Welfare and Welfare Fraud

According to Currie (2006) welfare is the provision of a level of support for persons who can’t meet basic needs for their well-being and social aspects. Welfare fraud on the other hand is illegally obtaining the welfare benefits by withholding or knowingly giving false information to obtain more funds than allocated or otherwise would have been allocated as noted by Gustafson (2011).

Black and Sprague (2016) explain the history and how the welfare fraud began by a lady know as Ronald Reagan and the consequence of her action. They further explain the history and milestones of the welfare program. The welfare program began as Aid to Dependent Children (ADC) program to help families that were affected by the Great Depression. However, the ADC program was discriminatory as it was left for states to determine who would benefit and most of the recipients were not the deserving parties.

For example, by 1939 80% of the beneficiaries were white families in the expenses of black families that really deserved the benefits. In 1996 the government tried to cure the welfare queen myth; however, the regulations that were enforced had a negative impact. The new welfare concept expected the worst form the recipients and tried to link poverty to criminal behaviors.

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In summary, Gustafson (2011) tries to a show that the rich and big corporations also receive welfare from the government at the expense of the tax payers. The “welfare for the rich” is received through tax subsidies awarded to various companies and also bail outs when the firms are facing financial difficulties. The various subsides run to billions of dollars. Gustafson (2011) cites that direct tax breaks are estimated at $100 billion annually.

The two articles clearly show that the public are misinformed about the welfare concept. The public is more focused on the welfare received by individuals who can’t afford a decent living rather than the corporations that prey on our tax money and continue increasing their wealth. Black and Sprague (2016) explain a scenario where a politician accused a lady of the welfare program for using the benefits to travel to Hawaii. The benefit the lady was receiving was under the Supplemental Nutrition Assistance Program (SNAP). SNAP can only be used to purchase food products only. This led to a new Federal legislation in 2012 that barred beneficiaries of the program from using the card in casinos, liquor stores and strip clubs. However, research later proved that rarely did the beneficiaries use the cards in those locations.

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The recipients are also required to undergo drug test when applying for the fund. The test has proven to be a waste of resources as only 0.12% of 40,000 applicants tested positive yet $336,297 was used to conduct those test.

The big corporation usually protects their leaders even if they engage in criminal activities. Gustafson (2011) notes that, the bosses go scot free after paying fines and huge fees the government on crimes that ordinary citizens would normally go to jail for.  He cites that JPMorgan Chase was supposed to pay $13 billion; however, through various tax deductibles the corporation was able to save $4 billion.

Both of the articles end with a legislative angle, Black and Sprague (2016) believe that the current policies adopted have brought a mythical stigmatization that relates poverty to criminality. They encourage that the policies need to change for people to understand fully understand the importance of everyone in the society and economy. Gustafson (2011) on the other hand encourages Lawyers and lobbyist to push for reforms in the Federal Internal Revenue Code. He believes this the genesis of all the tax breaks the corporations enjoy at the moment.