Acton Institute Powerblog

A $1 Trillion Reminder That Welfare is Failing

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1-TrillionIf you are looking for good data to provide a reminder that America has lost the “War On Poverty,” Michael Tanner has compiled helpful information explaining the current state of the union in the study titled, “The American Welfare State: How We Spend Nearly $1 Trillion a Year Fighting Poverty — And Fail.” Tanner begins by noting that we are now at a point where annually,

[T]he federal government will spend more than $668 billion on at least 126 different programs to fight poverty. And that does not even begin to count welfare spending by state and local governments, which adds $284 billion to that figure. In total, the United States spends nearly $1 trillion every year to fight poverty. That amounts to $20,610 for every poor person in America, or $61,830 per poor family of three.

While welfare spending has continued to increase, poverty rates in America have basically remained the same as they were 40 years ago. In fact, though we as a nation have spent nearly $15 trillion in total welfare spending since Lyndon Johnson declared war on poverty in 1964, several families in rural and inner-city America continue to be trapped in generational cycles of dependency. Something is not working.

Since President Obama took office, federal welfare spending has increased by 41 percent at a rate of more than $193 billion per year, according to the report. Much of this spending goes to feed the bureaucratic monster designed to administer public assistance. For example, Tanner notes that “six cabinet departments and five independent agencies oversee 27 cash or general assistance programs. All together, seven different cabinet agencies and six independent agencies administer at least one anti-poverty program.”

To make matters worse, it seems that the more we spend the more dependency we produce. For example, at least 106 million Americans receive benefits from one or more of these welfare programs. That’s nearly one-third of the U.S. population. Medicaid leads the assistance programs, dispensing benefits to roughly 49 million poor Americans.

The Food Stamp program is America’s second largest, involving nearly 41 million Americans, about 15 percent of the population, who look to the government for food. This is the largest percentage in American history. Millions and millions of our fellow citizens receive some form of assistance from the remainder of the programs. Given the expenditures likely to come with the implementation of Obamacare, the United States of America is trending closer and closer to officially becoming a welfare/social assistance state. The U.S. government lost the War On Poverty and we are all paying for the collateral damage.

In Centesimus Annus (1991), Pope John Paul II reminds us of the dangers posed to our future when those on the margins turn to public government social assistance as a primary means to sustain life. The way we think about helping the poor not only undermines civil society: it wounds the human soul.

Malfunctions and defects in the Social Assistance State are the result of an inadequate understanding of the tasks proper to the State. Here again the principle of subsidiarity must be respected: a community of a higher order should not interfere in the internal life of a community of a lower order, depriving the latter of its functions, but rather should support it in case of need and help to coordinate its activity with the activities of the rest of society, always with a view to the common good.

By intervening directly and depriving society of its responsibility, the Social Assistance State leads to a loss of human energies and an inordinate increase of public agencies, which are dominated more by bureaucratic ways of thinking than by concern for serving their clients, and which are accompanied by an enormous increase in spending. In fact, it would appear that needs are best understood and satisfied by people who are closest to them and who act as neighbours to those in need. It should be added that certain kinds of demands often call for a response which is not simply material but which is capable of perceiving the deeper human need. One thinks of the condition of refugees, immigrants, the elderly, the sick, and all those in circumstances which call for assistance, such as drug abusers: all these people can be helped effectively only by those who offer them genuine fraternal support, in addition to the necessary care.

Currently America’s welfare programs are not designed to lift people out of poverty but to simply make long-term poverty more comfortable. Unless radical changes are made in how we think about helping the poor, America will continue to waste trillions of dollars and fail the families that desperately need help.

Anthony Bradley Anthony Bradley, Ph.D. is Associate Professor of Theology and Ethics in the Public Service Program at The King's College in New York City and serves as a Research Fellow at the Acton Institute. Dr. Bradley lectures at colleges, universities, business organizations, conferences, and churches throughout the U.S. and abroad. His books include: Liberating Black Theology: The Bible and the Black Experience in America (2010),  Black and Tired: Essays on Race, Politics, Culture, and International Development (2011),  The Political Economy of Liberation: Thomas Sowell and James Cone of the Black Experience (2012), Keep Your Head Up: America's New Black Christian Leaders, Social Consciousness, and the Cosby Conversation (2012), Aliens in the Promised Land:  Why Minority Leadership Is Overlooked in White Christian Churches and Institutions (forthcoming, 2013). Dr. Bradley's writings on religious and cultural issues have been published in a variety of journals, including: the Atlanta Journal-Constitution, the Detroit News, and World Magazine. Dr. Bradley is called upon by members of the broadcast media for comment on current issues and has appeared C-SPAN, NPR, CNN/Headline News, and Fox News, among others. He studies and writes on issues of race in America, hip hop, youth culture, issues among African Americans, the American family, welfare, education, and modern slavery. From 2005-2009, Dr. Bradley was Assistant Professor of Systematic Theology and Ethics at Covenant Theological Seminary in St. Louis, MO where he also directed the Francis A. Schaeffer Institute.   Dr. Bradley holds Bachelor of Science in biological sciences from Clemson University, a Master of Divinity from Covenant Theological Seminary, and a Doctor of Philosophy degree from Westminster Theological Seminary.  Dr. Bradley also holds an M.A. in Ethics and Society at Fordham University.


