http://www.scribd.com/doc/110366590...Services-for-People-With-Low-Income-FY08-FY11 In 2011, the govt. spent ~$750B, or nearly 1/4th the entire money spent, on WELFARE. That figure does not include Social Security, Medicare, or veterans benefits. That's up from ~$550B in 2008.
I think people are on welfare for a variety of reasons. While there may be some who are sponges, I'd think that they're far outnumbered by people who are caught in circumstances beyond their control (lack of education, physical infirmities, mental illness...). That said, there's no disputing that the number got bigger when the economy got crappier. Having more job opportunities would certainly seem likely to get some folks off of welfare and back into the workforce, which, I think most would agree is usually a better outcome for both the people involved and society at large.
I think it's fine to help those truly in need. That there's $750B of need is absurd. There's definitely the issue of dependence on the welfare state breeding more dependence. And there's the issue of the massive spending may be keeping people from starving, but it isn't being the "hand up, not hand out" it's advertised to be. In fact, if you consider the many $trillions spent on the "war on poverty" since the 1960s, it's been a miserable failure (as are all govt. "war on fill_in_the_blank" programs).
There is also no question we have a welfare subculture in this country. There have been some interesting articles about Portland and what is estimated to be in the tens of thousands of people who work under the table and collect all forms of welfare. They do quite well for themselves.
I think incentives matter. The results of the 1996 welfare reform legislation would buttress my argument.
There is also a big subculture of slimy business owners. The people paying under the table I'm guessing are also doing quite well and probably better. Who is worse, the person collecting welfare and getting paid under the table or the business owner who pays under the table and avoids paying taxes on employees? Honest question