One of the myths about welfare previously linked above:
MYTH: Supporting welfare is a burden causing financial hardship to working class Americans.
FACT: Together, AFDC (Aid to Families with Dependent Children) and Food Stamps are by far the largest items of the welfare budget. Yet in 1992, AFDC formed
only 1 percent of the combined state and federal budgets. Food stamps also took up 1 percent. (Library of Congress, Congressional Research Service, "Cash and Noncash Benefits for Persons with Limited Income: Eligibility Rules, Recipient and Expenditure Data, FY 1990-92," Report 93-832 EPW and earlier reports.) If you expand the definition of "welfare" to include all one-way transfers of benefits for which no services or repayment are required in exchange (such as student grants, school lunches and pensions for needy veterans) then welfare takes up only 12 percent of the combined budgets. (Sources: Library of Congress, Congressional Research Service, "Cash and Noncash Benefits for Persons with Limited Income: Eligibility Rules, Recipient and Expenditure Data, FY 1990-92," Report 93-832 EPW, and earlier reports; U.S. Bureau of the Census, Government Finances, series GF, No. 5, 1992.)
What is creating a financial hardship on working- and middle-class Americans? The rising percentage of American wealth gravitating to the top 1% of the population.
A counter-argument says that money given to wealthy citizens and corporations gets spent in ways that benefit the rest of the economy, and all people, including charitable donations. Yet money that is given to the very poor also gets spent: locally, in ways that benefit the grocer and the landlord and other small businesses. Money that goes to the wealthy often ends up being saved or invested overseas, circulated back into stocks that continue to drive up inflation, or spent on expensive houses that got built where affordable housing used to be.
In 1990, the poorest income group -- under $10,000 -- actually gave the highest share to charity: 5.5 percent. (Survey by Gallup Organization and Independent Sector, cited by Boston Globe, "U.S. Charities See Increase in Gifts," December 16, 1990)
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Inequality and Health