Welfare State Explained: How Does Government Funding Really Work?

💡 Welfare State Explained: How Does Government Funding Really Work?

I’m all for helping people in hard times, or those who are permanently sick or disabled. In fact, if we live in a wealthy and productive economy, we should be able to help these people and bring them along. That’s part of building a society worth living in.

But here’s the reality most people overlook 👇

The government doesn’t actually produce anything. Every dollar it spends first comes from the private sector—earned by workers, businesses, and innovators. The government only gets that money through:
✔️ Taxation
✔️ Borrowing
✔️ Printing money

Think about it like this: if you earned $10,000, and the government took $5 bikes worth of that to give to someone else… that’s how redistribution works. It’s not creating new wealth—it’s reallocating existing wealth.

This doesn’t mean we shouldn’t support people in need. It means we need to understand where the money truly comes from and have honest conversations about sustainability, fairness, and responsibility.

🎙️ Dive deeper into this conversation on DIOTALK EPISODE #221.