Always_Ask_Questions,
“but there is also aspect of dependency on government. as R Shach paskened when Begin became prime-minister – do not take too much gov assistance and dismantle your own financial network. A different government will come, take this away, and you will have no funds. Could the same danger exist in US? If another Republican wave comes in and does another welfare-type reform, limiting assistance to volunteer non-workers, would the system survive?”
I think this is the best argument against using public funds. I believe the government money being discussed in Israel referred to funding for schools. Many in Israel go to Yeshivos that don’t receive government funds, but the families themselves get the child allowances, etc. As far as the U.S. government programs – contrary to Reagan’s welfare queen polemic, the programs help families, but are not typically the ikar of their parnassa. So if they went away, things would become much more challenging, but iyH the “system” wouldn’t collapse.