Perhaps it is time to stop worrying about an exit strategy for the War in Iraq and formulate one for the War on Poverty.
No, it’s not the War in Iraq — it’s the War on Poverty. Incredible as it may seem, Americans transfer more than a trillion dollars each year to low-income families through a bewildering variety of programs, all in the name of fighting poverty and inequality. That’s about seven times the cost of the Iraq war.
How do we spend so much? In 2005, $620 billion was spent on more than eighty welfare programs funded by federal, state, and local governments. But low-income persons receive benefits from other government programs that are not designated as welfare programs. Most notably, they receive benefits from Social Security, Medicare, and the public school system.
I estimate that Social Security benefits for those in the poorest fifth of the population totaled $100 billion in 2005. Medicare provided another $115 billion, and educating the children of low-income families cost $105 billion more. (These figures do not measure total spending on these programs but only the expenditures benefiting those in the lowest fifth of the income distribution.) To these sums we may add $40 billion in uncompensated medical care and $78 billion in private charity.
Grand total: $1.058 trillion in 2005. It would be larger today.
To put a trillion dollars in perspective, it’s more than twice our total spending on national defense.
It’s larger than the total revenue collected by the federal individual income tax.
It’s about ten times as much as we spent on redistributive policies in the 1950s (in inflation-adjusted dollars).
It’s equal to the total before-tax cash income of middle-income households. That’s right, we transfer to the low-income population an amount equal to the entire income of middle-income households, that is, households in the middle fifth (40th to 60th percentile) of the American income distribution.
If a trillion dollars were simply given to those counted as poor by the federal government (37 million in 2005), it would amount to $27,000 per person. That’s $81,000 for a family of three, higher than the median income of all American families, and far greater than the poverty threshold of $15,577.
By any reasonable standard, a trillion dollars devoted to fighting poverty and inequality is a substantial sum.
What do we get for it? That is the question we should be asking our politicians in this election year as they urge us to spend still more on the War on Poverty.
When Lyndon Johnson inaugurated the War on Poverty in 1964, he assured the public that “. . . this investment [of tax dollars] will return its cost many fold to our entire economy.” Now that this “investment” has reached a trillion dollars a year we should evaluate whether the returns have, in fact, been large. Some questions to consider:
Is the low-income population more independent and self-supporting than before the War on Poverty?
Has the trillion-dollar expenditure eliminated poverty in America? Reduced it dramatically?
Has the trillion-dollar expenditure reduced inequality? Are the egalitarians grateful to the American people for their sacrifices in this area, or are they continually carping about increasing inequality?
Are more disadvantaged children being raised in stable two-parent families today than before the War on Poverty?
Are the children in low-income families getting good educations that prepare them for productive lives as adults? Have the racial gaps in educational achievement been eliminated or greatly narrowed?
Has illegitimacy been reduced in the low-income population?
Is crime lower today than in the 1950s, before the War on Poverty?
The answers to these questions, I submit, paint a bleak picture of the accomplishments of the American welfare state. While a nuanced interpretation of the evidence may identify a few positive returns on our “investment,” we have a right to expect a lot more for a trillion dollars a year. Perhaps it is time to stop worrying about an exit strategy for the War in Iraq and formulate one for the War on Poverty.
Mr. Browning,
You are making a fundamental error. To leftists, it isn't about success or achieving the objective. It is only the intent that counts.
If we were to judge social programs by asking how many have achieved their stated goals, all of them must be judged an abject failure. But for some reason, leftists think that because of this failure, the answer is to spend more money.
Go figure.
I suppose it is a Reductio ad absurdum argument, but I’ll make it anyway. In Gulag Archipelago, Solzhenitsyn describes a system, which makes the pre-Civil War south look like a picnic. In chapter 22, he gets to the economics with three questions:
1. Did the camps justify themselves in a political and social sense?
2. Did they justify themselves economically?
3. Did they pay for themselves (despite the apparent similarity of the second and third questions, there is a difference)?
In great detail, with citations, he answers NO to each. With this piece you begin to answer the same way for the War on Poverty.
Thank You.
Seems to me that the premise of the article asks the question is it working and answers no. Missing is the critical point of how do we kill these programs and come up with an approach that actually works. When something is free you get what you pay for and these programs return exactly zero.
The issues in the war on poverty echo through the school system as well. The schools don't work either.
Rebuilding a system that provides self reliance suggests that the recipient needs to have skin in the game. Find an old timer and call the WPA a welfare program then try to stand up after they hit you. They had skin in the game.
Any program that hands must require work or school and demand good performance at either. But that is not fair to require performance because they are not lucky.
Your point is made but how do you dig out of the problem?
“If a trillion dollars were simply given to those counted as poor by the federal government (37 million in 2005), it would amount to $27,000 per person.”
Here’s the problem. The official purpose of the WOP is to help end poverty. Its actual purpose is to protect and enhance the power of Washington liberals. This money is used to justify their jobs, add to their bureaucratic power base, and make people dependent on government aid so as to secure their votes in the next election. It’s the same model 19th and 20th century urban political machines used to great success.
An example of this in a different area illustrates this point. I once made a presentation to a prestigious national Foundation for $1 million on behalf of my non-profit client. I took great care to show the way this money would be used in a very effective manner with a highly positive and measurable impact. The foundation head listened politely, agreed that my program would probably achieve its objectives, then said something to the following effect: “I have a $3 million budget and 6 staff. Last year we gave out 300 individual grants. If I give you $1 million, that’s one-third of my budget. I’ll need to cut my staff and justify my own workload, because there won’t be enough remaining work for all of us.”
We received $10,000 for our client.
Bureaucracies and the politicians who benefit from them have a built-in inertia against change. Logic and common sense will not alter the outcome of their decisions.
