- waste caused by a bad incentive structure: people spend money most carefully when they are spending their own money on themselves. They spend money less carefully if it is someone else's money, or if it is being spent on someone other than themselves. Money is spent least carefully when it is someone else's money, being spent on others. This status describes welfare.
- moral hazard: you get more of what you subsidize; rewarding antisocial behavior is a bad idea.
- rent-seeking: subsidies create client classes; in democracy those classes can vote and make ending or altering subsidies politically impossible.
The main beneficiaries if we remove Saddam are Iraqis, not American taxpayers. By paying for far more "defense" than we need for defense, we encourage warfare; standing armies get used. And quite obviously the warfare state has created a client class: soldiers, defense workers, and the military-industrial complex.