You missed the mark in a couple of areas, but everything you said (except #5) is reasonably accurate. It is a matter of perspective and how much one knows about our monetary system.
First of all, welfare isn’t really intended to lift anyone out of poverty or even to provide necessities to those who find themselves temporarily disadvantaged. The main purpose of welfare is to avoid the kind of domino-like collapse of supply chains that we saw leading up to the great depression. This is why most of the benefits are automatic stabilizers to avoid being held up by Congress infighting for political purpose. Hardly anyone depends upon them for any length of time, but business needs them all the time.
The worst of the depression only saw around 25% unemployment, but our society was much more agrarian at that time, so rural areas had no food shortages. However, that level of depletion of demand was enough to bring down most of the food supply chain to the cities. It should be noted that current unemployment in this “good” economy, if measured in the same way it was then, is over 10% and much more of the nation, including most in farm country, are dependent upon that supply chain. We would be wise to decentralize that chain and source food locally as much as possible.
Congress has also largely perverted the purpose of SNAP in the conservative zeal to make sure everyone “pulls their weight” that is the result of the erroneous concept that “their” tax dollars pay for the benefits. The original food stamp program was purposed to avoid hardship for poor and working middle class consumers as a result of price supports for farmers. Most of the poor and lower middle class qualified for them simply as a matter of wise economics, and they weren’t even classed as welfare, being part of the agriculture budget, not assistance to the poor.
The corporate farmers have not lost any benefits to keep their businesses profitable, so the benefits should be available to those who need them to maintain any dignified lifestyle. This is even more true when one considers that America throws away as much as 40% of the food it produces after it has made the investment in land and resources to grow it. The only thing missing to make it possible to assure all children and the poor of a nutritious diet is money, which is actually the one commodity we can never run out of and costs us nothing.
That brings us to #5 and my objection alluded to above.
The federal government never “has” or “doesn’t have” money, simply because it doesn’t need it as the monopoly issuer of the currency and accounting for money in the government sector is a nightmare and can’t comply with dual entry spreadsheet accounting that is used worldwide to track money. When money is created in the private sector for government spending an opposite entry is made in the government sector and labeled “debt”. These accounting entities (which is all money really is) balance each other to zero whenever they meet in the same sector, effectively destroying both.
Destroyed money cannot “fund” anything once it reduces the debt, so no one’s taxes “fund” welfare. Taxes (and bond receipts) can only draw down currency in the private sector as inflation control and to accomplish social goals. They cannot “fund” spending because the spending must happen first or there is no currency in circulation with which to pay taxes or purchase bonds. Government spending literally funds both, not the other way around. This may seem like reaching for straws, but it is critical to understanding our monetary system, which should be prerequisite to any analysis attempt.
Once we understand this we are very close to a major epiphany concerning our economy. It is just an extension of logic from these truths to realizing that deficit spending is required to provide fuel for growth that doesn’t depend upon private bank debt. A balanced budget is an effective 100% tax rate, clawing back all payments to the private sector for the resources needed by the government. Without injections of high-power currency, there is no “store of value” vehicle for commerce or to net retire private debt. Only deficit spending becomes private sector assets. If we have a problem with repaying Treasury bonds (which we can’t have as long as our debt is denominated only in the dollar that Congress can create without revenue restraint) we should stop issuing bonds, not stop spending for the public purpose.
