What happened is addiction. Not on the part of the homeless and poor, but addiction to money on the part of the government employees, social service contractors, so-called non-profits who pay their top managers and directors great salaries, all to "help" the homeless and poor.
Very little of the money actually winds up in the hands of the people it is supposed to help. Structural solutions that could mitigate the problem are shunned like the plague as it would eliminate their gravy train. You're looking at 4-6% of the economy that would go down to 1-3% if we implemented real solutions. Understandably, those involved in that sector are going to fight real solutions big time.
You have identified the problem of ‘big government’ concisely.
What services exactly do all these ‘paper pushers’ perform? Perhaps they should be assigned to 5-6 homeless people and ensure they have shelter, clothing and food until they find employment. Salaries based on positive/negative outcomes.
Productive citizens are the hostages of Government through taxation, so government employees’ earnings should be based on production.