Welfare Programs Now One-Sixth Of Federal Budget
on Wed, 17 Apr 2013
Federal welfare programs now account for one-sixth of the federal budget ($588 billion), a figure that does not even include unemployment benefits, Social Security, and Medicare, reports Bill Frezza of Forbes.
The bleak Obama economy, however, is only factor driving welfare's growth, says Frezza. Corporate cronyism that profits from poverty programs has helped fuel a welfare industry that uses taxpayer dollars to generate corporate profits in ways that grow government:
Today, agricultural interests are still among the biggest advocates for these programs, but other industries are learning that they too can make a buck by promoting America’s war on poverty…
Details are hard to come by as they are not broken out in earnings reports, but a 2012 study from the Government Accountability Institute “Profits From Poverty” indicates that since 2004, 18 of the 24 states that contract with J.P. Morgan to provide welfare benefits have paid over half a billion dollars in fees. That may not sound like much relative to the size of some of these firms, but it provides a nice steady income for an industry happy to shower members of the House and Senate Agricultural Committees with annual campaign donations now exceeding $300,000 per year.
The result, says Frezza, is the distortion of genuine competition that drives free market capitalism.
“What could be better for the myriad civil servants and wing-tipped bankers who dole out benefits as ever more ‘clients’ join the ranks of the poor and unemployed?”