Monday, November 09, 2015

Correcting Our Own

As many of you know I am a big fan of Stefan Molyneux.  His call in shows are a bit emo, but when he does specials or particular research on a particular topic I very much enjoy them as he is usually pioneering a new vein of philosophy or thought.

However a common fact he refers to (not necessarily cite) is that the amount of money in social programs that actually reaches their intended recipients is a mere fraction of the total, implying  the majority of it merely goes into the pockets of government workers and administrators.

I had no reason to doubt him as I trust the man is intellectually honest, but it wasn't until my economic spidey senses started tingling with a great economic idea that I found out he is likely wrong.

The idea was that if there was that much government bloat, there would be an area where even the most right wing and left wing persons could get together and have a great compromise.  Recipients of welfare, TANF, WIC, EBT, etc., could get an increase in their benefits, while the producers and taxpayers of society could get their taxes lowered.  This would be possible by simply streamlining the government bloat used to manage these programs and would be a win win for everybody.

The problem is government overhead accounting for the majority of social program spending just isn't true.  Glenn Kessler did some outstanding (and rare) journalism researching the topic, finding a study that shows SNAP's overhead only accounts for 6% of total spending.  Media Matters also pulled some data for multiple social programs showing the overhead for these programs ranging from 4% to 17%.  And while I don't trust Media Matters to present this data without manipulation or spin, it is in line with Kessler's research (though, not surprisingly their links to the original sources no longer work).

Regardless, the point is that those of us on the right or libertarian side of the political spectrum cannot rely on lies or false data simply because its against our principles.  We want to base our decisions in reality since that is the best way to develop policy, theories, and philosophies that work best in the real world.  So even though it would have been nice to perhaps balance the federal budget on the backs of overpaid and overbloated numbers of government workers, sadly, it doesn't look that way.  We'll just have to find other ways.

POST POST - I spoke with Michael over at Free Domain Radio and he said Stefan already has something in the pipe on this and will present his figures.  Some of the things cited in the comments are what he will be addressing, so I'm sure we'll have a good response.


MC said...

No matter how we cut it, we can't go on paying welfare benefits to those who are, in fact, fully capable of working (maybe with some skills training, maybe with some hard lessons on how to conduct oneself, but nonetheless fully capable of working).

It's not sustainable. It's not sustainable to expect the producers of our society to carry a load of riders. Where's the incentive to work, if one can subsist on the dole?? It's also not sustainable to take an entire class of people, most of whom are capable of doing an honest day's work, and effective MAKE them disabled by telling them that they are. It's not good for the producers-- and it's not good for the people who are being told they're not able, either.

I have sadly experienced that "the system" tends to steer those of us with "so-called disabilities" (iffy things like ADHD, Asperger's, depression, anxiety, and et cetera) toward welfare benefits when all we actually need (and oftentimes have come in asking for) is some education in how to manage (or mask, or work around) our "issues" in order to be productive and self-sufficient.

It's criminal. It drains the productive populace, and it makes the "beneficiaries" more backward, more impulsive, more depressed, more afraid, and more self-pitying.

Disability fraud, or misuse, is not a victimless crime. It victimizes everyone, oftentimes including the people who are supposedly benefitting from it. I wonder what the payoff is.

Anonymous said...

SNAP is massive, the waste would have to be epic to outweigh economies of scale. And it's really a privatized distribution of real goods rather than "services". But if Molyneux doesn't go into details it's true his claim is not too useful

Bob Smith said...

The problem is the government agency budget numbers grossly understate their overhead. It would be illegal if they were a private company, but government budgets do not, for example, include GAO operations as part of their overhead.

YIH said...

is that the amount of money in social programs that actually reaches their intended recipients is a mere fraction of the total, implying the majority of it merely goes into the pockets of government workers and administrators.
Same for so-called 'private charities', even if they take not one dime of 'government money' the vast majority of what they collect goes into the business of running the 'charity'.
The reason it breaks down that way is IRS 501c rules, only 10% of donations must go to whatever 'program/mission' the charity exists for. The rest, as the link above points out, goes to the 'nuts and bolts' of operations; office leases, staff salaries, utilities, ect. But the bulk of it is paid ads/call centers, that spot you see for ''please help blah, blah, blah'' is no different than that spot for that law firm or car dealer.
I'm not telling you to donate or not, that's up to you.
BUT, a piece of advice, send the funds by credit/debit/prepaid debit card (or cash), DON'T provide your name, email, street address and especially, especially, not phone numbers!
Whatever personal info they get from you will be sold around on lists, guaranteed. You WILL get spammed, postal junk mail, and phone calls forever from every other 'charity'.

Robert of Ottawa said...

I always enjoy meeting a federal employee (there are many here in Ottawa) who indignantly insists that they also pay tax, when I suggest they are parasites. I prefer to explain this with a diagram but here in words:

Workers A and B both earn $100k in private enterprise. The government, through total taxation and fees, takes 50% of each pay, collecting $100k. The government employs a worker to perform a task and pays them $100k, of which it takes $50k in taxes and fees.

So, in truth the government employee does pay tax, but also the government is only paying their employee 50% of the market rate.

Net result, the government has taken a total of $100k from A and B and employed someone that it is only paying half the employment rate, with the government ending up with a $50k bonus, which is immediately slipped in to the pockets of cronies and supporters and dependents of the governing party (well, minus a percentage for the necessary stuff of government).

Observasaurus Rex said...

You are comparing the input of SNAP vs the output of SNAP. This is merely the end of a long process. You must consider the government bloat at several other steps:
1) Tax collection
2) Tax enforcement
3) Accounting of taxes
4) Government bitching about where it goes.
5) Finally the direct overhead of the program. Sure when the government sets aside 100$ for a program, the program might get 94% (assuming the numbers you found are true). But if you consider that 100$, how much did it cost taxpayers to even amount that much? 150$? 200? 300?

Unknown said...

Good job.

Perhaps you could ask Stefan if he means that the funds are missapproreated by administrators - or perhaps incorrectly distributed to individuals (or persons representing them). It could be that a significant portion pays out to fradulent claims. Which would fit the claim I think he's making - but maybe not. The IRS payouts to fraudulent claims would be a good example - but probably doesn't qualify as "mostly".

I have no data, just curiousity.

heresolong said...

If Media Matters says that it is as high as 17% do you really think there isn't a problem? We spend how many trillion on social welfare programs and bureaucrats siphon of as much as 17%? Or more since we know perfectly well that MM can't be trusted?

Anonymous said...


Great video which reminds of your video about the millenial shootings and stem. Amazing how great minds think alike:

Peppermint Panda said...

I would double check the numbers. If you do the simple calculation of total departmental spending divided by the number of beneficiaries the result is typically dramatically higher than the claimed spending by the government.

There is a black hole of missing money between claimed expenses (which may indicate a 6% overhead) and total spending. This is where the inefficiency of government lives.

Tim Carter said...

rainbow agenda they succer the women in firstjust like in the garden works every time