At some point in the 1990s, the central Chinese government made it so that profitable things like factories didn’t benefit local government revenue as much because it started going to the central government instead. However, the local governments could still make money by leasing land, and they could make a lot more money leasing land if they built a bunch of cool and useful stuff, making the land more valuable.
When the government hires private contractors to deliver welfare, often these companies essentially steal people’s benefits through a variety of mechanisms.
When the government makes applying for welfare hard, they mostly just waste a lot of people’s time and make it so people who qualify for benefits do not get them because the application is too burdensome. Such qualifications don’t boost employment, they just make poor people suffer more.
It’s easier to get subsidies that mostly go to those with higher incomes.
When you make qualifying for benefits difficult, you make it harder to track fraud. The biggest fraudsters are organized actors that know how to get around complex requirements. More fraud is doctors and wealthy people cheating on payments and tax subsidies, than poor people cheating to get food or healthcare.
We can hope that Trump’s corruption and authoritarian tendencies are gone with him, but the damage done to the government’s ability to implement policies that help those in need, protect people from the powerful, and invest in the future…this destruction will be difficult to rebuild.
Congress was warned well ahead of time about how the lack of regulation and transparency would lead to a great crash when many big institutions were all making the same bets and making the same assumptions. Congress didn’t listen. They listened to the Ayn Rand follower Alan Greenspan instead.