published Tuesday, August 5th, 2014

Rector: Welfare state grows as self-sufficiency declines

Robert Rector

For the past 50 years, the government’s annual poverty rate has hardly changed at all. According to the U.S. Census Bureau, 15 percent of Americans still live in poverty, roughly the same rate as the mid-1960s when the War on Poverty was just starting.

After adjusting for inflation, federal and state welfare spending today is 16 times greater than it was when President Lyndon B. Johnson launched the War on Poverty. If converted into cash, current means-tested spending is five times the amount needed to eliminate all official poverty in the United States.

How can the government spend so much while poverty remains unchanged? The answer is simple: The Census Bureau’s “poverty” figures are woefully incomplete.

The census defines a family as poor if its annual “income” falls below specific poverty income thresholds. In counting “income,” the census includes wages and salaries but excludes nearly all welfare benefits.

The federal government runs over 80 means-tested welfare programs that provide cash, food, housing, medical care and targeted social services to poor and low-income Americans. The government spent $916 billion on these programs in 2012; roughly 100 million Americans received aid from at least one of them, at an average cost of $9,000 per recipient. (These figures do not include Social Security or Medicare.)

Of the $916 billion in means-tested welfare spending in 2012, the census counted only about 3 percent as “income” for purposes of measuring poverty. In other words, the government’s official “poverty” measure is not helpful for measuring actual living conditions.

On the other hand, the census poverty numbers do provide a very useful measure of “self-sufficiency”: the ability of a family to sustain an income above the poverty threshold without welfare assistance. The census is accurate in reporting there has been no improvement in self-sufficiency for the past 45 years.

Ironically, self-sufficiency was Johnson’s original goal in launching his War on Poverty. Johnson promised his war would remove the “causes not just the consequences of poverty.” He stated, “Our aim is not only to relieve the symptom of poverty, but to cure it and, above all, to prevent it.”

Johnson did not intend to put more Americans on the dole. Instead, he explicitly sought to reduce the future need for welfare by making lower-income Americans productive and self-sufficient.

By this standard, the War on Poverty has been a catastrophic failure. After spending more than $20 trillion on Johnson’s war, many Americans are less capable of self-support than when the war began.

This lack of progress is, in a major part, due to the welfare system itself. Welfare breaks down the habits and norms that lead to self-reliance, especially those of marriage and work. It thereby generates a pattern of increasing intergenerational dependence. The welfare state is self-perpetuating: By undermining productive social norms, welfare creates a need for even greater assistance in the future.

The poverty rate is better understood as self-sufficiency rate. That is, we should measure how many Americans can take care of themselves and their families. Reforms should focus on changing the incentive structure of welfare programs — to point the way toward self-sufficiency.

Robert Rector is a senior research fellow at The Heritage Foundation.

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librul said...

Ah, the Heritage Foundation. Capitalist Think Tank extriordinaire. Let's blather on about the poverty rate and the way "welfare breaks down the habits and norms that lead to self-reliance, especially those of marriage and work." But let's ignore population dynamics and the assault on public education. Let's not mention jobs off-shoring and the dismantling of the American manufacturing sector by corporate greed merchants. Let's not consider the waste of billions of dollars on a bloated, expansionist militarist empire that saps the life's blood out of our people and wastes resources on a global scale.

Sure, our "lack of progress is due to the welfare system."

Putz.

August 5, 2014 at 9:37 a.m.
librul said...

As I recall, one of your types recently attempted surviving on today's minimum wage and found it was impossible ... fix THAT before you yak any more about declining self sufficiency!

August 5, 2014 at 2:07 p.m.
librul said...

As C.J. Werleman said in a recent NY Times op-ed:

"In the U.S., a child born in the top 20 percent economically has a 2-in-3 chance of staying at or near the top, whereas a child born in the bottom 20 percent has a less than 1-in-20 shot at making it to the top, making the U.S. one of the least upwardly mobile nations in the developed world. Our levels of income inequality rank near countries like Jamaica and Argentina, rather than like countries like Canada and Germany, but American voters, in large, believe America is just doing fine. Not only is the U.S. one of the most income-unequal countries in the world, its government ranks among the least willing to redress the imbalance. This collective unwillingness is borne by the almost mystical reverence right-wing Americans afford unbridled and unfettered capitalism, and the manner in which they deem government as the agent of Satan, as opposed to the only tool they might have to restore economic balance in the society.

"Either we continue to self-delude ourselves into imagining income inequality isn’t as bad as it actually is, or we can finally become angry about it—and, in turn, force the government to actually do something about it."

i.e. the Right Wing Republicans are the problem ...

NOW, VOTE TO FIX IT.

August 5, 2014 at 2:49 p.m.
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