But in 2010, I had several employees in R&D mode, my net income was nearly zero, I fell below the poverty line. I actually qualified for some government handouts. That is seems absurd to me.
First of all, you were a rare edge case, so I don't think its "ridiculous" that you qualified for handouts. Your a really strange edge case if you're floating R&D people and your accountant told you not to pay yourself a salary at all for 2010. I think that if every person in America that was in your boat took advantage of the hand outs, its effect would be negligible.
Secondly, lets say you continued to operate this way until you lost the house and car, wouldn't it be nice to know that you could just walk down to the benefits office and file for benefits.