There is no doubt that we are about to see more people doing it tough in the months ahead. Unemployment will rise and the meltdown will mean that people with investments will see their income shrink. For many, sheer survival will mean looking to the various charities for help.
It is vitally important that the government ensures that those charities have the capacity to meet demand. The problem will be to achieve that without creating a bureaucratic nightmare and miles of endless red tape.
When a government grants money it has a duty to ensure that those funds are protected by rules and regulations - and a reporting regime. What should be simple immediately becomes complex - and attitudes change !
The best charities are funded by good people making donations. In most cases this is money, but there are also charitable minded people in business who donate day old bread from bakeries and left over food from restaurants. This enables soup kitchens to operate on a shoe string compared to anything else run on a commercial basis. The staff are usually volunteers.
The Federal government would be advised to think long and hard about how it helps these regimes. It would be a smart move to by-pass it's own welfare agencies, by-pass giving money to the state governments for distribution - and go direct to the third tier of government - local councils.
Councils are closer to the action. They know who does the best job in helping in their communities - and they are able to keep a close watch on how that money is spent - without the need to be too obtrusive and demand too much red tape.
A fraction of the money needed through usual channels can pay big dividends if allocated through councils - but there is one colossal drawback to this approach.
Government is about politics - and if money is handled by local councils the kudos does not go to the political party originating the scheme. For that reason, governments tend to prefer the direct approach - with an army of PR consultants trumpeting the benefits and a blaze of publicity applauding the generosity of the donor.
Nomatter how bad things get as a result of this meltdown - nothing will be more important to a politician than the measures necessary to be re-elected !
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