There may be no such thing as a "free lunch", but there is such a thing as making someone else pay for it. The question is, how long can the game continue before it finally collapses?

"Money taken from workers and investors* and transferred to the non-working spenders is not "income". It is [merely] redistribution from producers to non-producers... Government transfer payments have doubled as a proportion of "income" in the last forty years. The increase since 2000 has been accelerating, up 122% in 12 years versus the 55% increase in GDP. The slight drop since 2010 is the result of millions falling off the 99 week unemployment rolls [after living at taxpayer expense for two years].

Luckily, it is increasingly easy to leave unemployment and go on the dole for life. The number of people being added to the SSDI (disability) program has surged by 2.2 million since mid-2010, an 8.5% increase... Applications are swelling with disabilities like muscle pain, obesity, migraine headaches, mental illness (43% of all claims) and 'depression'... It's like hitting the jackpot, as 99% of those accepted into the SSDI program never go back to work... The SSDI program, costing $132,000,000,000 per year, is now projected to go broke in 2016."

-- Jim Quinn article

Note that the chronically unemployed and the marginally disabled are not the only freeloaders. The paper shuffling, gun-toting "workers" in government bureaucracies are entirely dependent upon transfer payments. Most "investors", bankers, brokers, lawyers, politicians, etc. likewise siphon off vast amounts of wealth without producing anything of real value.

The common factor in each case is government interference, enabling and protecting non-productive activity that would otherwise not be possible, and preventing the opportunity for productive activity that would otherwise be possible in a voluntary society.

UPDATE: In Britain, someone has figured out a simple scheme to reduce the welfare rolls and extract some "community service" labour at the same time. It's not exactly a free market solution, but better than the status quo.

"Unemployed benefit claimants will be forced to carry out unpaid work if they refuse to turn up for two interviews or drop out of work programmes... Those who refuse to take part, or agree but then fail to turn up, have their unemployment benefit stopped for a minimum of three months... Figures show that 20 per cent of those ordered to take part in four-week community projects stop claiming immediately and another 30 per cent are stripped of their benefits when they fail to turn up."

-- London Daily Mail