Is Government Needed to Fight Poverty??

posted by Nima

April 3, 2010 · Posted in Government 

The common and unfortunately rather unimaginative and uninformed objection to the stateless society is that without a government nobody would care about the poor and we’d all go down in a selfish orgy of mass impoverishment, with a few evil rich bastards left at the top, laughing and cheering as they feast upon the plight of the masses.

It is very important to understand that when people say such things they do so because it’s what they’ve been told and what they want to be true. They have obviously not gone out and done their strenuous and deep research in order to test their theory. Nor are you going to find any curiosity in these people. They are not feverishly trying to analyze and question these things out of a natural drive for truth and discovering reality.

But this need hardly impress those who in fact do aspire to understand reality and truth.

One simple reason why I personally know such a notion is completely unfounded and pulled out of nowhere is that 99.99% of the people whom I introduce for the first time to the idea of a stateless society will shout out with an impressively quick and almost pre-trained reflexive reaction something like “But what about the poor?!”.

That is, in my opinion, a pretty decent ratio of people who do seem to care about the poor. But then, maybe there’s just something awesome about me personally that naturally draws in all the good, virtuous, and caring people in society, who knows?

Fortunately we have other more objective means to put to rest such glaring and unfounded nonsense.

How much are individuals currently willing to give to charity on a completely voluntary basis?

On Charity Navigator we can find charity statistics for 2008:

Few people realize how large charities have become, how many vital services they provide, and how much funding flows through them each year. Without charities and non-profits, America would simply not be able to operate. Their operations are so big that during 2008, in the midst of a recession, total giving was still more than $300 billion.

How big is the sector?

Total giving to charitable organizations was $307.65 billion in 2008 (about 2% of GDP). This is a decrease of 2% from 2007.

OK, so we know that private individuals and corporations were willing to give $307.65 billion to charitable organizations on a completely voluntary basis.

How much of this money actually ends up in the hands of the needy? According to reputable charitable auditing and rating websites, such as Razoo this number seems to be around 80-85% on average.

So around $246 billion ended up in the hands of poor people as a result of completely voluntary charity donations in the US.

What about our dear, benevolent,and ferociously poverty fighting heroes from the government?

According to official government budgets, approximately $486 billion tax dollars were budgeted in that same year.

Based on multiple sources about 70% of all government programs and grants goes toward administrative expenses, meaning bureaucrats’ salaries, to anybody who has ever worked in, with, or for the government, certainly a realistic estimate:

Mary Ruwart writes:

Of course, public welfare gives over 2/3 of every tax dollar we give them to overhead (e.g., salaries of the bureaucrats who administer the program). Private charities, however, give 2/3 of every dollar to those who need help. By switching to private distribution, we’d cut overhead in half. In other words, we’d double the dollars available to the needy once again. By switching from public to private charity, we’d quadruple our help to the disadvantaged–virtually overnight!

Cato writes:

Today, 70 cents of every dollar goes, not to poor people, but to government bureaucrats and others who serve the poor. Few private charities have the bureaucratic overhead and inefficiency of government programs.

So US federal, state, and local governments together in 2008 contributed about 146 billion dollars that ended up in the hands of the poor.

In total, this means that in 2008 US citizens voluntarily or involuntarily gave about $392 billion to the poor out of which 62% (!!) was contributed by the rugged, selfish, and evil private sector while around 38% was coughed up by the virtuous, heroic and selfless government bureaucrats.

So you tell me, is the government really needed to “fight poverty” … ?

Please keep in mind that I am focusing in the above solely on existing numbers. I am not even delving into the fact that the government is the very cause of poverty, simply due to things like wars, drug policies, import quotas, the granting of monopolies to corporations and unions, the funding of foreign dictatorships, unemployment due to minimum wages and taxes, inflation through money printing, credit expansions and business cycles, the direction of capital from useful to useless needs, deliberately limiting the supply of health care products and services, etc. etc.

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2 Responses to “Is Government Needed to Fight Poverty??”

  1. [...] I think it is at the very least fair to say that evidence exists to corroborate our (actually rather unsurprising) theory that government welfare programs are not introduced by bureaucrats in order to end poverty, but rather to make sure it remains at a level that allows them to justify the existence of government programs intended to battle poverty with money that of course in the end mostly ends up in the hands of the bureaucrats themselves, not the poor, as I outlined before. [...]

  2. Edward on August 15th, 2012 10:25 am

    I followed the links regarding the overhead cost being around 70%? They didn’t cite this.

    Can someone for the love of God help me prove this statistic with verifiable data!?

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