  • Bill Hickman

    Why does this logic only apply to the government? Private charities have also been “waging war” on poverty for years. Since poverty persists, should we conclude that private charity is ineffective? By the logic of this post, the answer is yes. Of course that makes no sense. The world is complex. Federal action against poverty, particularly cash transfers, while not extinguishing poverty, have definitely helped in many ways.

    There is fairly strong empirical evidence for this. For example, poverty among seniors has fallen steeply over the last 50 years. For conservatives, this shouldn’t should be counterintuitive, since the nuclear family has also dissolved over the same period. Why the drop in poverty rates? We started sending seniors Social Security checks in the mail.

    Our priors against the federal government shouldn’t be so strong that we’re unable to acknowledge this.

  • I find the one sides view of the failure of the war on poverty to be offensive. This article seems to assume that the only variable in alleviating poverty is what gov’t does. And since there is more poverty, obviously gov’t has failed. Certainly our economic isn’t to blame nor is our ever increasing military and defense spending not to blame either, that is unless you read Martin Luther King. King saw the beginning of the failure of LBJ’s War on Poverty when he noticed increased spending on the Vietnam War. He concluded that gov’t would never have the resources to lift people out of poverty for as long as programs of social uplift had to compete increased defense spending.

    At the same time, King challenged both private and public sector employers on how much they pay their full-time employees. He condemned those who paid part-time wages to those who required full-time hours from their workers. We should note this because over the past few decades, income for most Americans has stagnated or dropped while income for the top 5 to 10 percent of Americans has increased. And if you add to that the outsourcing of jobs overseas, technological unemployment, an economy that is dominated by financial services, and the new culture of maximizing profits, we begin to get a broader picture of why poverty persists in this country.

    Since the 70s, we have seen a massive redistribution of wealth in this country. Only the redistribution is not pointed toward those with less, it is the result of the consolidation of wealth by a few at the top. And unless one believes that the infinite can come a finite earth and finite creatures, we have to realize that at some point, the more some hoard for themselves, the less there is for the rest.

    • LT

      First, “part time wages” is extremely contextual, and relies mostly on the cost of goods and services. So to say that employers should pay full time wages to workers doesn’t have any meaning until we first examine the context and the labor. It must also be considered against the job and the service or good provided. Case in point, arguing that McDonald’s workers should be paid $15 an hour is nonsense. It is not a $15 an hour job. It is an entry level job that should be low paid. If you have that job for more than a year or two, you are not progressing as you should. When you invoke “stagnant wages,” you fail to compare reality. Most people’s wages are not stagnant over that period of time. The wages for a given job may be stagnant compared to inflation (such as fastfood workers), but it’s not the same people in that job. So their income has actually risen because they have advanced in their jobs.

      Secondly, the redistribution of wealth towards the wealthy is a simple matter of economics. First, wealthy people are wealthy because they produce something someone wants to buy and are willing to give them money for it. And they get wealthier because people keep wanting to buy their products or services. The reality is that if you took all the money in teh country and divided it evenly among the citizens, within a short period of time things would be back like they are now.

      In the end, the government’s job is to level the playing field, not to level players. The fact remains that the war on poverty has not helped, and in fact, has increased the problem. Living in an declining urban area, I see that very clearly. We might need to address wages, wealth, etc., but don’t we need a better approach?