Phil, similar example remember CETA? At the time I was the Dean of Information Processing/Research at a large community college. We decided to create a program to train computer operators and programmers using our staff. It would be a classic win/win situation my staff made extra money, students were taught by actual practitioners and my contacts in the industry provided students with employment leads. Program had 100% placement and average salary was 3 times that of other CETA programs. Winner huh? No, program was cancelled because they could train more keypunchers less expensively. They were placing 50% or less of them and ignored the statistical evidence that the keypuncher would disappear within 10 years.
The moral of the story is that I agree that government bureaucrats will not let facts get in the way of what they want to do. Feel good lives.
Mickey G
"..how do we kill these programs and come up with an approach.."
With all due respect: To the later, I would say the approach was written in 1776 by Adam Smith and some guys on this side of the Atlantic. There is little to "Come up with"
To the killing the program, that will have to come from the people being injured by the system. That would be you and me, but more importantly, the real victims as described by Bill Cosby and others. Unfortunately, they are not ready to do this, as they are busy rooting for Obama.
And Edgar: Is the money taken by force from fathers and given to “single mothers”, with a cut going to the government included in your figures?
I am on staff running a homeless shelter for Veterans. I can tell you from firsthand personal experience that:
Most shelters merely warehouse people, and do little to assist them in resolving their issues and getting back to productive lives. For example, many if not most shelters are "wet" shelters, in which inebriation, as long as it's low-key and you cause no trouble, is OK.
But you are never allowed any stability, cannot count on a place to stay on any given day. How then does this assist people in getting training, finding jobs, housing? Putting shattered lives back together?
All of these consume tremendous amounts of money for little social benefit.
Mind you, some programs actually *do* work well. Those who truly can no longer work are assisted, and those who can still work are guided towards returning to the workforce. But they are the exception, not the rule. Where I work is one of the exceptions, but we are near-unique in that way.
I am certain those who came up with these programs meant well. However, while long on intent, they are woefully short of execution.
The measure of how much you care in Washington and the MSM is how much you increase a program's budget from one year to the next. Increase it by 10% and you "care". Freeze it or decrease it, and you "don't care". [It gets even more complicated with baseline budgeting which assumes an automatic 10% increase. An 8% increase then becomes a “2% cut”.]
Nowhere does anyone define success as a program that works so successfully it is no longer needed. This is why bureaucrats aggressively seek new food stamp recipients, for example, if not enough people are currently enrolled in their program despite their efforts to pull in as many recipients as they can. It will cause their funding to be cut the next FY. “Success” puts the bureaucrats out of business.
Change is only possible with a paradigm shift that changes the rules. This comes about occasionally when the force of a president’s will reshapes key aspects of the Washington mentality. Mostly, it happens when the existing situation is so screwed up and financially bankrupt that change cannot be talked-away or avoided.
For the remaining 99.9% of the time, it’s business as usual. Limited accountability gets introduced here and there; bureaucrats and other vested interests seek to sabotage it; the reformers eventually tire or lose power, and we revert to business as usual.
I'm not saying I like this process, just that institutionally it IS the process.
“…a trillion dollars devoted to fighting poverty and inequality is a substantial sum. …What do we get for it?”
A lot of highly paid bureaucrats managing lucrative contracts with even higher paid consultants to produce studies that go nowhere except a high level presentation followed by a trip to the agency library shelf.
“…Lyndon Johnson inaugurated the War on Poverty in 1964…”
I remember when LBJ first said that poverty would be a priority of his administration, the news media pointed out a poor black family living in a shack on his Texas ranch and working for him for peanuts. LBJ’s response? He sent the man a carload of used presidential business suits.
“Has the trillion-dollar expenditure reduced inequality?”
People forget that the truly wealthy are powerful enough through their wealth to keep inequality from being reduced. After all, no one dealt four aces agrees to a re-deal. But is equality a desirable goal? [I am assuming economic equality here.] As economist Vilfredo Pareto once said, “If people are made equal, they will be made equal at a low level.”
Phil:
Of course. Those of us in this world know about the "use or lose" problem. If you don't use 100%+ of your grant for *this* year, next year's will be cut. It's irrelevant if that money actually is applied to your target population.
This carries up the food chain. If you don't fund said endeavors, you are not with the plan, not on the same page as everyone else. So you have to keep feeding the system, increasingly. Else you lose your "street cred" in the governmental world.
I swear, being experienced in the social service world, I could accomplish 100% of the same goals with 25% of the funds. But it's become a feeding trough, both for those within it, and those who fund it.
You know, at times, I seriously wonder if there isn't a "Category Error" (as in Philosophy, a misframed question or issue) in attacking "Poverty." It's exactly the same as attacking "terror," as in the "War on Terror." "Poverty" is amorphous, without substance, a mere concept.
We should be addressing the causes, not the effects.
LAM — you are attacking poverty. If the bureaucrats and politicians who benefit from these programs had these programs terminated, what else could they do to earn a living? We're keeping them out of the poorhouse.
Phil: exactly. If they attacked the cause(s) (whatsoever we determine is the precise causes), we would work ourselves out of a job. Instead, the the cause is of course some tenuous reason that can't be pinned down, and so we have job-security.
Man, if I could say, "every homeless Veteran isn't," I would retire, happy as a Clam. Ain't gonna happen, as you and I both know. Vested interests will see that it isn't and won't. They're is big bucks to be earned.
If you ever have anyone who purports to claim knowledge of the Homeless world to you, point them off to me, please! I will be happy to be your resource to inform them professionaly that they have important congitive organs placed firmly up their own excretory canals!
Good God, I cannot type tonight. My bad.
LAM: Where I come from, we call that an "anal-cranial inversion".