Poverty

In the 50-Year War on Poverty, Bureaucrats Have Won While Both Taxpayers and Poor People Have Lost

We know the welfare state is good news for people inside government. Lots of bureaucrats are required, after all, to oversee a plethora of redistribution programs.

Walter Williams refers to these paper pushers as poverty pimps, and there’s even a ranking showing which states have the greatest number of these folks who profit by creating dependency.

But does anybody else benefit from welfare programs?

Robert Rector of the Heritage Foundation explains in the Washington Times that the War on Poverty certainly hasn’t been a success for taxpayers or poor people. Instead, it’s created a costly web of dependency.

This year marks the 50th anniversary of President Lyndon Johnson’s launch of the War on Poverty. …Since then, the taxpayers have spent $22 trillion on Johnson’s war. Adjusted for inflation, that’s three times the cost of all military wars since the American Revolution. Last year, government spent $943 billion providing cash, food, housing and medical care to poor and low-income Americans. …More than 100 million people, or one third of Americans, received some type of welfare aid, at an average cost of $9,000 per recipient.

Here are some of the unpleasant details.

Shock poll: Americans believe government anti-poverty programs cause more poverty, and they’re absolutely right

It isn’t news to conservatives that government programs do not reduce poverty levels. What is news is that 49% of Americans apparently believe that not only do government anti-poverty programs fail, but they also may increase the level of poverty.

A recent Rasmussen poll also pointed out that people that personally witness what happens when people receive government assistance are more likely than those that don’t to believe that anti-poverty programs actually increase the poverty level. While these findings are trending slightly lower than results from previous years, it is still a sign that the public may not believe that the government can resolve the issue of poverty through assistance programs.

A more profound indication of that belief is seen when people stated their thoughts about the number of people receiving government assistance - 67% believe that too many people are dependent on the government. Additionally, 62% believe that the government needs to be smaller, offering fewer programs. The same percentage of adults are keeping up with government program issues in the news.

These are excellent numbers for conservatives, if they can manage to deliver a message that the public wants to hear. Theoretically, the public is ready to see changes in anti-poverty programs. The problem isn’t selling the concept of welfare reform - it is with offering an alternative that isn’t perceived as harmful to the people that truly need assistance. This shouldn’t be extremely difficult, because 64% of Americans think that too many people that do not actually need assistance are receiving it.

Create opportunity, not welfare: Paul Ryan’s new poverty reform plan is a great place to begin a long overdue conversation

After his humbling defeat as the Republican Party’s vice presidential nominee in the 2012 election, Paul Ryan decided to refocus his efforts. He remained the Budget Committee chairman in the House, still producing the annual Path to Prosperity budget request.

But Ryan also dove head first into a project he had wanted to do during the campaign but was denied: visiting inner city neighborhoods to get a first hand account of poverty in America, with the goal of changing how the federal government approaches the problem.

The fruits of that nearly two-year long effort were unveiled in the form of a draft document from his committee called Expanding Opportunity in America, a sweeping anti-poverty reform agenda covering everything from tax credits, criminal sentencing, and occupational licensing.

Ryan unveiled the plan at an event at the American Enterprise Institute on Thursday morning. It’s not perfect, but it is an important first step both in actually tackling the frustratingly stagnant poverty levels around the country and in dismantling the narrative that Republicans don’t care about poor people.

While it is still an outline for federal legislation, in its introduction Ryan makes clear that government alone is not the solution to tackling poverty.

To Help The Poor, To Not Help The Poor

Republicans in the Senate blocked legislation this week that would increase the federal minimum wage. Currently, the federal minimum wage level is at $7.25 an hour and the failed proposed increase would have raised it to $10.10 an hour. Democrats promoting the bill claimed it was a strong way to combat poverty.

The expected outrage at the failure of the bill included sound bites from an angered Obama aimed at Republicans, saying, “They said ‘no’ to helping millions working their way out of poverty.” Republicans responded to the many criticisms citing the CBO report showing that 500,000 jobs were expected to be lost if the increase was passed.

Though that is a great argument to make since it is quite difficult to work your way out of poverty if you no longer have a job, it is not the only one. The options for a business owner that is presented with a forced increase to labor costs include raising prices and cutting hours as well as cutting jobs entirely.

So, from the view of a poverty stricken minimum wage worker these options look just as bad. They are faced with an increase in the prices of goods and services they need. Not to mention they now run the risk of having their hours cut or losing their job entirely.

How many people in poverty would see an increase in pay because of this bill? According to the Census Bureau, in 2012, nearly 60% of those living at or near the poverty level were not in the workforce, meaning an increase in wage would not help.

CBO: Minimum wage hike would cost 500,000 jobs

An ever-increasing federal minimum wage is a statist panacea. Even Mitt Romney supported tying it to inflation in the 2012 campaign. But the CBO on Tuesday released its report scoring the proposals, and the numbers aren’t good.

