The Freeman 1972 - The Ludwig von Mises Institute

266 THE FREEMAN May1960, to 9,540,000 in 1968, to 12,­912,000 in September 1970, and to14,480,000 in September, 1971.Because payments to individualskept increasing, total expendituresfor relief grew still faster. Here isa condensed record:FiscalyearAll Funds(000)Federal Funds(000)193-6 $ 349,892 $ 20,2021940 1,123·,660 279,4041945 1,028,000 417,5701950 2,488,831 1,095,7881955 2,939,570 1,440,7711960 4,039,433 2,055,2261965 5,868,357 3,178,8501970 14,433,500 7,594,3001971 18,631,600 9,932,000Sources: U. S. Department of Health, Educationand Welfare, NeSS ReportF·5 July 6, 1971;. and Social· SecurityBulletin, December, 1971.In the fiscal year 1971, relief expendituresof $18.6 billion wererunning at more than four timesthe rate of 1960, more than sixteentimes the rate of 1940, and morethan 53 times the rate of 1936.To economize on figures, I havenot only confined myself to fiveyearinterval comparisons, but Ihave not shown the division betweenstate and local funds. Yetthese comparisons are part of theexplanation of the skyrocketinggrowth of these relief figures. Itwill be noticed that while the Federalcontribution' to direct reliefexpenditures was only 5 per cent in1936, it was 25 per cent in 1940, 44per cent in 1950, and 53 per .centin 1971. Yet.relief was actually ad-ministered at the state and locallevel. In fact, it was for the mostpart administered by the cities andcounties. The localities contributedonly 26 per cent toward the totalcost of the relief they handed outin 1940, only 11 per cent in 1950,13 per cent in 1960, and 11 per centin 1970. When a city governmentis contributing only 11 cents of itsown for every dollar it pays out torelief recipients, it can distributeits political favors cheaply, and haslittle incentive to exercise vigilanceagainst overpayment and fraud.Most of those who discuss themounting cost of direct relief treatthis figure in isolation as if it representedthe total cost of "the waragainst poverty." In fact, it is onlya small fraction of that cost, recentlyrunning in the neighborhoodof not much more than a tenth. Thefollowing figures are from an officialtable of "Social Welfare. ExpendituresUnder Public Programs."lSocial Welfare Expenditures(in millions of dollars)State andYear Total Federal Local1935 $ 6,548 $ 3,207 $ 3,3411940 8,795 3,443· 5,3511945 9,205 4,399 4,8661950 23,508 10,541 12,9671955 32,640 14,623 18,0171960 52,293 24,957 27,3371965 77,121 37,720 39,4011968 113,839 60,314 53,5251970 145,350 77,321 68,0291971 (p.) 170,752 92,411 78,341