Welfare programs may well be the most unpopular of all government initiatives-criticized by the social scientists who observe the effects, disdained by the taxpayers who pay the bills, and even unloved by many of the people who collect the benefits.

Thirty years and $3.5 trillion after Lyndon Johnson fired the first shot in the War on Poverty, the enemy has won. The poverty rate, which fell dramatically in the 20 years before the "war" began, has been essentially flat to slightly higher ever since. A new consensus seems to be emerging from among those who work closely with the poor: welfare has made worse the very problems it was intended to cure, and created a few new ones along the way.

Welfare perpetuates poverty, undermines the work ethic, breaks up families, and promotes illegitimacy. The Maryland State Conference of the National Association for the Advancement of Colored People (NAACP) even argues that welfare "is a major contributory factor to the crime problems we face today." Unlike private efforts that stress character-building, one-on-one mentoring and a spiritual dimension, the impersonal public dole does nothing to resolve the behavioral poverty that keeps millions in demoralizing dependency.

Recognizing this reality, the Engler administration embarked in 1991 on what has become one of the most ambitious efforts to reform welfare in the 50 states. The administration abruptly ended the General Assistance program for able-bodied, childless adults in October 1991. It adopted a "social contract," whereby welfare recipients are expected to seek work, go to school, or perform community service work in exchange for their benefits.

To encourage productive work, the administration is permitting recipients to keep more of their earnings without having that income count against their welfare check. Before this change, the tax-free value of AFDC, food stamp, and Medicaid assistance for a family of three in Michigan (about $1,000 per month) was roughly equal to the income that could be earned at a minimum wage or entry-level job-hardly a situation that recommended work over welfare.

These and other changes produced tangible results. Nearly 25 percent of Michigan's AFDC (Aid to Families With Dependent Children) recipients are working, which is three times the national average and up from 16 percent just two years ago. Average earnings from work and hours spent in volunteer activity are up as well. Fewer families are receiving assistance than at any time since 1989.

While those results are welcome, it's too early to break out the champagne for at least two reasons. First, a good share of the progress cited may actually be due to an improving economy and could evaporate with the next recession. Second, many of the gains to date were the relatively easy ones to achieve. Without sweeping change, problems inherent in the welfare system will continue to fester and make it difficult to produce further real progress.

Governor Engler himself expressed a healthy skepticism about government welfare programs when he told ABC's David Brinkley on November 27, "Replacing liberal micromanagement with conservative micromanagement would only be a slight improvement; it's time for wholesale reform." For starters, Governor Engler wants the federal government completely out of the welfare business. It ought to be turned back to the states, he says, where government is closer to the people and where the real innovation in welfare reform has been percolating anyway.

Replacing federal reform with state reform will not go far enough, however, unless it further reduces the role of government and makes assistance to the needy a private initiative. In the words of John Fund of the Wall Street Journal, "Ask yourself: If you had a financial windfall and wanted to help the poor, would you even think about giving time or a check to the government?"

The privatization of welfare could be pursued in any number of ways. The cold turkey approach would be to simply abolish it altogether and hope that families, churches, and charities would take up the slack. Though the response might pleasantly surprise many who think government is the only game in town, a less painful transition to a privatized scenario could involve more generous tax incentives for donations to private groups that work to alleviate poverty. Or, state and local government might contract out to such groups; that happens now with great success in child foster care, for instance. Those seeking public assistance could be given a choice between government welfare (which is likely to become increasingly proscriptive and punitive) or private programs that offer personalized help.

The present welfare system has produced such disastrous consequences that it's hard to imagine how a radical overhaul could do worse. If we nurture the spirit of self-help and the idea of neighbor helping neighbor, we might end up spending less for success than government spends now for failure.

True welfare reform may actually mean learning to trust ourselves again. That would indeed be revolutionary.