American Elephants


Inequality Is Not The Problem: The Problem Is A Lack of Growth and Jobs. by The Elephant's Child

Fifty years later, Lyndon Baines Johnson’s ‘War On Poverty’ has proven to be a total failure. From the end of World War II until 1964, the poverty rate in this country was cut in half. Statistically 94% of the change in the poverty rate in that period can be explained by changes in national per-capita income. Economic growth, as Jack Kennedy famously said, lifts all boats.

If we had continued the trend, economic growth would have reduced the poverty level to only 1.4% of the population today. We didn’t continue the trend, we had a war on poverty, and in the following years, the percentage of Americans living in poverty barely budged. In 1965 18% of the population lived in poverty. Today we are at 15%— 50 million Americans, after spending $15 trillion on antipoverty programs, and continuing to spend $1 trillion a year. John Goodman at the National Center for Policy Analysis (NCPA) notes that:

 Early on ― in the first decade of our 50-year experiment with an expanded welfare state ― carefully controlled experiments funded by the federal government established without question that welfare changes behavior. It leads to the very behavioral changes that keep people in a state of poverty and dependency. Think about that. Any serious social science debate about the effects of welfare on the behavior of the recipients was resolved four decades ago!

We now know a lot about how behavior affects poverty. In fact, if you do these four things, it’s almost impossible to remain poor:

1. Finish high school,
2. Get a job,
3. Get married, and
4. Don’t have children until you get married.

Although it is well-established that self-sufficiency is closely related to working and being married, we are increasingly “fighting poverty” by doing the very things that lead to less work and fewer marriages. But we keep adding marriage penalties to welfare benefits. That is,  you get more benefits if there is not a man in the house. And the penalty for attempting to work means losing more benefits that one is apt to gain on a beginning wage. There is a very strong marriage penalty in ObamaCare.

Sargent Shriver, LBJ’s poverty czar, predicted that welfare-state programs would eliminate poverty  by 1976. Didn’t happen. Now the Democrats’ interest has turned to “inequality,” and their focus is not on the poor, but on the very rich, and how to get their hands on their property.

Poverty has increased under Mr. Obama’s watch. It could be expected to rise during the recession, but the recession ended in June of 2009. Poverty continued to rise during the “recovery summer” and in the summer after that to a 50 year high. Enrollment in the food stamp program has increased by 39 percent. Worse, labor force participation rates have climbed. We spend seven of every ten federal dollars on sending checks to the poor and the middle class. Disability rolls have climbed drastically.

A growing economy, which seems to be beyond the ability of the Obama administration, creates jobs. Government welfare can keep people from destitution, but only a free and growing economy can create a ladder out of poverty. You don’t eliminate poverty, or even reduce it by raising the minimum wage. Raising the minimum wage simply means fewer minimum wage jobs, and more workers replaced by robots. The minimum wage is intended as an enticement to business to hire absolute beginners and to spend time and money training those beginners. To be effective in that role, it must be low enough for businesses to feel it worthwhile to train a beginner. Most people on the minimum wage have received a raise in six months — proof that when they have learned something about work, they are worth more.

You don’t increase the welfare of the poor by raising taxes, but by encouraging business to create more jobs. You encourage business by reducing uncertainty, reducing unnecessary regulation and lowering the corporate tax that is the highest in the world, for a start.

Early on ― in the first decade of our 50-year experiment with an expanded welfare state ― carefully controlled experiments funded by the federal government established without question that welfare changes behavior. It leads to the very behavioral changes that keep people in a state of poverty and dependency. Think about that. Any serious social science debate about the effects of welfare on the behavior of the recipients was resolved four decades ago! We now know a lot about how behavior affects poverty. In fact, if you do these four things, it’s almost impossible to remain poor:

  1. Finish high school,
  2. Get a job,
  3. Get married, and
  4. Don’t have children until you get married.

- See more at: http://healthblog.ncpa.org/why-we-lost-the-war-on-poverty/?utm_source=newsletter&utm_medium=email&utm_campaign=HA#more-37572

Early on ― in the first decade of our 50-year experiment with an expanded welfare state ― carefully controlled experiments funded by the federal government established without question that welfare changes behavior. It leads to the very behavioral changes that keep people in a state of poverty and dependency. Think about that. Any serious social science debate about the effects of welfare on the behavior of the recipients was resolved four decades ago! We now know a lot about how behavior affects poverty. In fact, if you do these four things, it’s almost impossible to remain poor:

  1. Finish high school,
  2. Get a job,
  3. Get married, and
  4. Don’t have children until you get married.

- See more at: http://healthblog.ncpa.org/why-we-lost-the-war-on-poverty/?utm_source=newsletter&utm_medium=email&utm_campaign=HA#more-37572




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