If the minimum wage were raised on $10.10, as the Obama administration has proposed, somewhere between 500,000 and 1 million jobs could be lost over the next two years:

Once fully implemented in the second half of 2016, the $10.10 option would reduce total employment by about 500,000 workers, or 0.3 percent, CBO projects. As with any such estimates, however, the actual losses could be smaller or larger; in CBO’s assessment, there is about a two-thirds chance that the effect would be in the range between a very slight reduction in employment and a reduction in employment of 1.0 million worker

Economists and politicians have debated for decades about the minimum wage’s effect on employment, but the non-partisan government calculator has spit out a decisively negative result, at least for employment.

cbo1

Adding more salt to the wound, the CBO finds that raising the minimum wage also won’t be the immediate fix for poverty that many thing it would:

The increased earnings for low-wage workers

Why GOP needs to remake their image

The Republican Party has an image problem.  Really, anyone who follows politics knows it.  Years upon years of corporatist policies has lead to people who really believe things like this quote that was in the Atlanta Journal-Constitution:

“I hadn’t paid attention to the race, but I’m voting the Democratic ticket,” said Bryan Dabruzzi, a 43-year-old from Atlanta who is finishing a degree in nuclear engineering. “I’m not rich, so I can’t vote Republican.”

Now, Dabruzzi is probably a pretty bright guy.  After all, I’m not even close to finishing a degree in nuclear engineering.  At 43 years old, he’s also not likely to be some kid who just doesn’t know any better.  No, most likely, this is an opinion based on years of observation.  For what it’s worth, this quote was made in reference to a governor’s race here in Georgia.

It’s easy to discount Dabruzzi’s quote as someone who, while maybe not unintelligent, just doesn’t understand politics.  However, one would think that a member of Forbes staff might look at things a bit different.  One would be wrong though, according to John Tamny:

Having lost an eminently winnable presidential election to a failed president in Obama, the Republicans are a Party desperately seeking a message, image, and probably both.

Is The American Dream Dead?

American flag

The American Dream—the idea that any American has the ability to pull themselves up by the bootstraps, work hard, make good decisions, and lift themselves from even abject poverty to extreme wealth—is what has always made America different from any other nation on earth.  Only in the United States’ free market capitalist economic system has this level of economic mobility been possible, which is why people from around the world have flocked to the United States throughout its history.  But is the American Dream still possible?

According to a recent Rasmussen Reports survey, 59 percent of Americans believe that it is impossible for any individual American to work hard and get rich, the highest level ever.  Not only that, only 48% believe that it is possible for anyone to work their way out of poverty, while 39% disagree.  Rasmussen also shows that pessimism is at an all-time high, with only 25% of Americans believing that the economy will be better a year from now than it is today.  Given the sorry state of the American economy, that’s a very sad statement.

Free Market Advocacy and the Myth of “Trickle-Down Economics”

 

G20 capitalism banner

There’s a pervasive myth floating around the progressive left that pro-market advocacy necessarily means pro-business advocacy (and, by extension, anti-poor people advocacy). That is, as I said, categorically a myth, but that doesn’t mean people don’t believe it — they do. Kudos are due many times over to the Washington Examiner’s Tim Carney for doing yeoman’s work to try to dispel these myths, like this thorough and merciless rebuttal to Anna Palmer’s joke of a POLITICO piece on a supposed resurgence of corporate lobbyist influence in the White House if Mitt Romney wins the election, as if there’s nothing to see in the Barack Obama White House:

You mean after he kicks out the lobbyists in Obama’s White House like Patton Boggs lobbyist Emmett Beliveau (7), O’Melveny & Myers lobbyist Derek Douglas (8), and Pfizer’s, AT&T’s lobbyist at Akin Gump Dana Singiser (9)?

By that point in the column, Carney had already identified six registered lobbyists working in the administration; by the end of the thrashing, he identifies a total fifty-five registered lobbyists working in the White House.

Care About the Poor? One More Reason to Be Mad about Cash for Clunkers

I would like to know where the bleeding-heart outcry is over the Cash for Clunkers program. Aside from the centuries of economic theory that show why it may be, as economist Chris Edwards suggests, the dumbest program ever, where’s the outrage over destroying materials that could be of so much value to our nation’s poor?

There are thousands of poor people in this country, and even more in Mexico, who are struggling to get by. Many of them drive old, beat-up jalopies that break down regularly, and many can’t afford cars at all.

And then the government introduces a program that results in the destruction of millions of dollars worth of perfectly good vehicles. Now, I understand that the whole point of the program was to get those cars off the road to lower carbon emissions and nudge a culture into purchasing smaller cars.  But do the planners in Washington really think that a program that lasts a couple of weeks will result in an overall worldwide decline in carbon emmissions? Is there that much hubris floating around in the Potomac?

So was it worth the publicity stunt to revoke vehicles from the hands of the poor?

Go ahead and watch this perfectly good trunk get demolished, and you decide if it could have served a better purpose in the hands of a struggling American.

Economists speak out against minimum wage increase

More than 500 economists, including three Nobel laureates, have signed a letter warning lawmakers of the “serious consequences” of raising the federal minimum wage to $10.10 an hour, a policy being pushed by President Barack Obama and most congressional Democrats.

“One of the serious consequences of raising the minimum wage is that business owners saddled with a higher cost of labor will need to cut costs, or pass the increase to their consumers in order to make ends meet,” the letter states (PDF). “Many of the businesses that pay their workers minimum wage operate on extremely tight profit margins, with any increase in the cost of labor threatening this delicate balance.”

The economists point to the recent Congressional Budget Office (CBO) report on the $10.10 minimum wage proposal. The CBO estimated that such a significant increase in the minimum wage would cost the economy 500,000 jobs, perhaps as many as 1 million, over the next two years. “Many of these jobs,” the letter notes, “are held by entry-level workers with limited experience or vocational skills, the very employees meant to be helped.”

The economists explain that the minimum wage is “a poorly targeted anti-poverty measure,” noting that [e]xtra earnings generated by such an increase in the minimum wage would not substantially help the poor,” again pointing to the findings of the CBO report.


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