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The Problem of Poverty: Welfare in America

For centuries, nations, cities, and individual families have dealt with the problem of poverty; how to remedy current situations and how to prevent future ones. For most of history, there have been no government controlled poverty assistance programs. The poor simply relied on the goodness of their families or, if they did not have a family, on the generosity of the public at large. In the United States, this situation changed in 1935 with the passage of the Social Security Act.

The Social Security Act has seen many successes, but it also faces many critiques of its structure and function. In the past, most governments did little to actively aid their poor population. This duty was understood to fall on the families of the poor individuals, charity groups, and generous individuals. Some governments aided their needy in indirect ways. One of the first government-mediated assistance programs was passed by the English Parliament in 1601 as the Act for the Relief of the Poor.

This act set up local parishes that were responsible for taking care of the poor in their own district. However, the government provided no funds to facilitate this programthe parishes were responsible for levying and collecting taxes to finance their programs. Though it would be considered a very primitive form of welfare by todays standards, it was a large step toward government-mediated welfare compared to the English system 250 years before that. In 1349, Parliament forbade charity on the grounds that it might encourage laziness.

Since then, public attitudes have changed about the responsibility of the citizens and the government to provide for the assistance of the needy. Limited federal assistance was given to war veterans and their families beginning during the Civil War, but large scale assistance to the general needy community was not available for almost 75 more years (Komisar 48). A large contribution toward the assistance of the poor in the United States came during the Progressive movement around the turn of the century.

Activist groups championed not only workers rights in the form of unions, but also the right of every citizen to have access to decent living conditions (Komisar 67). The Progressive movement slackened during the prosperous 20s, but the social welfare issue was forcefully placed back into the public consciousness with the advent of the Great Depression in 1929. With an unemployment rate as high as 25% and millions without sanitary living conditions, ignorance of the problem of poverty would have been disastrous.

In 1935, Franklin Roosevelt signed into law the Social Security Act which, among other things, provided for the financial, medical, and material needs of the poor (Komisar 125,128). Since then, there have many additions and reforms to the bill, none of which has served to quell the controversy surrounding the effectiveness of the welfare system in the United States. The main concerns of the distribution of welfare dollars and resources can be answered by the questions Who gets assistance? and How much do they receive?. The U. S. elfare system is administered by the Department of Health and Human Services, which attempts to answer these questions through a system of minimum incomes, government-calculated poverty levels, number of children, health problems, and many other criteria. This complicated system leads to one of the critiques of the welfare systemthat it is too large and inefficient. President Lyndon Johnson declared a War on Poverty in 1964 designed to alleviate the burden of the poor and established the Food Stamp program the next year (Patterson 139).

In 1996, a major welfare reform bill was passed that placed time limits on welfare assistance, required able participants to actively seek employment, and implemented additional services for the needy (Patterson 217). The effects of this latest reform are still being studied, but one thing is certain; it has dramatically decreased the number of poor people on the welfare rolls. But is this a good thing? Or does it simply mean that many more poor persons have been shut out of government aid? The governments inability to answer these questions has lead to many criticisms of the current welfare system.

As it is set up now, the welfare system is extremely complex and inefficient. Welfare programs operate at national, state, and even local levels. Each level has to coordinate the collection and allocation of resources with the other levels, with which it invariably overlaps. In other words, both federal and state welfare money will cover a certain state, but it is difficult to organize the even distribution of funds. In the county that contains San Francisco, the local government decided to return over $6 million in unused child care assistance programs.

This unequal distribution is characteristic of a multi-layered organizational structure. This complexity also leads to inefficiency, as some programs overlap service areas and other areas are without adequate service. The federal money earmarked for the Department of Health and Human Services comprises over $350 billion dollars, or more than 20% of the federal budget. This makes it the third most costly item on the budget, exceeded only by the Social Security Administration (another form of welfare for the elderly and disabled) and payments on the public debt..

The very high cost of welfare, combined with the questionable degree of its success, causes many objections among opponents of the current welfare system. Although only $14 out of every $100 is distributed directly as cash payments to the poor, much more is given out in the form of food, clothing, and other material handouts. The complexity of the welfare system is also very costly. High numbers of participants require high numbers of administrators, caseworkers, and other behind-the-scenes government employees.

Some would argue that this money could be saved by implementing a simpler system with less overhead administrative costs. Some economists have argued that it is foolhardy to continue to increase spending on social welfare, because of the law of diminishing marginal returns. The more money that the government spends on welfare, the less obvious the effects are. Some would argue that the current costs of improving the poverty situation in America out weigh the benefits. Therefore, they assert, funding should be decreased in these areas and allocated to more needed locations.

