We have government charity -- welfare -- to help the needy, but I'm not so sure.

According to Father Robert Sirica of the Action Institute, 40% of taxes go towards 1 social program or another. But the Wall Street Journal reported in '95 that the federal government looses about 70% of the money in buracratic costs. (Wonderful Welfare, Wall Street Journal, 3/24/95.) Compare that to a typical private charity which keeps its overhead down to 5% or less.
People want to make sure charities are doing what the donors want with it, and that they're doing it efficiently. If they don't, people won't donate.

But would people give to charity if the government didn't force them. History tells us that Americans are very giving people. According to Larry Elder, during the 1980s, the "decade of greed" charitable contributions by corporations and private citizens increased by at least 30%. Even in other countries, people are very giving. In 1910, before England's massive welfare state, there were 26,877 registered charity organizations, and at least that many unrestestered ones. They helped people with medical care, aid to orphans and widows, burials, and other benefits. But when England started federalizing welfare, the number of charities plummeted, and the charities that were able to remain, lost much of their effectiveness. One theory is that taxpayers felt that, since the government took over aid, individual assistance was no longer required. Individuals were less likely to give up their hard earned money. Government welfare foisted the "I gave at the office," mentality.

Let's do a little math.

What would happen if that 40% of our taxes that the government took, was left in the hands of the people?

Assume government was taking $100. Now, it's taking $40 less of people income, and the people are keeping $40 more of their income. Lets say based on the empirical evidence of the 80s, that donations to private charity increase by 30% of $40, or
increases by $12.

But, government WAS giving $40 to charity.  But was it? Remember 70% gets eaten up in beuracratic expenses. So really, the government has only been giving $12 to charity all along. So the amount between the too, is equal, right?

But wait, the private charity's can have as much as 5% overhead. 5% of $12 is 60 cents. So really the private charities only get
about $11.40 cents out to the needy.

So, does government charity really help the poor more 60 cents per hundred dollars more then the private sector would? No. Sure, it throws more money at the problem (5.3% more) but what does that show. According to my own personal observations in Sioux Falls, most people who use Food stamps, use them very irresponsibly, (by my observation over 99%. But my observations were probably a bit skewed so lets say 90%) and most are able bodied people who could find a job if they wanted one. The problem is, they aren't. They can get a better deal, and a better standard of living by using government welfare programs. Besides, the poor in America really aren't as poor as people think. Apparently, the poorest 20% of the population earned an average income of $6,393 in 93. 92.2% of "the poor" own color televisions, 60% own microwaves, 7.4% have personal computers, and 41% own their own homes -- 70% of those, with no mortgage. More "poor" people own VCRs and DVD players, then non-poor people in most European countries. Apparently, government welfare, isn't going to the people who truly need it. In fact it's impossible for government to accurately check whether or not a person is truly needy. Private charities do a much better job of figuring that out.

Do government programs actually help those few who actually need it? Here in Sioux Falls, I see signs all over the place at fast food resteraunts and movie theaters who are hiring. Most have a starting wage of over $6 or $7 an hour. Now, why are businesses offering wages higher then minimum wage, when so many people on welfare are competing for jobs? The problem isn't lack of jobs. It's that, these people don't know how to hold down a job or be responsible with a paycheck. Private shelters and charities teach people the responsibility they need to become independent. In "Solving the tenacious problem of homelessness," LPNews mentions Step 13 and the Gospel Rescue Ministries. These two shelters teach responsibility and basic work ethics.  About 80% of Gospel's homeless clients are drug addicts. The people that go through that program have over a 66% success rate. In the article, Michael Tanner, the director of health and welfare studies at the Cato Institute says, "There is a government-run drug treatment center just three blocks away has only a 10% success rate, although it spends nearly 20 times as much per client."

Apparently throwing money at something, especially taxpayer money, doesn't work. A shelter in Chicago mentions to Larry Elder that they teach "Responsible sexual behavior, the dangers of illegitimate childbirth, and how to hold a job." The average stay in the Chicago shelter is 7 and a half months. Only 6.5% ever return. Why? Because they've learned how to be self sufficient. Private charities teach people to get back on their feet, and become independent. The amount of money needed to be spent on charity will get lower and lower as more and more people learn self-responsibility. Instead of teaching "dependence" on government money, private charities teach "independence."

Their isn't a government program out there that can teach personal responsibility and independence in 7 and a half months, and there definitely isn't one that has a 93.5% success rate like the Chicago shelter or even 66% like the Gospel rescue missions.

So, the private sector helps 66-95 percent of truly needy people, compared to a 10 percent government success rate. And the government spends over 20 times as much per client.

Let's re-work that math.

Government charity gets about $12 gets to the people. When we privatize it, about $11.4 goes to the needy.

But only about 10% of welfare recipients actually need it (This is very forgiving, from my personal experience).

So, only about $1.2 out of every $40 the government takes in taxes gets to truly needy people. Compare that to the $11.4 out of every $40 that would historically make it to truly needy people if we didn't have such a high taxation rate.

Government also spends much more (sometimes 20 times more) per truly needy person, then private charity does, and it doesn't do as good a job. From the above examples, private charities also have at least 6 times the success rate, so that $11.4 goes as much as 20*6=120 times farther then government charities do. What does this mean? $1 in a private charity, does 120 times as much work as $1 in a government welfare program. 120 * 11.4 = 1368 . Private charities would effectively do 1368 units of good, compared to 1.2 units of good done by government welfare programs. 1368/1.2 = 1140. Our country would be 1140 times more effective in helping the needy, if the government stopped its welfare programs and gave us back the money it used to fund them.

We haven't even talked about that other 70% of that $40 that the taxpayers were allowed to keep. What happens to that $28?

Well it's either spent, saved, or invested. Spending money creates business for employers, which creates jobs. Savings is deferred spending, but while it's being saved, it gets invested too. Investing money, creates capital, new businesses, and jobs. Basically, the rest of that money staying in the private sector, helps the quality of life for the poor also.

Tracy Saboe