  • Kelly

    Bill, you clearly missed the entire point of the article. The arguments made in the article are not addressing private charities because those are optional programs. The point you’re missing is that Federal programs are not optional, every tax paying citizen is forced to transfer their wealth to another, and because of this, it is our job to ensure that they are effective. I don’t care if a charity that I do not donate to isn’t effective, which is why I only donate to those with tangible results (as well as the Govt, but I have no choice).
    If you bothered to read the report, you would see that welfare spending has increased from $200 billion to nearly $1 trillion with no noticeable effect on poverty rates. I assume you don’t have an important job, given your poor grasp on investments and returns, but I am a finance professional, and if I invested in a company that went from expending $200 billion/year to nearly $1 trillion/year with no noticeable increase in value, I’d be the worst finance professional there ever was. This is exactly what we’re doing with welfare. Increasing spending dramatically with no results to show for it. There is fairly strong empirical evidence for this, and it is in the report. Moreover, regardless of whether or not welfare has lifted a few seniors out of poverty, it hasn’t been enough to change rates at all, nor has it actually created long-term solutions for seniors (much less anyone else in the program), it has simply given them my money. Now if you think it is $1 trillion well spent to help reduce poverty in seniors, then I guess my suspicions about your weak understanding of investments is correct.

  • LT

    No, I think you missed the point. There is no such thing as a full time wage or a part time wage. There is only a wage for work. There are full time jobs and part time jobs, depending on the type of work, and what is needed from it. There are entry level jobs and advanced jobs. The problem is that people want entry level jobs (with their few requirements) to payvthe same wages as advanced jobs (that require
    training and experience). No economy works that way.

    The reason why $15/hour for McDonald’s worker is nonsense is because it is an entry level job that requires little more than being able to show up and learn a few basic things. It isn’t a job you should have for more than a year, unless you are in high school just picking up spending money.

    We haven’t relegated the laborer because of low regard for the work. We have simply measured the work product and it’s value. The fact is that a wage is sustainable only when the product produced can pay for it. No business exists to lose money. So they can’t pay workers at a level that they cannot sustain. If a McDonald’s worker wants $15/hour, they need to go get a job that merits that pay. That, in turn, opens up a job for a high schooler, or some other entry level worker.

    My values aren’t putting people into poverty. In fact, I haven’t even stated any
    values. I have only pointed out the reality. And you know this. It’s why, all other things being equal, you will buy your gas at the station where it $3.00 a gallon instead of the one across the street where it is $3.10 a gallon. But you might drive five miles out of your way to buy it at a station where it is $2.50 a gallon. It is because you recognize the basic principle behind labor. Labor is a commodity. All other things being equal, you pay the lowest you can for it.

    Think of it this way: If you are having home remodeling done, given the option
    between two identical jobs, you will choose the lowest bid. However, you might pay more if one of them has twenty years experience and the other is in his first year. You might pay more to the one who has thirteen good references rather than the one who has three bad ones. So it is with labor.

    I agree that we need to fix it. But this is why the market works: It fixes itself. Someone who does bad work soon doesn’t have a job. Those who do good work, have better jobs with better pay.

    Go to YouTube and look at some of the videos by Thomas Sowell and Milton Friedman. And start examining the way you shop (or sell things at your garage sale), and then ask why labor should be any different?

    There is no real secret as to why the war on poverty failed. It failed because it didn’t address causes. It tried to address solutions. You don’t solve poverty by giving people someone else’s money. You solve poverty by teaching people to work and making it possible for them to do so, thereby making it possible and advantageous to maintain a traditional family structure in which these values are taught. Giving money to people doesn’t do that.

    • If I missed the point, so did Martin Luther King as he observed the pay scale workers were being paid when he spoke about it..

      The real issue is whether some are defending low wages so that others may financially benefit from the working poor. The consolidation of wealth at the top is partly because we look down on people for certaion work and say that is what they deserve. At the same time, we accept the current economy as being canonical and thus our criticisms are always placed on those who are exploited.

      That is what you are doing here by declaring “we have simply measured the work product and its value.” No we haven’t, but those with wealth and power have. Perhaps reading James 5:1-6 will tell us what happens when treat workers unfairly for our own benefit. Or the book of Amos can do the same. And realize that consolidating wealth by exploiting workers is giving the wealth that belongs to the workers to those who already have more than enough. And it seems that for you, only those who have wealth and power are qualified to determine the value of everybody else’s work.

      • LT

        Again, consider your own shopping practices. Are you looking down on someone because of their work when you buy gas for $3.00 instead of $3.10? Of course not. And you have the power to determine the value of one station and its workers over another. You, in that case, have the wealth and power, and you get to choose how to spend it. The fact that you don’t think it is wealth and power means you don’t understand the issues.

        And so if you will choose a cheaper price for something, why shouldn’t an employer be able to do the same? Why do you insist on a freedom for yourself that you do not insist on for others?

