POVERTY IN AMERICA

In 1964 President Lyndon Johnson, as part of his “Great Society” program, declared a “War on Poverty,” in America. 2014 marks the 50th anniversary of this war. So, where do we stand? Have we succeeded or failed, and why? I will present the facts, and you decide.

1. In 1964 approximately 17% of Americans were living in poverty. Today, the figure is 15%. That’s over 46 million people, folks. (In 2010, the official poverty income line was $22,113 for a family of 4.)

2. It is estimated that over 51% of Americans will live in poverty at some point in their lives before the age of 65.

3. The marginal improvement in the poverty rate has been achieved after we have spent $21 trillion in various anti-poverty programs in 50 years, according to the Heritage Foundation.

4. According the Wall Street Journal, in 2012 the Federal government spent $916 billion on approximately 80 welfare programs. One hundred million Americans received aid from at least one of these programs. This does NOT include medicare and social security.
These statistics demonstrate that throwing money at the situation has not worked. Why? To a large extent poverty is driven by personal behavior.

5. It is true that some children start life with certain disadvantages. Statistics show that a person born into a single parent home, who is poorly educated is more likely to live in poverty. A Heritage Foundation study has concluded that single parent homes are four times more likely to be living in poverty. Moreover, children that have been raised by a single parent are three times more likely to end up in prison and 50% more likely to be poor as adults. But, these circumstances can be overcome with hard work, a stable home environment and a good education, among other things. After all, many wealthy, successful people were born into poverty and/or modest circumstances.

6. Poverty and wealth are not static. Most people move up or down the ladder throughout their lifetimes based on various factors and circumstances. For example, the Institute for Humane Studies has found that between 1986 and 1997 42% of people moved up or down at least one income quintile.

7. In 1963 6% of babies were born out of wedlock. In 2013 the figure was 41%, a whopping 72% for African Americans. Regardless of the reasons (single women now better able to support themselves and deciding to have children without a husband, sexual promisquity, or other reasons), the end result is the same – more babies born into single parent homes, with all of the economic and social consequences discussed above.

$21 trillion over 50 years with marginal improvement. Did we get sufficient “bang for our bucks?” I think not. The reason is pretty clear. Throwing money at this problem does not solve it, at least not by itself.

President Obama has talked a good game. He has espoused a strong desire to eliminate poverty. It is related to his goal of achieving “income equality.” It sounds good; it is a worthwhile objective, and many people have “bought into it.” However, his methodology is flawed. Transferring wealth from the rich to the poor does not solve the poverty problem. That is socialism or, in its extreme, communism. We have seen empirically in other countries that neither system works in the long run.

The government cannot create wealth; only individuals can through capital investing and other entrepreneurial activities. Capitalism and free enterprise expand the money supply and create wealth. Don’t fixate on the income and wealth gap between the rich and poor. There will always be a substantial gap, because smart, ambitious and creative people will always find a way to succeed, even in adverse economic times. The have-nots should not be envious of the haves; their mindset should not be “I want to be given some of what he has; I’m entitled to it.” Rather, it should be “I aspire to earn what he has, and I will strive to do so.” Wealthy people are the ones who provide investment capital, thus creating wealth and ultimately jobs for the middle and working class. President Kennedy was correct when he asserted “a rising tide lifts all boats.”

The past 50 years has shown that money and government programs are only part of the answer. If we really want to eliminate poverty we have to supplement these safety net programs with other approaches. Some of these might be:

1. Focus more on education, which is still the greatest single factor in future economic success. One cannot change the circumstances of one’s birth, but one can become educated.

2. Instill greater social responsibility, i.e. discourage out of wedlock births, more involved parenting; discourage addictive behavior among children (drugs, alcohol).

3. Recognize that many of these government programs discourage individual initiative and work ethic, encourage laziness and foster a permanent sense of dependency and entitlement. We should seek to limit them to the truly needy.

4. Reign in the “race hustlers” (We know who they are.), who do more harm than good.

CONCLUSION AND PREDICTION

My conclusion is that the War on Poverty, though a good idea and well-intentioned, has not been a success when you consider the substantial resources expended. That does not mean we should eliminate our various economic and social safety nets. They are necessary for the truly needy. Rather, we should administer them better and supplement them with other resolutions as discussed above.

This will not be easy. It will be a very controversial process. It will require reversing, or at least arresting, certain economic and social trends which have become engrained in our culture. There will be much political and social resistance. I am not optimistic.