The Shocking Cost and Failure of the Welfare State

Monday, January 28th, 2013 and is filed under Blog, Economy, Immigration

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As we contemplate granting full citizenship to millions more legal and illegal low-skilled immigrants, it would be wise to review the status of the current welfare state.  Robert Rector and Jennifer Marshall, two of the leading experts on welfare policy and poverty, have put out an informative piece on the welfare state and where we are headed in terms of reform policies.  Here are some of the key points:

  • In 2011, we spent $717 billion in welfare programs at the federal level.  Together with state programs, the total cost is close to $1 trillion.
  • Temporary Assistance for Needy Families (TANF) is the only program out of nearly 80 means-tested programs that was reformed in ’96.  It accounts for just 2.4% of the cost of all federal welfare programs.  And even those reforms have been gutted by Obama.
  • “Since the beginning of the War on Poverty in the mid-1960s, government has spent $19.8 trillion (in inflation-adjusted 2011 dollars) on means-tested welfare. By comparison, the combined cost of all the wars in American history — from the Revolutionary War through the current war in Afghanistan — has been $6.98 trillion (in 2011 dollars). The War on Poverty has thus cost three times as much as all of our real wars combined.”
  • What have we gotten for all of this?  According the U.S. Census Bureau, some 46 million Americans, including 16 million children, were “poor” in 2010.  In 1966, the share of the population living below the poverty (self-sufficiency) threshold was 14.7%; by 2011, it had actually risen — to 15.0%.
  • Food-stamp spending has exploded in recent years, from $19.8 billion in 2000 to $84.6 billion in 2011.
  • More than 100 million people, or a third of the U.S. population, received aid from at least one means-tested program (not including Social Security and Medicare).
  • More than a third of single-parent families with children are poor, compared to only 7% of families with married parents. Overall, the children of married parents are 82% less likely to be poor than are the children of single mothers.

Oh, and one more point: none of this factors in the projected cost and dependency level of Obamacare.