        No one should be underpaid. But no one is. Everyone is paid what they are worth, both in their own estimation as well as in the estimation of the employer. If a person thinks they are worth more, then they should show that to be the case. But the problem, in most cases, is that they have a job for which there is plenty of supply. And supply always drives the price down. If you go to your employer and say, “I want a raise of X,” he will tell your work is you are worth that to him. And then you, by staying or leaving, will tell him if your work is worth that to you. If you think your work is worth X, then you need to find someone who needs your work who agrees with you.

        That’s the way all shopping works. There is a reason I have never paid $30,000 for a car. I have yet to come across a car that is worth that much money to me. Now, others have paid that much for a car because it is worth it to them. I, on the other hand, have paid $100 for a single round of golf. Why? Because it was worth it to me. Most people do not consider that a good value. But it was to me. And you shop exactly the same way for everything, aside from public utilities which are set; however, even in that you choose to pay the prevailing electrical wage rather than live by candles and oil lamps; so you have still made a decision about what it’s worth.

        You talk of treating workers unfairly. No one should exploit workers. But no one can. If an employee isn’t willing to work for X dollars (whatever X is), then they can leave and go get another job. If working for X (whatever X is) is unfair, they are welcome to leave. If it steals their human dignity, they can defend their dignity by leaving.

        Again, it is simply to go and watch Thomas Sowell or Milton Friedman on these issues to begin to understand how the economy works. It will be worth you time, and it will also help you to help others.

        • LT,
          Yes, I do look down on them if their buying gas at a rate that depends on the exploitation of others. See, our problem is that we say law, which is often written by those with wealth, is the only control for our greed. We will soon discover that such a shortsighted view, the view that says I am only responsible for myself, creates monsters in our own image that devour everything.

          IF you want to say that everybody is paid by their worth, certainly an ambiguous statement, then you are saying that the people who make our clothes and pick our food and make our electronic equipment are worth very little. Because such make up a great proportion of the either the working poor or sweatshop labor. And if they are worth that little, we are nothing but beneficiaries of slaveowners.

          Your arguments rest on the assumption that your system is just. There is too much evidence that says otherwise.

          • LT

            Again, still having significant issues with reality. How do you buy gas? The cheapest place? Or the most expensive? Only if you buy gas (or anything else) at the most expensive place are you living up to your profession here. Because any time you pay less for something, you are taking away from somebody’s wages.

            I don’t think law is the only control for greed. I think law cannot address greed. Only internal change through the gospel can.

            When I say everyone is paid by their worth, I mean the worth of the job. There is a reason why janitors get minimum wage and CEOS get millions. It has everything to do with their respective value (worth) to the company. The people who make our clothes and our electronic equipment have a job that is worth very little (although in their world, it is worth more than other jobs they can get). Why? Because someone else can do it.

            You can call “my system” unjust, but it’s not my system. It is basic economics 101. It’s the way the world works, and you contribute to it by your very existence. As for justice, it is generally just. It pays people according to the value of their job. It doesn’t pay them more than their job is worth and it doesn’t pay them less. It is the textbook definition of just. Now, to be sure, things affect that, like unions who essentially cheat to drive market labor wages up, or companies who skimp on products to drive costs down, and other things. But generally speaking, the system is just.

            It’s why you don’t pay $1000 to have the oil changed in your car. That would provide a nice wage for someone, but you know it isn’t worth that. But chances are, you pay somewhere between $20 and $50 for that oil change. Why? Because you know it is worth that. Or it’s why you wouldn’t pay $10,000 for a 1986 Honda but you would pay $10,000 for a 1986 Rolls Royce. You understand that value is different for different things. And yet you ignore that when it comes to labor. Labor is a commodity that is bought and sold. The worker sells 8 hours of his life in exchange for X dollars. The employer pays X dollars in exchange for 8 hours of a worker’s time. When they agree on X, they have a job relationship. If the worker sells his time for X+3 and the employer buys time for X-3, they have a problem, and they both move on. Until the worker finds out no one value his time for X+3 and so he has to take less, or until the employer finds out no one values their time for X-3, and so he has to pay more. It’s basic economics. It’s the way God created the world to work. Yes, greed and fallenness has affected it, but the basic principles are still the same.

            Have you taken any time yet to go and view Milton Friedman or Thomas Sowell on this? If not, you are really ill-equipped to participate in the conversation. You are speaking with a lot of emotion, but there are some very basic facts that you live by every day that you are ignoring.