Welfare systems tend to create poverty rather than to diminish it, by exceeding their role of providing temporary relief to deserving unfortunates. Such systems encourage dependency and permanent entrapment.
In 1990 in the Netherlands, nearly one in seven members of the labour force claims to be incapacitated and unable to work. More than 100,000 extra people are so declared each year. A third of those claiming disability identify psychological reasons, including nervous exhaustion. Each receives 70% of their previous salary. A 1992 study found 13.5% of USA families on welfare in 1991, and forecasted an upward of one third of all American children dependent on welfare by the year 2010.
Existing welfare systems produce a large stratum of dependents, inclined to the drug culture and to casual relationships and therefore to illegitimacy, family breakdown and crime. They also engender an interested elite by which they are operated and which derive their income and power from them. Publicly financed welfare has meagre results and cannot create affluence.
The OECD study "The Role of the Public Sector" challenges the view that overly generous government welfare programs are eroding the will to work, save and invest.