Posts tagged with: Welfare and poverty

Blog author: jcarter
posted by on Tuesday, January 28, 2014

War on Poverty special page article banner“Why, if we have made such great strides reducing poverty,” asks Scott Winship, “is there such widespread belief that, to quote Ronald Reagan, ‘We fought a war on poverty, and poverty won’?”

We won the War on Poverty in the sense that the prevalence of material hardship has declined. According to Meyer and Sullivan, just 8 percent of Americans live at the low standard of living endured by a third of Americans in 1963. But it was a limited and costly victory. Elderly entitlements will bankrupt the country moving forward. Great Society-style no-strings-attached welfare may have had behavioral and cultural impacts that have hurt child opportunity at the bottom. Upward mobility has not expanded. The conservative turn toward welfare reform after 1980 and the limited embrace of a work-promoting safety net by New Democrats produced an important shift in anti-poverty policy, but historically conservatives have not been constructively engaged in formulating a positive opportunity agenda for children at the bottom. That this is changing is the most hopeful sign in domestic policy in some time.

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“Today’s welfare state is largely the construction of decades of liberal political activism,” writes James C. Capretta. “If it is failing, and there is strong evidence that it is in many ways, then that is a stinging indictment of the liberal governing philosophy more than anything else.” He argues for more conservative activism on the poverty problem, particularly in education.

An effective conservative critique of existing policies starts with the acknowledgement that a strong social safety net is a must in a modern, market-based economy, and that the safety net built here in the United States, though flawed, has contributed substantially to improving the conditions for the poor. The official measure of the poverty rate is completely misleading in this regard because it does not include transfer programs or the taxes people pay in the measure of income. So, in a very real sense, no matter how much the government spends, the official poverty rate remains unchanged.

But when tax and transfer programs are factored into the assessment, and when the consumption patterns of the poor are examined and not just their cash incomes, the picture changes quite dramatically. The panoply of governmental support programs—Medicaid, Food Stamps, the earned income tax credit, housing vouchers, school lunch programs, and many more—substantially raise the living standards of those who otherwise have very low incomes. (more…)

Blog author: jcarter
posted by on Wednesday, January 8, 2014

povertyFifty years ago today, President Lyndon B. Johnson gave his 1964 State of the Union Speech, in which he launched the ‘war on poverty.’ Within four years of that speech, the Johnson administration enacted a broad ran of programs, including the the Job Corps, Upward Bound, Head Start, the Neighborhood Youth Corps, the Social Security amendments creating Medicare/Medicaid, the creation of the Department of Housing and Urban Development, and over a dozen others.

Here are a few numbers related to governmental efforts to eradicate poverty in America:

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snapMichael Tanner of the Cato Institute released a recent policy analysis that raises important questions about whether or not we should completely re-conceptualize how to provide food for the truly disadvantaged. In “SNAP Failure: The Food Stamp Program Needs Reform” Tanner argues The Supplemental Nutrition Assistance Program (SNAP) is currently crippled by high administrative costs, significant fraud and abuse, and weakening of standards. Tanner notes that SNAP breeds greater dependence on government, and, even worse, seems to have negligible long-term effectiveness in eliminating food deficiencies for the truly disadvantaged.

The statistics are overwhelming. Using primarily government data, Tanner observes that the poverty is politicized in Congress through the framing of food stamps as fulfilling two separate goals—“improved levels of nutrition” and “strengthening the agricultural economy.” This created the “bipartisan” support that has exploded funding and served the interests of both political parties. Everybody wins, except for the poor. According to Tanner, “Since 2000, spending on SNAP increased from just $17 billion per year to more than $78 billion in 2012, a greater than fourfold increase.” The increase in spending cannot even be blamed on the recession. According to Congressional Budget Office (CBO) estimates, 35 percent of the program’s growth from 2007 to 2011 was not a result of economic factors in the country.

The factors that have created the expansion include:
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poor-taxDuring the government shutdown billionaire philanthropists Laura and John Arnold gave $10 million to the National Head Start Association to keep the program for low-income children running. Mr. Arnold made it clear, however, that he did not believe this was a permanent solution, as “private dollars cannot in the long term replace government commitments.”

But some people thought Arnold’s generosity itself undermined the government’s power. As The Nation’s Amy Schiller said, “The entire shutdown is undergirded by a fantasy of a world in which the government’s power is vastly reduced and private citizens step into the breach with better, more innovative ideas for solving social challenges.”

It’s not that they are against all philanthropy — only the public donations that undermine the government’s monopoly on power. As John Daniel Davidson explains:
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01_16_2011_martin-luther-king-e1377613318307In a symposium at National Review Online about where Dr. King’s dream stands, 50 years after his historic speech, Anthony Bradley writes:

Fifty years ago, Dr. King provided America with a provocative vision, in which our republic would become a place of greater political and economic liberty for African Americans. However, in 2013, when we examine the black underclass in cities like Detroit, Chicago, and Washington, D.C., we can see how the politics of progressivism singlehandedly turned King’s dream into a nightmare.

