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The Continuing Failure of America’s Welfare State

Unfortunately, no one should have been surprised at yesterday’s Census Bureau’s announcement that the number of Americans deemed to be living in poverty increased in 2010. When wealth-creation slows and unemployment remains above 9 percent, the probability that more Americans will fall into the category of economically poor is magnified.

Of course, ever since efforts have been made to measure poverty, there have been arguments about what constitutes poverty, how relative poverty compares with absolute poverty, and so on. It hardly need be said, for example, that Americans in relative poverty are doing much better in terms of life-span, shelter, and nutrition than most people living in, say, Bangladesh or Zimbabwe. Seen in those sobering terms, very few of the estimated 46.2 million Americans in poverty could be described as destitute.

Then there is the fact that poverty numbers generally don’t take into account such factors as the ever-increasing access to better technology as competition drives the price for such goods and services down over time. Cell phones are perhaps one of the best examples of this phenomenon. As Robert Rector and Rachel Sheffield from the Heritage Foundation remind us in a short and clear backgrounder on poverty in America, what were once considered luxury items are now commonplace throughout the United States, even among relatively poor Americans. They also note that, from a long-term perspective, these new numbers don’t represent enormous change in the poverty rate — especially, it might be added, when we takes into account the overall increase in population.

That said, any growth in the raw numbers of Americans living in relative poverty is nothing to be sanguine about. In fact, it’s downright disturbing. Leaving aside the often-devastating social and moral effects of economic poverty, the fact that an estimated one in seven Americans is living in relative poverty raises questions about the efficacy of the means we are employing to address this problem.

This brings us to the welfare state. It is now surely clear that the trillions of dollars expended on welfare programs since the not-so-glorious days of the 1960s have not apparently made much of a dent in significantly changing the ratio of Americans in poverty.

In some instances, America’s welfare apparatus may have prevented some people (especially the elderly) from falling into abject poverty. There is, however, very little evidence that it has helped millions of people out of relative poverty. There is also plenty of data to indicate that many welfare programs have produced intergenerational dependency on the state – a point that even Bill Clinton seemed to have grasped by the mid-1990s.

We need to keep these serious failures of America’s welfare state in mind because these new poverty numbers will almost certainly be used as an argument by some people of good will (as well as those whose motives are far less noble) to resist any reductions in welfare spending, despite America’s far-from-healthy debt and deficit situation. Yet the sheer size of government spending on entitlement programs (by far the biggest item in the federal government’s budget) makes cuts in these areas inescapable if – I repeat, if – our political masters are serious about wanting to balance the government’s books.

Indeed, such cuts are assuming an ever-increasing urgency in light of the studies which continue to appear indicating that crushing levels of public and government debt run the risk of significantly impeding growth. That’s worrying, not least because a slowdown in growth will hurt those in poverty far more than the wealthy. Strong growth rates are one of the most powerful antidotes to poverty – just ask anyone living in mainland China or India. More welfare spending is simply not the answer.

— Samuel Gregg is research director at the Acton Institute. He has authored several books including On Ordered Liberty, his prize-winning The Commercial Society, Wilhelm Röpke’s Political Economy, and his 2012 forthcoming Becoming Europe: Economic Decline, Culture, and America’s Future.

New on The Corner. . .


COMMENTS   13

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   09/14/11 10:42

It is good that Mayor Koch figured out that Obama and his policies are actually a threat to the survival of Israel. The question is, with what appears to be the emergence of more Iran-like "Islamic" states from the Arab Spring, will Obama reverse his anti-Israel ways before it is too late? Sadly, I doubt it. After sitting in the Rev. Wright's church for 20 + years, Obama's anti-Israeli beliefs and prejudices are set in stone. The only way to change the US policy toward Israel and an increasingly militant Muslim threat is to get a new President of the US who actually believes Israel should survive and prosper.

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   09/14/11 10:45

OOps, put this on the wrong article--should go on the Ed Koch piece.

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   09/14/11 10:42

One must not know any poor people to believe that access to a cell phone says anything about one's economic condition.

Chances are, the person will have 25 cell phone numbers in the course of 3 months, as the thing gets shut off every other day, as anyone who works with poor people can attest.

So the person has access to a phone. Hip Hip Hooray! The person has zero access to a meaningful base of employers in his or her own neighborhood, the average neighbor of such person is also unemployed, and the generations older than them are busy advocating that everyone sign up for public benefits that they were never so lucky to receive.

In that environment, the cell phone is nothing but a (minor) hindrance to fixing one's plight. Every moment spent texting or talking to one's friends is a distraction.

