perpetuate poverty. It should be common sense that when government promises something for nothing, demand will grow and so will the wel- fare state. Indeed, total government spending on social welfare is now over $1 trillion per year. Yet only $1 of every $6 of social welfare spending goes to families with less than poverty-level incomes. For all the money spent on fighting poverty since 1965, about $5 trillion, the official poverty rate has remained roughly the same, about 14 percent. Government waste, however, is only part of the problem; the welfare state is also intellectually, morally, and constitutionally bankrupt.
It is intellectually bankrupt because increasing the scope of market e change, not aid, is the only viable way to alleviate poverty. The best way to help the poor is not by redistributing income but by generating economic growth. Poverty rates fell more before the War on Poverty when eco- nomic growth was higher.
The failure of communism shows that any attenuation of private property rights weakens markets and reduces choice. Individual welfare is lowered as a result. The welfare state has atten- uated private property rights and weakened the informal rules of manners and morals that make life worthwhile. Real growth has slowed as a
“Pu lic charity is forced charity, or what the great French li eral Frederic Bastiat called ‘legal plunder’; it is not a virtue ut a vice.”
result. From 1889 through 1919, real growth aver- aged 4 percent per year while government con- sumed 10 percent of GNP. From 1973 through 1992, however, real growth averaged only 2.3 percent while government consumed 36 percent of GNP.
Morally Bankrupt In addition to being inefficient and intellectually bankrupt, the welfare state is morally bankrupt.