Total direct federal spending on the poor was $927 billion last year, with states kicking in a roughly equal amount. More than half of this amount is health care costs (Medicaid). There are other, smaller programs tucked away in other federal agencies. We’ve been winterizing homes and subsidizing poor (and rich) people’s telephone service for a long time. It must be admitted that the patchwork of anti-poverty programs is inefficient, prone to fraud and populated by many who are bilking the system. I don’t know how big the problem is, but if we were, for example, to end all pure welfare payments (Temporary Assistance to Needy Families), we could balance the budget for six weeks each year. There is more to our problems.
The federal government also provides Scooby Snacks to business. The home construction industry, whose customers buy their goods tax-free and deduct the cost of local taxes from their federal income, reap about $100 billion a year through the home-mortgage deduction. Then there’s the farm subsidy of more than $35 billion a year, and more than $70 billion on all other forms of direct business subsidies. All of this is long before the TARP and stimulus, which was a one-time gift of several hundred billion dollars to businesses. Unions, too, receive huge subsidies, most especially through federal efforts to stabilize pension funds. Moreover, state and local governments are far larger culprits, and tax abatements in many communities represent half their annual budget.
There are plenty of folks who get “something for nothing” from other taxpayers. The truth is, it is ultimately most of us. Soon we must have a serious, honest and fact-laden talk about government distribution of taxpayer money. We cannot afford to do otherwise.