That is actually incorrect. There are merit and demerit goods that wouold not be supplied if left to the free market. That is why the government intervenes.
That is because you underestimate the power of Capitalism. The thing is, people WOULD fill the needs of the poor, especially if the poor come around and ask for help. The Salvation Army does not have the resources to fill the needs of all the poor in America because people depend on welfare and so fewer people see the point in donating cause the government already forces them to. If the welfare system went away, people would suddenly give tons of money to Salvation Army like places because they would think that the poor have nothing anymore.
Then why not stop all taxatin and let the free market get on with it? Because the system doen't work like that. The unegalitarian spread of wealth is a symptom of unrestrained capitalism. By its very nature, for every wealthy individual there will be a very poor individual-who works just as hard. Why? Because it is a recipriocal system.
Who told you that? Actually, it might seem like a recipriocal system on the outside, but really, Capitalism/free market is an extremely fragile equilibrium, which, when touched by the government, will fail to do its job. Take minimum wage for example. What is the point of it? Because of minimum wage, a store owner cannot offer jobs like sweeping floors to people, because he has to pay them more than he wants to. Thus, he must give the little jobs like that to another one of his employees, so there are fewer jobs. If somebody wants to underpay an employee for his/her work, then the employee, if dissatisfied with the wage, will leave to find a better offer. That is the beauty of capitalism! Somebody is eventually going to find a place where the balance is off, and they will offer whatever for less. If a big company becomes a monopoly and they start selling for too much, somebody will come along and start a business selling stuff for less, cause they see an opening for some good profit. If the government messes with anything, really, it is just making it worse. Stock markets might crash, economy might go bad, but a true free market will always right itself unless some outside force influences it (war, high taxes, bail outs, etc.).
As for your large family example, you cannot base government policy on a case study of one famly. It lacks ecological and populatoinal validity for one thing. They do not represent the majority of people on Welfare.
Oh, you want more? I can give more examples if you want. My point was, you assumed that children in a large family will be emotionally lacking; I was showing you that that is not true. Go back a few centuries. People then had huge families! Benjamin Franklin had 16 siblings. George Washington had 9. Even Charles Darwin had 5! Having a large family doesn't mean that a person will be disordered or whatever.
I acknowledge there are problems with welfare, but getting rid of it completely is ridiculous.
I agree. Too many people depend on it, and some people would probably die before they could get used to working/using the support of charities to live. Too many people would be opposed to getting rid of welfare.
Despite their birth rate dropping, that is not the reason their economy is faltering, that is the world financial crisis which has completely unrelated causes. Before the crisis, China's economy was doing well, and its birth rate was as low as it was now. You cannot instantly associate the two variables. America gets enough immigrants each year to fill the gap anyway.
There is your problem! You assume that China's economy was doing well before the crisis, thus they were fine. Nothing could be farther from reality. Outwardly, they might have been doing fine, but does that mean they were not headed straight for a big problem? I know this is a weird example, but if a 2 ton anvil was falling straight for your head while you were sleeping, but you are not dead yet, does that mean everything is okay? Do you see what I am getting at? Also, America does not get enough immigrants, at least not since they put a limit on how many could come in every year.
You realize that the world population has grown by 4.5 billion people in 50 years, right? If we continue at that rate, we'll cap off at about 30 billion and from there all hell will break loose. A lot of scientists estimate that the world is only sustainable (meaning that we can use the amount of resources necessary for us, as well as ensure the well-being of future generations) for about 2 billion people.
So they are saying that it would be best to kill off all except 2 billion people on the earth? Wow. On the other hand, I think that humans will always find enough to sustain their needs. Thirty billion is amount scientists estimate the earth can sustain using the resources we have at hand. By then, humans could find new ways to get resources. Back in the middle ages, they didn't have genetically enhanced wheat and steel plows. What makes you think future generations won't be more advanced than we are now? Besides, there will always be other planets we could colonize. My point is, there will always be more when we need it; somebody will find a way to get more.