Letter: $15 trillion later, War on Poverty hasn’t worked

By Gordon Adams Sr.

The Daily Advance

6 Comments | Leave a Comment

The efforts by the liberal left to provide assistance to the underprivileged, such as through efforts like the War on Poverty, have not even come close to resolving the problem.

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Accidental repeat

accidental repeat

The answer is really quite simple:

Every cent invested in reducing poverty went immediately into commercial circulation that ultimately made the 1%ers richer, by $15 trillion dollars. It can be argued that the poor and middle income families are the ones that fuel job creation since all of their money is spent immediately on necessities that prompt production that results in hiring.

Proportionately, the 1%ers contribute 1% while the 99% contribute 99% to this cycle.

So, exactly where is the success story? Ask the rich. Stop blaming the poor.

Imagine where we would be if we had invested $15 trillion in free education for the lowest earning half of the population?

Respectfully Submitted,

Force 12

War on Poverty Winners & Losers

I think there were some winners in the war - bureaucrats who administered the programs. They even extended to the local counties in some places. Have the Department of Social Services been able to house their personnel in the 1967 building?

How many businessmen had increased earnings as the hundreds of dollars flowed into even small towns each month? How many stores did you see with signs stating that they did not accept "Food Stamps"?

Where did the money go? Who got it and where is it now? I feel certain that it is not in off-shore bank accounts of welfare recipients. Creating a dependency in a person did not necessarily make them a winner either.

Knowing today what we know will not end this gravy train because corporate America is now on board and that's the end of the game - Bank loans for homes with government backing to people who can't afford them. Government backed student loans for individuals who won't possibly finish the semester. The impoverished were with us in 1967 and they are with us today and they will be with us tomorrow because they are worth big bucks to the wealthy.


