Like most everything the government does, it fights poverty poorly. From Lee Friday at mises.org:
Fighting poverty is a favorite pastime of government because politicians get to portray themselves as champions of the poor. However, the unfortunate few tend to be far fewer in number when aid is extended privately instead of through tax funded programs.
Government Bureaucracies Benefit from Welfare Programs
Coercion is used to acquire the revenue (taxes) to finance welfare programs. As evidenced by the commission it retains prior to redistributing this wealth, government bureaucracies are one of the beneficiaries of these programs, and thus highly incentivized to claim a perpetual need for the programs. I live in Canada, where the number of federal government welfare program employees increased by 43% between 2006 and 2012. Clearly, it serves the interests of politicians and bureaucrats to create (impose) a culture of dependency. As Murray Rothbard wrote in For a New Liberty:
Since welfare families are paid proportionately to the number of their children, the system provides an important subsidy for the production or more children. Furthermore, the people being induced to have more children are precisely those who can afford it least; the result can only be to perpetuate their dependence on welfare, and, in fact, to develop generations who are permanently dependent on the welfare dole.
Economist Thomas Sowell wrote:
The black family, which had survived centuries of slavery and discrimination, began rapidly disintegrating in the liberal welfare state that subsidized unwed pregnancy and changed welfare from an emergency rescue to a way of life.
The government exacerbates the problems it is supposedly trying to solve.
Why Private Aid is Superior to Public Aid
Drawing on the work of David Beito, historian Hildegard Hoeller describes the presence of decentralized systems of mutual aid:
Regardless of where they came from, the members of nearly all ethnic and national groups erected formidable networks of individual and collective self-help for protection. These social welfare systems fell into two broad categories: hierarchical and reciprocal relief.
To continue reading: Get Government out of the Welfare Business