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Harris Sherline: Throwing Money at Poverty Isn’t Solving the Problem

The federal government has spent more than $13 trillion since 'war' was declared, with nothing to show for it

What image comes to mind when you hear the word poverty? Someone who looks like a bum, unkempt and lazy, living off the taxpayers? Or a simple, hardworking individual or family, struggling to make ends meet, just trying to get along? Or, all of the above?

Poverty statistics have always troubled me. Mostly, I think, because they seem to include too large a percentage of the population, and the percentage never seems to change. If anything, it seems to get bigger.

When President Lyndon Johnson declared “unconditional war on poverty in America” in January 1964, the country’s poverty rate was around 19 percent and falling.

Since then, the federal government has spent more than $13 trillion fighting poverty, but recent reports show that the poverty rate is about 15 percent and climbing. In all the years since the “war” was declared, however, the rate has never fallen below 10.5 percent.

“Welfare spending could arguably be justified if we were actually reducing poverty. But as the recent numbers make clear, we’re not,” Michael Tanner, a senior fellow at the Cato Institute, noted in an editorial for Investor’s Business Daily. “Clearly we are doing something wrong. Throwing money at the problem has neither reduced poverty nor made the poor self-sufficient.”

The federal government now has 122 anti-poverty programs, with Medicaid the largest. These programs spent more than $590 billion last year — roughly $14,850 for every poor person in the country.

Given that the poverty line is $10,830, it would have been cheaper just to mail every poor person a check for $11,000, according to Tanner, author of The Poverty of Welfare: Helping Others in Civil Society.

President George W. Bush boosted welfare spending by about $80 billion over his entire second term, while in just two years President Barack Obama’s administration has increased spending on welfare programs by more than $120 billion, in part by easing eligibility and expanding caseloads. One out of every six Americans now receives some form of government assistance.

“The whole theory underlying our welfare programs is wrong-headed,” Tanner concludes. “We focus far too much on making poverty more comfortable and not enough on creating the prosperity that will get people out of poverty.”

One of the unavoidable consequences of poverty is to expand the welfare rolls.

In September 2007, former President Bill Clinton noted, “When I signed the Welfare Reform Act in 1996, requiring able-bodied people who could work to do so, there was legitimate concern that there would not be jobs available for them because they tended to be under-educated and to have less experience, and that when the economy slowed down, as it inevitably would, they would be the first laid off. While there have been some problems, welfare reform has been largely successful. ... The welfare rolls had dropped nearly 60 percent, more than 7 million people, by the time I left office, and have continued to drop since. In 2000, the percentage of Americans on welfare reached its lowest point in four decades. During the economic downturn of 2001, many of those who came off the welfare rolls were able to stay in the work force in part due to policies designed to help them succeed.

“The success of welfare reform was due to more than better policies. There was also a conscious effort to expand the job market (by promoting the hiring of) new employees from the welfare ranks.

Ronald Reagan said, “Welfare’s purpose should be to eliminate, as far as possible, the need for its own existence.’”

Obama’s approach to dealing with poverty is an attempt to change the funding system to reward states that increase the size of their welfare caseloads and eliminate the only remaining federal program that tries to strengthen marriage — at a time when the rate of births by unwed mothers is approaching 40 percent.

Katherine Bradley, visiting research fellow at the DeVos Center for Religion and Civil Society, and Robert Rector of the Heritage Foundation noted that the “Obama budget is sending a clear message to members of high-risk communities: ‘Stay on welfare and don’t get married.’ This message, however, is the very reason poverty continues to be a problem in the U.S. and why Lyndon Johnson’s War on Poverty failed. While there was brief success in reversing this trend after the 1996 welfare reform initiative, President Obama and his counterparts in Congress are intent on reviving the failed policies of the past and enslaving more low-income families onto welfare and into intergenerational poverty and government dependence.”

— Harris R. Sherline is a retired CPA and former chairman and CEO of Santa Ynez Valley Hospital who as lived in Santa Barbara County for more than 30 years. He stays active writing opinion columns and his blog, Opinionfest.com.

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