the aforementioned *inefficiencies*. 25% distribution of fund is appalling but inherent.
13 paragraphs is a lot of writing for me. 8)
June 20th, 2009 at 9:50 am
They don’t call them handouts for nothing. Well actually they do, because if you do nothing and put your hand out, you’re eligible. I hate when I’m in a grocery line and the person ahead of me breaks out the food stamps for all their food, and breaks out the cash for a carton of smokes or some other wasteful junk. GUESS WHAT YOUR CASH SHOULD BE BUYING, then you wouldn’t “need” my money.
Small business can’t sell as cheap as large, so we have to concentrate on service. People on welfare only care about CHEAP. As long as welfare exists, they’ll continue to spend it wherever they want.
June 21st, 2009 at 10:51 am
I am self employed and have reached a point where I am total finaincial disaster.
Myself and my wife have NOT gone to the welfare office, food stamp office, food bank or any other agency that the current administration wants us to visit.
I have taken a 70% pay cut since november of last year and I have do deal with companies that I perform work for not paying me, and yet I have NOT been to any of these Govt offices.
I will work for what I can make, and pay what I can pay, but I will NOT take the stand that im entitled to ANYTHING!!!.
The only think I am entitled to are the following.
EVEYRTHING THAT THE CONSTITUTION GIVES ME.. no more no less.
June 23rd, 2009 at 6:50 pm
Good for you, David!
I was laid off of my job of 3 years in April, and instead of heading to the unemploymenet office, like my employer suggested, I went straight to the temp agency. I had a job the next day. I will always do my best to not have to depend on the government or any other agency for survival.
(David, have you looked into Dave Ramsey?)
June 23rd, 2009 at 7:34 pm
RoAr,
I have never lived byond my means… but i cant say that I have not run my business beyond it’s means. I work in technology and as thoes of us that do know, you have to keep up with the skills and hardware. ugh.
People dont realize that they can find a job or MAKE one .. find that need.. fill that gap..
Too many right now are saying the same thing that our president said today ” We are just waiting to see how things unfold”… what a bunch of crock…
At the rate we are going , this republic is going to die.. just like rome, just like egypt , just like every great nation that ever exsisted.. why??? Because people figured out that they could VOTE themselves a paycheck.. so they thought…
So for all you concerned.. HOPE THAT CHANGE IS WORKING OUT FOR YOU… because it sure the hell isn’t working out for thoes of us that get out there in the 110 deg sun and work for a living.. keeping you in airconditioned comfort, your phones working, your cable tv running and the gas flowing to your cars.
On the occasion I run home pc service and im just laid out at what i see at times..
Huge flat screen tv’s, expensive Jewlery, expensive cars and food stamps on the table.
If the people dont take back the congress and senate in 10, then we are doomed to be called the USSA.
June 26th, 2009 at 1:12 am
RoAr,
How can we reach you? Would you be interested in guest contributing at the blog?
Please contact us at sbabgorg at gmail dot com.
Thanks.
August 13th, 2009 at 11:12 am
re the original post; such a cold and narrow view point. I do hope you are offended, it means there’s still some compassion within you. You do realize the majority of those on the dole are employed, many of them by Wal-mart and other large businesses. It is your opinion that the majority of welfare recipients are not buying necessities, but lets state them as such, not as facts supported by opinions of your like-minded “cronies”. I mean your mission is states your not for conservatism or liberalism, yet these concerns are all from the conservative view-point.
I want to know what your vision of welfare reform would look like.
August 13th, 2009 at 11:36 am
Michael,
The points of the article are that the Big Government solution to the problem of poverty exacerbates the problem. First point (1) tax rate increases lead to less growth in the productive sector, which increases needs and leads to less employment and wages than could otherwise be paid and (2) people abuse the welfare system.
We advocate for private charities that help the poor and lots of them because (among other reasons) they work 3-4 times more efficiently and effectively than the government.
See http://mises.org/journals/jls/21_2/21_2_1.pdf
And we encourage every member of SBABG to give to private charity until it hurts, and then give a little more.
We encourage all members of SBABG to volunteer (without pay) to directly help those in need.
And we especially encourage people to help their own family members directly and not expect “the government” to do it.
We advocate for taking personal responsibility for the poor among us and in our own families, and for supporting private charities which serve the poor better and which monitor waste more effectively to prevent welfare abuse.
SBABG.org
August 13th, 2009 at 11:41 am
One other point, Michael. We are “non-partisan,” which means neither Republican nor Democrat, nor wedded to any other party (to my knowledge, the founders of SBABG.org primarily voted for the Libertarian candidate or wrote-in Ron Paul on their ballots in the last election).
The appellations Conservative and Liberal are non-partisan, though I’m not sure they’d apply in this case, either. However, you’ll likely not find many liberal people who are “against Big Government.”
Best,
SBABG.org