For example, low-income black families were obliterated by welfare programs that emerged out of the Johnson administration’s failed “War on Poverty.” Welfare destroyed the incentives for men to marry and care for their children, remain employed, and save money for the long term. Today, as a result of progressivist social visions, only about 26 percent of black women marry, compared with 51 percent for white women. In 1950, 64 percent of African American women married, compared with 67 percent for white women. Without flourishing families, low-income blacks were doomed to government dependency and cyclical poverty.

Read more . . .

Blog author: jcarter
posted by on Wednesday, August 21, 2013

welfareIn eleven states in the union, welfare pays more than the average pretax first-year wage for a teacher. In thirty-nines states, it pays more than the starting wage for a secretary. And, in the three most generous states a person on welfare can take home more money than an entry-level computer programmer.

Those are just some of the eye-opening and distressing findings in a new study by Michael Tanner and Charles Hughes of the Cato Institute on the “work versus welfare tradeoff.”

“Welfare benefits continue to outpace the income that most recipients can expect to earn from an entry-level job, and the balance between welfare and work may actually have grown worse in recent years,” say Tanner and Hughes. “The current welfare system provides such a high level of benefits that it acts as a disincentive for work. Welfare currently pays more than a minimum-wage job in 35 states, even after accounting for the Earned Income Tax Credit, and in 13 states it pays more than $15 per hour.”

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The Pilot, a South Pines, N.C. newspaper, recently featured a review of Samuel Gregg’s Becoming Europe by Don Delauter. He says:

This is a scholarly work in which the author presents a review of the historical path which led relentlessly to the social and economic cultures of modern day Western Europe. He discusses how America diverged from the European course in important ways which until recently fostered the free enterprise Americans have enjoyed.

However, the future of this phenomenal record of achievement is at risk. Gregg believes that “Europe is the canary in the coal mine” for America.

Gregg notes that America joined the welfare state community somewhat late. The New Deal of the 1930s and the Great Society from the Johnson administration were the giant leaps forward. With few interruptions America has maintained a course toward becoming a deficit-spending welfare state, in short, “becoming Europe.”

Gregg concludes that “it would be a grave error for America to go down the European economic path, and not simply because it would result in less economic prosperity. The moral and political cost, in terms of reduced freedom, is simply not worth it.”

The review ends with this sobering thought: “A very worthwhile read, but it may be too late.”

You can read his entire review here and you can find more information about Becoming Europe here.

Theodore Dalrymple, contributing editor of the City Journal and Dietrich Weissman Fellow of the Manhattan Institute, has recently reviewed Samuel Gregg’s new book, Becoming Europe at the Library of Law and Liberty.

Dalrymple observes:

In this well-written book, Samuel Gregg explains what can only be called the dialectical relationship between the interests of the European political class and the economic beliefs and wishes of the population as a whole. The population is essentially fearful; it wants to be protected from the future rather than adapt to its inevitable changes, while at the same time maintaining prosperity. It wants security more than freedom; it wants to preserve what the French call les acquis such as long holidays, unlimited unemployment benefits, disability pensions for non-existent illnesses, early retirement, short hours, and so forth, even if they render their economies uncompetitive in the long term and require unsustainable levels of borrowing to fund them, borrowing that will eventually impoverish everyone. Many companies, including the largest, lobby the political class to be shielded from the cold winds of international competition and become, in effect, licensed traders. Having succumbed to the temptation to grant all these wishes, the politicians now dare not admit that they have repeatedly as a consequence to promise three impossible things before breakfast. We all know what to do, said the Prime Minister of Luxembourg, but not how to get re-elected afterwards; and so Pompadourism has become the ruling political philosophy of the day. Madame de Pompadour’s cynical but prophetic witticism, après nous le déluge has become the economic mission statement of almost the entire European political class.

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On National Review Online, Acton Research Director Samuel Gregg offers an analysis of last night’s debate between President Barack Obama and Gov. Mitt Romney. Gregg begins with the assertion by Melinda Henneberger of the Washington Post that the candidates are ignoring poor and working-class Americans. Gregg responds:

… what’s generally missing from the discussion of poverty in the context of this presidential election — though Romney did obliquely reference it in the second debate — is acknowledgment that: (1) the economic causes of impoverishment are more subtle and less amenable to wealth redistribution than the Left is willing to concede; and (2), with a few exceptions, liberals are generally reluctant to acknowledge some of poverty’s non-economic causes, not least because it throws into relief some of the more destructive effects of their cultural agenda.

If poverty was simply a question of wealth redistribution, the sheer amount of dollars spent since the not-so-Great Society programs of the 1960s should have resolved the problem. In 2011, Peter Ferrara calculated that “total welfare spending [in 2008] . . . amounted to $16,800 per person in poverty, 4 times as much as the Census Bureau estimated was necessary to bring all of the poor up to the poverty level, eliminating all poverty in America. That would be $50,400 per poor family of three.”

The effects in terms of reducing poverty have, however, been underwhelming. As Ferrara observes: “Poverty fell sharply after the Depression, before the War on Poverty, declining from 32% in 1950 to 22.4% in 1959 to 12.1% in 1969, soon after the War on Poverty programs became effective. Progress against poverty as measured by the poverty rate then abruptly stopped.” In short, America’s welfare state, which now easily accounts for the biggest outlays in the federal government’s annual budget, has proved inadequate at realizing one of its central goals.

Read “Who’s Really Forgotten the Poor” by Samuel Gregg on NRO.