This is the modern welfare state at its absolute worst. Consign people -- through the short-term incentives benefits provide -- to a cycle of poverty, but provide benefits at levels that allow the person to afford meaningless luxuries, to make the poverty horse-pill easier to swallow.

A DVD player, a nice TV, an iPod and a cell phone -- oh, and a "possession" all their own, a piece of property known as "child" to which dad has no access, unless he has child support money to offer.

In short, the cell phones of the poor are merely appendages to broken promises and broken dreams.

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   09/14/11 10:42

The fact there is even concepts such as "relative poverty" and "absolute poverty" should be enough to tell us that trying to define classes is a dangerous game that generally depends upon the subjective positions of the people playing.

But I have a different question. What is morally wrong about being poor? If a person who is poor is because of his own actions and no one else's (i.e., nothing was taken from him) how exactly is that a morally wrong position to be in? When did we begin to define people's income and assets levels in terms of morality?

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Chris Behrens
   09/14/11 11:27

I don't think there's anything remotely morally wrong about being poor, as long as one does not then impose the burden of their needs on someone else unwillingly. Certainly a monk who takes a vow of poverty is not immoral, or any other person who takes an effective vow to devote their life to a problem which will never yield material benefit. Who is saying that being poor is morally wrong?

Re: absolute versus relative poverty...I think the problem here is that we're defining poverty in terms of an income level, rather than one's actual circumstances. Yes, there are x people below the poverty line, but how many people are actually suffering from privation? That is the important number.

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   09/14/11 13:47

"Who is saying that being poor is morally wrong?"

From above:

"In fact, it’s downright disturbing. Leaving aside the often-devastating social and moral effects of economic poverty, the fact that an estimated one in seven Americans is living in relative poverty raises questions about the efficacy of the means we are employing to address this problem."

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Brian Pyper
   09/14/11 19:00

I think the point was not that poverty itself is morally wrong, but that often associated with poverty is a host of not only social but moral ills that tend to hamstring or corrupt people from behaving in morally and socially productive ways - ways that tend to be then passed on to subsequent generations and may, then have detrimental outcomes for both the person and the society.

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jdad
   09/15/11 10:07

Read it again.

"often-devastating social and moral effects of economic poverty"

"Moral effects" caused by poverty are very different from calling the state of poverty "immoral".

Immorality does result in those falling below the "poverty" line in modern America specifically when indirectly requiring another person to sponsor your condition.

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 Fred
   09/14/11 11:05

Might also be helpful to define poverty as something other than three times the U.S. Department of Agriculture's economy food plan cost in 1963-64.

And maybe include all government subsidies when calculating income.

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   09/14/11 11:16

Poverty in America grows because politics continues to redefine what poverty is and expands to whom that label applies. We have those who are poor through no fault of their own, those who are poor because of lifestyle choices they make and those who are technically poor because their declared income falls below the poverty line. With generations of the same families making the choice to live on public assistance - and doing so comfortably and contentedly - we should have realized long before now that the welfare system was broken.

Other entitlement programs are suffering from the same problem. They encourage perfectly able-bodied Americans to remain unemployed - at least for tax paying purposes - so they can collect a variety of taxpayer-funded benefits they are told they deserve, i.e., unemployment, food stamps, utility subsidies and scholarships. Politicians have created an entitlement society that rejects personal responsibility in favor of dependence and allows taxpayer dollars to be used as campaign cash, so it's no wonder they're doing their very best to keep growing it.

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   09/14/11 15:40

It seems like the more we pay people to be poor, the more poor people we have. The following numbers prove that beyond any argument. The core welfare crowd was there before the recession and has been growing ever since the government started paying them.
Let's run the real numbers:
Since the mid 60's we have spent over $16 Trillion on means tested government income re-distribution programs. We are now $14.4 Trillion in debt and have
- 45 million people on food stamps,
- over 40 million kids getting free school lunches,
- 9 million more on WIC,
- about 8 million in subsidized housing,
- 5 million on TANF,
- 8 million on SSI (including 1.2 million kids),
- about 49 million on Medicaid and
- 71 million households (47% of tax filers) not paying income taxes primarily because of EITC and the Child Tax Credit.

Does anybody really think more debt or taxes to pay for more income re-distribution programs is really going to help anything? We already have 70 programs now.
And no - I am not wealthy. I am tired of paying other people's bills while tens of millions have been trained to keep crying "woe is me". And I see their "benefits" just keep growing and getting passed from generation to generation.

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KYhighlander
   09/15/11 17:18

We have so many incentives to remain poor.

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   09/15/11 18:40

Let's add in the value of all the public assistance (including tax credits) low and middle income people receive and revisit those poverty figures.

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