Brother, Can You Spare Another Trillion or Two?

Stacks of US money are bursting in flames

It’s taken for granted that everyone has a right to a safety net, and that government must provide it.

This unquestioned assumption rests on two ideas.

Assumption # 1: We are all each other’s keepers, and the government has a right (if not obligation) to force some people to take care of others, whenever the government deems that appropriate.

Assumption # 2: The government actually performs the task of charity it claims to perform.

Let’s take a look at the second claim.

The Foundation for Government Accountability released a report Thursday detailing the worst examples of welfare fraud and how to fix them.

“Across the nation, government welfare programs are plagued with wasteful spending,” the report contended. “Although the federal government does not maintain a national estimate of improper payments in cash assistance programs, state-by-state reviews have identified excessive rates of waste, fraud and abuse.”

“An audit in 2013 of the Nebraska Health Insurance Premium Payment (HIPP) program—a component of the state’s Medicaid program—found that the state lacked appropriate documentation in every reviewed case file, calling into question the entirety of expenditures made under the program,” the report detailed. “More than three-quarters of the audited cases had received incorrect payments, with auditors identifying several cases of apparent fraud.” [source:, 4/4/15]

And from the referenced report, there’s this:

The cost of welfare fraud and abuse is substantial. Not only do welfare scams result in millions of taxpayer
dollars paid out to ineligible, undeserving fraudsters, they also steal limited resources away from truly
needy individuals and families. Put simply, welfare fraud is a fiscal and moral crime.

No state is immune. From New York to Nebraska, reviews of states’ welfare systems found individuals
receiving taxpayer-funded welfare benefits without having their identity, assets, and even residency
verified. Other reviews found individuals who no longer qualified for welfare benefits continuing to receive
them—including millionaire lottery winners and even individuals who had died years prior.

Welfare scams drain state budgets, put the truly vulnerable at greater risk, and anger voters. But there is a
simple solution to stop the scam …[source:]

There is, but it’s not the one that anyone will propose. That solution? Get the government out of welfare and charity … completely and permanently.

There’s no other solution.

For decades, people have talked about welfare fraud. “Waste, fraud and abuse.” It’s an absurd cliché. You cannot change basic facts. Government is not accountable in the way that a private charity would be. It can’t be.

Government has a mandate to make sure that people entitled to benefits — under the law — get them. If you work for a government agency distributing handouts, you don’t wish to be caught denying benefits to those who claim them. Similarly, if you are high up in a government agency and perhaps connected to influential politicians who fund you, you also don’t want to be seen as saying “no.” These are legal entitlements we’re talking about. You have to err on the side of making sure people get them.

A private charity, on the other hand, exists for the purpose of actually helping out someone in a particular situation. There are no legal issues. Giving is voluntary. People running the charity have an obligation to their donors. If they fail to give the benefits to the right people, and end up engaging in widespread fraud or abuse, they will lose donations.

Government welfare agencies cannot go out of “business.” They will continue to exist, no matter what. Decade after decade, we read stories about massive welfare, Medicare, Medicaid or other kinds of government fraud. Is there a possibility that any of these agencies will ever close down for not doing a good job? Of course not.

Imagine running for office as either a Republican or Democrat and saying, “I propose phasing out Medicaid, welfare and Medicare. There’s too much fraud and the private market, combined with private charity, should take care of these matters, consistent with the U.S. Constitution.” To say that you’d be run out of town would be to put it mildly. And that’s really sad, because this should at least be open for debate, as America continues to rack up ruinous levels of debt along with taxation, and unfundable mandates, as far as the eye can see.

When government agencies fail, they get more money. When government agencies fail further, they get still more money. It’s not going to change. Rewarding failure is built into the very nature of the system — whether it’s government charity and aid or government handling matters of business, medical care, or education.

This isn’t rocket science, and none of it’s surprising. What’s surprising is that it never occurs to anyone to propose a totally private sector for charity. It’s taken for granted that only the government can or will do it; and no matter how badly the government fails at it, nobody ever questions the fact that government must continue doing it.

Millions of dollars already go into private charity, even with the existence of the government welfare state. Presumably, even more would go into private charity without the welfare state. Free people are the most generous people. Starving or struggling people do not have the luxury of generosity.

However, there would probably be less perceived or actual need of a government charity state in the absence of our welfare state, because the private economy would be robust and flourishing. Taxes would be at a minimum and government would not interfere in the private economy. Politicians would have nothing to do other than make sure the courts and military run properly — more than enough for a government to handle. In a flourishing private economy, there would be no excuse for not making a living unless you really were down and out, and had exhausted every opportunity to take care of yourself. Charity should not be mandated; but keep in mind that it would never be against the law, either.

Private charity is not, of course, infallible. There have been scandals and there’s probably money wasted in private charities, although not nearly as much as in government charity. The crucial difference, aside from the crucial fact that private charity is voluntary and government welfare is coerced? Private charities can shut down, while government charities will never go away.

The same issue that applies to private business applies equally to private charity. Entities that can go out of business (or service) are inherently accountable; they exist to serve the purpose they claim to serve. If they fail (either through dishonesty or incompetence), they go away. Just as customers will stop pouring money into a private business that doesn’t deliver what it promises, donors will stop pouring money into a private charity that racks up scandal and fraud, as government charities do on a daily basis.

If it’s charity and help for the needy that’s your passion, you should be at the front of the line in getting the government the hell out of the way, when it comes to private charity. It’s morally wrong to compel people to pay for the well-being of others. When you try, the corrupt and rotten system that is our present-day entitlement and transfer-of-wealth state is precisely and logically what you had to get.

“States can deter eligibility fraud by publicly prosecuting individuals who knowingly scam the system,” the report detailed. “All cases of fraud and misrepresentation should be referred to the appropriate authorities for prosecution and benefit recovery. States would be able to use traditional collection tools, including garnishing wages or tax refunds, in order to recover the value of fraudulently-obtained benefits.”

“States should uphold the sacred trust that comes with the collecting and spending of taxpayer dollars by collecting any fraudulent welfare payments and removing individuals from other public programs if they have committed fraud,” it added. [from]

This is not a new solution. Of course the government can prosecute cheaters. But this takes time and money. And as I said, government programs aren’t punished for doing a bad job.

This obvious solution is worthless. If it had any value, then fraud and waste in government charity would have subsided a long time ago. But even this non-solution is too much for some:

Not everyone, however, agrees with the solution. The Center for American Progress, a left leaning research group, argues reforms should be focused on expanding programs.

Ah, there it is. The solution to government waste, fraud and abuse? More government money. More taxes, more debt, more wealth redistribution. This is the same way more money for public education is justified, when fewer students are adequately schooled; give more money. Ditto for anything else the government touches. When it fails, just spend more.

There’s no reforming any of these programs. When will people start to get this? When will it become at least one side of the debate?



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