The argument that welfare encourages idleness is more of a psychological issue than an economic one, but it is a valid concern nonetheless. Does giving out relatively free services and finances cause people to become dependent on them, rather than aid them in helping themselves escape poverty? Although there is no conclusive evidence that supports either side of this argument, both sides are very vocal about their reasons. Those who believe that welfare causes idleness and laziness might use domesticated animals.

Humans have taken away these animals need for various survival behaviors by giving them food and shelter whenever they need it. Domesticated dogs and cats would have a very difficult time surviving in the wild. Similarly, some believe that doling free handouts to the poor only compounds the situation by encouraging them not to work. This camps motto is Give a man a fish and he will eat for a day; teach a man to fish and he will eat for a lifetime. Others think that welfare gives the needed resources that people in poverty lack so that they might escape poverty.

These people believe in giving resources to people with the belief that they will be able to help themselves in the best way that they know how. The undeniable fraud that occurs both among the suppliers of welfare assistance (government agencies, health care organizations) and the receivers is another objection to the current welfare system. Doctors and insurance companies may purposefully charge higher rates for people on welfare, depending on the poor persons ignorance and the governments willingness to foot the bill for their success (Segalman 178).

Though this fraud is regulated, it has occurred and will occur despite regulation. Some also believe that welfare encourages a form of fraud among some of the poor who receive the aid. They believe that the guidelines and formulas set up by the government encourage poor persons to lie about there health and income, and even to have extra children in order to receive more money from the government. These problems are difficult to blame solely on the welfare system, and are also nearly impossible to effectively regulate and eliminate.

Another issue that some people take with the welfare system has nothing to do with how it operates, but simply the fact that it is allowed to operate at all. These people point to the constitution, which does not allow the federal government this right and gives all powers not delegated to the federal government to the states. The belief that social programs should be administrated by state and local, rather than federal government is not new. Some people agree with the conclusion of this groupthat the federal government should not be involved with welfarebut have differing reasons.

They say that welfare should be administered by the states simply because it would be more efficient, not for any constitutional objection. The problems in setting up a welfare system are similar to the problems of running the actual program. These problems include the two previous questionsWho gets assistance? and How much do they receive? and another one; Who is going to figure out the answers to the first questions and apply those answers to the benefit of the poor?. Therefore, the problem in organizing a welfare system comes down to the question of the governments role in welfare.

With all of the improvements in the standard of living that have been brought about by changes in welfare, social security, and other government programs, it would seem ludicrous to suggest that government should completely back out of the welfare system and leave that to private institutions. Because the improvement of the poor persons lot producing positive externalities such as increased productivity and lower crime rates, the private sector would under-produce these services. Clearly, the government needs to have some role in administering welfare. Oddly enough, the solution to the problem of poverty may be found in our past.

Government at the national level is unable to provide for the good of every poor person in an economically and practically efficient manor, but individual people and smaller local organizations can. If the government subsidizes groups who help the poor, it would be less costly than creating and administering its own programs, and also more effective. By creating awareness in the public consciousness about the problem of poverty, and offering economic incentives to individuals and groups who are willing to help out, the government can facilitate the improvement of the standard of living of poor people in an effective, efficient, and cheap way.

The phenomenon of private replacement of government service has already been observed in some parts of the country as a result of the effects of the Welfare Reform Act of 1996. In Arlington, Texas the number of welfare cases decreased by almost 35,000 from 1994 to 1999, while the number of people served by Arlington-area charity groups increased almost 20,000 during the same time period. But what of the 15,000 unaccounted-for cases?

It is not known whether these people are now employed or if they slipped through the cracks. At the current rate of increased reliance on private charity, Arlington food banks are finding it difficult to meet the need. With some government subsidizing, the food banks could meet the needs of the increased number of people who seek their services. Although it is probably impossible to achieve complete freedom from poverty, society need not sit idly by in the face of such a monumental challenge.

Indeed, it is the public duty of each individual to aid in the improvement of the lives of poor persons around the nation and around the world. Large-scale, complex systems such as the one now in place in America, only serve to create an inefficient, costly effort that could be achieved with less manpower and fewer dollars. Government oversight and subsidizing of private contributions toward the elimination of poverty is a far more efficient, adaptive, and economical way of working toward the eradication of the problem of poverty.

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