http://www.forbes.com/sites/louiswoodhill/2014/03/19/the-war-on-poverty-wasnt-a-failure-it-was-a-catastrophe/ Has the War on Poverty been a failure? Well, of course it has. If you devote 50 years and $21.5 trillion (in 4Q2013 dollars) to anything, and people are arguing about whether it was a success or a failure, then you can be sure that it was a failure. Have you noticed that, 50+ years from its inception, no one is suggesting that the Apollo program was a failure? The Apollo program was an unchallenged success because it accomplished its stated goal: “…to land a man on the moon, and to return him safely to the earth.” The stated goal of the War on Poverty, as enunciated by Lyndon Johnson on January 8, 1964, was, “…not only to relieve the symptom of poverty, but to cure it and, above all, to prevent it.” Measured against this objective, the War on Poverty has not just been a failure, it has been a catastrophe. It was supposed to help America’s poor become self-sufficient, and it has made them dependent and dysfunctional. This is fact is illustrated most vividly by the “Anchored Supplemental Poverty Measure Before Taxes and Transfers*” (ASPMBTAT). This metric was devised to assess the ability of people to earn enough, not counting taxes and subsidies, to keep themselves and their dependent children out of poverty. The income required to do this varies by family size and composition, but, for a family comprising two adults and two children, it is $25,500/year (in 4Q2013 dollars). The ASPMBTAT is the ultimate quantitative test of the success (or failure) of the War on Poverty, at least in terms of its stated objective. Shortly after the War on Poverty got rolling (1967), about 27% of Americans lived in poverty. In 2012, the last year for which data is available, the number was about 29%. This result would be shocking, even if we had not spent $21.5 trillion “fighting poverty” over the past 50 years. Here’s why. Between 1967 and 2012, U.S. real GDP (RGDP) per capita (in 4Q2013 dollars) increased by 127.3%, from $23,706 to $52,809. In other words, to stay out of poverty in 1967, the two adults in a typical family of four had to capture 26.9% of their family’s proportionate share of RGDP (i.e., average RGDP per capita, times four). To accomplish the same thing in 2012, they only had to pull in 12.1% of their family’s share of RGDP. And yet, fewer people were able to manage this in 2012 than in 1967. What turned the War on Poverty into a social and human catastrophe was that the enhanced welfare state created a perverse system of incentives, and people adapted to their new environment. That people would adapt to a changed social/economic environment should have surprised no one. After all, everyone living today is here because 50,000+ generations of their ancestors managed to adapt to whatever circumstances they found themselves in, at least well enough to produce and raise offspring. The adaptation of the working-age poor to the War on Poverty’s expanded welfare state was immediately evident in the growth of various social pathologies, especially unwed childbearing. The adaptation of the middle class to the new system took longer to manifest, but it was no less significant. Even people with incomes far above the thresholds for welfare state programs were forced to adapt to the welfare state. As crime rates (driven by rising numbers of fatherless boys) rose in the cities, and urban schools systems became dangerous and dysfunctional, the middle class (of all races) was forced to flee to the suburbs. Because many middle-class mothers had to go to work to permit their families to bid for houses in good school districts (as well as pay the higher taxes that the expanded welfare state required), self-supporting families had fewer children. Before we look at how the poor adapted to the War on Poverty’s enhanced means-tested welfare programs, let’s look at how America adapted to Medicare and enhanced Social Security benefits. Desperate to spin the disastrous War on Poverty as a success, progressives have tried to divert our attention from America’s growing underclass by pointing to the large decline in the Official Poverty Measure (OPM, which includes cash transfer payments) for senior citizens. The OPM for Americans age 65 and above fell from about 30% in 1967 to about 9% in 2012. Not so fast, progressives. It is not clear that the OPM for seniors would be higher today if the War on Poverty had never been mounted. Because the War on Poverty made Social Security benefits more generous, and also created Medicare, it produced an instantaneous reduction in the OPM for senior citizens. And, obviously, if Social Security and Medicare were terminated tomorrow, the OPM for senior citizens would rise. However, because both Medicare and enhanced Social Security have now been in place for the entire working lifetimes of the people retiring today, these calculations prove nothing. Progressives want us to believe that the people that started working after 1965 would have managed their lives and their finances exactly the same way if the welfare state had not been expanded during the mid-1960s. This is not likely. As Social Security and Medicare benefits were made more generous, people reduced their savings. The Personal Savings Rate (which is calculated as a percent of disposable income) has fallen by more than half since 1967 (from 12.2% to 5.6%). In other words, when people found that they didn’t need to save as much to avoid being poor in old age, they didn’t save as much. Also, because of higher payroll taxes, workers had less money to save. This was particularly problematic because GDP is driven by capital investment. America’s lower savings rate translated into slower economic growth. Because, as Albert Einstein once said, compound interest is the most powerful force in the universe, our economy is considerably smaller today than it would have been if people had been required to save more for retirement. And, there are far fewer good-paying jobs than there would have been with more investment and higher GDP. Among other things, a smaller GDP means that supporting our non-working senior citizens imposes a larger burden upon today’s working people than it would have if savings and investment had been higher over the past 50 years. So, it is not clear at all that the War-on-Poverty-enhanced welfare state for senior citizens produced any long-term benefit, even for seniors. However, at least we can afford it. With correct economic policies, the U.S. can sustain RGDP growth rates of 3.5% or higher, and this level of growth would make Social Security and Medicare affordable, with no tax increases and no benefit cuts. What America cannot afford is a welfare state that makes government dependency a feasible career option for its young people. The War on Poverty made welfare (broadly defined) into a viable entry-level job, and poor people signed up for it in droves. The pathologies that resulted from the War on Poverty were not the fault of the poor themselves. They simply adapted, in a logical and predictable way, to a welfare state designed and promoted by our progressive elites. It is amazing that progressives, who treat the theory of evolution as religious dogma, also seem to believe that there is no such thing as “human nature.” They also seem to believe that “nurture” (which presumably includes exhortation from government bureaucrats) trumps “nature.” Unfortunately for progressive programs like those making up the War on Poverty, there is an essential human nature that we all share, and humans respond predictably to the incentives present in the environment around them. Children are programmed by evolution to rebel against their parents’ control, and to seek to be independent. Prior to the welfare state, the only way for girls to escape the authority of their parents was to become economically self-sufficient, by getting a job and/or getting married. The progressive welfare state, especially after it was expanded by the War on Poverty, provided a third option for teenage girls seeking to get away from their parents’ control: have a baby. As soon as a young, unmarried girl had a baby, she officially became a “poor family,” and the government would force taxpayers to support her and her baby. Girls of all races responded predictably to shifts in welfare state policy, as shown below in a chart excerpted from a Heritage report.

Mr. Sparatus, yer facts...

demonstrate that $7.25 hourly part time jobs perpetuate poverty. Ask the rich how well they did in the same period taking all of that aid from the poor? Ask yourself why this comes from Forbes Magazine?

Even a full-time minimum wage job only grosses $15,080 per year. Even at the President's EO requirement of $10.10 for contractors, those few full time folks will still only gross $21,000, $4,000 less than the $25,000 poverty line for a family of four by the posted statistics.

Paying a living wage will eliminate most of the need for assistance.

Problem solved. Tell the richest 1% to change their business model. Don't tell the poor that we won't help them. Your quote:

"This is fact is illustrated most vividly by the “Anchored Supplemental Poverty Measure Before Taxes and Transfers*” (ASPMBTAT). This metric was devised to assess the ability of people to earn enough, not counting taxes and subsidies, to keep themselves and their dependent children out of poverty. The income required to do this varies by family size and composition, but, for a family comprising two adults and two children, it is $25,500/year (in 4Q2013 dollars). The ASPMBTAT is the ultimate quantitative test of the success (or failure) of the War on Poverty, at least in terms of its stated objective."

Oh, and nice cut and paste. What do you personally think? I'd like to read it.

Respectfully Submitted,

Force 12

Raise the minimum wage of a

Raise the minimum wage of a McDonalds employee to $15 an hour and that worker will find him/her self paying $10 for a Whopper at Burger King. How is that going to help the worker?

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