Yeager,
I think you really bring up a bunch of good points. The one I particularly like is the fallacy of spending money on poverty. People think that spending money on poverty is a good thing without any consequences. People think that the more you spend, the better the situation will be. Nothing could be further from the truth.
I have a terrific income, before I strived for early financial independence I would invest X dollars, spend Y dollars on basic necessities, and everything extra I would spend how ever I chose. Basically every extra dollar I had went back into the economy. It provided money to flow through the different businesses and their employees increasing the wealth of everyone involved. Then the Affordable care act came around. I found my tax burden to increase by $8K every year not to mention the thousands extra I now pay for health insurance which is worse than before. Now instead of spending it in the community it gets trickled through the government process. I'm sure we can all agree that government is not efficient and will waste a good chunk of my extra taxes before it even hits the final recipients.
My question is, would that $8k be better served in the community or in the hands of government? I think it is the former. Interestingly if everyone functioned like this, the government would still get pieces of that $8k anyways through sales tax, through income tax on the business owners who sell me those goods and services, and through the need of more employees to handle the increased demand.
Disclaimer: Today I spend a whole lot less as I am seeking financial independence earlier. My goal is to stop producing as soon as possible and cut my rediculous tax payments.
Of course there's waste in the government. Then again, there's no business incentive to give someone with a pre-existing condition health insurance, or to give poor people food, clothes, or shelter. Charity is a great thing, but if charity were enough the government programs wouldn't exist because they never would have been needed.
I'd bet you've met a few people who were given the opportunities to become successful with help from these programs. They may not advertise it, but they do exist.
As to what the acceptable cost+waste vs return is on these things, that's an interesting discussion. I will say that someone making a million dollars a year paying extra taxes doesn't really pass the sniff test for me as far as "too expensive!"
Someone is getting a bit screwed no matter what, for what I see it's two options:
1. The guy making $2 million/year only gets to keep $1.2 million. He still has $1.2 million, but he did lose $800k. That sucks. A good bit of that $800k is wasted or goes to people who don't deserve it and will spend it on booze and cigarettes, that's frustrating as hell. But he still makes $1.2 million a year.
2. The guy who went to a crappy elementary school and had a single mom who is not well educated, and had to start working at McDonalds and Wendy's at age 16 to help his family pay for food. He doesn't have any time to learn a trade or go to school because he's too busy surviving. His upward prospects are approximately 0 without an education, and his chance for education is approximately 0 as long as he has to scrape by on two part time jobs that can fire him any time, for example if he has a health issue. Or maybe it's someone who isn't super educated but had a bout with cancer while a child, and her parents' insurance covered her. Now she's turning 26 and is off the parents plan, but hasn't been able to find a job that gives health insurance for any number of reasons. If the cancer comes back she's dead.
Now, if I have to pick which of these two people gets "screwed" a little bit, I'm going with option 1. Yeah, it's really frustrating to see someone on youtube bragging about their welfare while they have a Rolex watch and Prada purse. It's MORE frustrating to see someone with great potential waste it because they never had a proper chance.