I'm getting more and more annoyed by claims from liberal and left-wing politicians that we need to provide more money for entitlement programs, social support programs, community development efforts, and the like. We don't. The facts speak for themselves.
Since 1966, the first year with a significant increase in antipoverty spending, the poverty rate reported by the Census Bureau has been virtually unchanged.
Last year a United Nations investigator using census data found “shocking” evidence that 40 million Americans live in “squalor and deprivation,” in a country where “tax cuts will fuel a global race to the bottom.” He continued: “The criminal justice system is effectively a system for keeping the poor in poverty,” and reported that “the demonizing of taxation means that legislatures effectively refuse to levy taxes.”
If that doesn’t sound like the country you live in, that’s because it isn’t. The Census Bureau counts as poor all people in families with incomes lower than the established income thresholds for their respective family size and composition. The thresholds, first set in 1963, are based on a multiple of the cost of a budget for adequately nutritious food, adjusted for inflation. While the Census Bureau reports that in 2016 some 12.7% of Americans lived in poverty, it is impossible to reconcile this poverty rate, which has remained virtually unchanged over the last 50 years, with the fact that total inflation-adjusted government-transfer payments to low-income families have risen steadily. Transfers targeted to low-income families increased in real dollars from an average of $3,070 per person in 1965 to $34,093 in 2016.
Even these numbers significantly understate transfer payments to low-income families since they exclude Medicare and Social Security, which provide large subsidies to low-income retirees. Compared with what they pay in Social Security taxes, the lowest quintile of earners can receive as much as 10 times the lifetime benefits received by the highest quintile of earners and three times as much as the middle quintile.
The measured poverty rate has remained virtually unchanged only because the Census Bureau doesn’t count most of the transfer payments created since the declaration of the War on Poverty. The bureau measures poverty using what it calls “money income,” which includes earned income and some transfer payments such as Social Security and unemployment insurance. But it excludes food stamps, Medicaid, the portion of Medicare going to low-income families, Children’s Health Insurance, the refundable portion of the earned-income tax credit, at least 87 other means-tested federal payments to individuals, and most means-tested state payments. If government counted these missing $1.5 trillion in annual transfer payments, the poverty rate would be less than 3%.
. . .
Transfer payments essentially have eliminated poverty in America. Transfers now constitute 84.2% of the disposable income of the poorest quintile of American households and 57.8% of the disposable income of lower-middle-income households. These payments also make up 27.5% of America’s total disposable income.
There's more at the link.
Ronald Reagan famously said: "If you want more of something, subsidize it; if you want less of something, tax it." We've subsidized "poverty"; so, inevitably, we have more of it, according to the warped, twisted measurements of those who benefit from such an expansion (bureaucrats, politicians, and those individuals and organizations who administer and distribute programs and aid for the poor).
To use the old carrot-and-stick metaphor, we've rewarded poverty (carrots) rather than made it undesirable (the stick). For all except the truly down-and-out, perhaps it's time to use less carrot and more stick, by at least reducing, if not actually eliminating at least some of, the subsidies that make a life in extended "poverty" not only possible, but lucrative. That would also make our national budget look a lot healthier than it is!
Peter
5 comments:
To expand on what you've posted, in our state in 2006, you would need a job making a minimum of $42,000/year to have the same standard of living provided by all the "entitlements". I've not seen an updated amount, but I'm sure it's a lot higher. Why should anyone go find a job, when they receive much more than they would by having no job, and if they got a job, the entitlements would end.
You get more of what you subsidize indeed, but something that can't go on forever, won't.
Interesting, that term "real dollars". I presume they mean 'inflation-adjusted' dollars, but then that begs the question are they using official government numbers to determine inflation?
As to the carrot and the stick, on the other end of that stick we need to see less stick and more carrot for the producers of society.
And remember, the "Poor" here is the US have, by many measures, a higher standard of living than most "middle class" folks in europe.
And our poor somehow have always got the money for Beer, smokes, Tattoos, and the newest cell phone. Odd, that.
We can be 'mean' and start weaning them now, or we can be 'Woke' and allow them to go suddenly into free-fall when the economy collapses.
Isn't the solution for failed big, expensive government solutions, to make them bigger and more expensive, or duplicate the effort elsewhere while doing nothing about the previous solution?
Is that the Democrats position, or the statists?
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