Why hasn’t poverty been eradicated?

Back in 1964, President Lyndon Johnson declared “War on Poverty.’ And yet, poverty is still with us. Why is this, and what can be done about it?

Too many journalists seem unable to break free of their old assumptions, even when new evidence should cause some new thinking. Three articles in the Sept. 22 edition of the Washington Post endorsed the view that giving more money to poor people and poor countries can solve the problem of domestic and global poverty. It’s remarkable that so many smart people in our society are unaffected by the evidence that such transfer programs just don’t work.

In a front-page article, two reporters talked about the destitute people fleeing Hurricane Katrina and wondered if America would finally face the problem of poverty. They quoted a foundation president who lamented that Americans “ignore the problems of poverty’ until a catastrophe happens. They suggested that only a renewed “War on Poverty’ could both help the poor and tell us whether Republicans are ready and able to govern. . . .

Meanwhile, a Post editorial called for more aid to the governments of poor countries. It suggested that rich countries measure their commitment to development by a benchmark that emphasizes the amount of aid along with trade, investment, and other criteria.

In every case the assumption that transfer payments are the solution is not even explicitly stated; it’s just taken for granted. But where’s the evidence supporting this for welfare and foreign aid?

The United States has spent $9 trillion (in current dollars) on welfare programs since President Johnson launched the War on Poverty in 1965. Critics have challenged this figure, saying it includes more than welfare alone. It does include more than Aid to Families with Dependent Children, now known (hopefully) as Temporary Assistance to Needy Families (TANF); it also includes food stamps; Medicaid; the Special Supplemental Food Program for Women, Infants, and Children (WIC); utilities assistance under the Low-Income Home Energy Assistance Program (LIHEAP); housing assistance under a variety of programs, including public housing and Section 8 Rental Assistance; and the free commodities program. Clearly, those are all transfer programs for the poor.

Look at Louisiana alone: Michael Tanner, author of The Poverty of Welfare, writes, “The federal government has spent nearly $1.3 billion on cash welfare (TANF) in Louisiana since the start of the Bush administration. That doesn’t count nearly $3 billion in food stamps. Throw in public housing, Medicaid, Child Care Development Fund, Social Service Block Grant and more than 60 other federal anti-poverty programs, and we’ve spent well over $10 billion fighting poverty in Louisiana.’

If all that spending didn’t cure poverty, then surely more spending isn’t the answer. Indeed, maybe it’s the problem. Welfare and other aid programs ensnare people, leading them to become dependent on their monthly check rather than finding jobs and starting businesses. In 1960, just before the Great Society’s dramatic increases in welfare programs, the out-of-wedlock birth rate in the United States was 5 percent. After 30 years of rising welfare benefits, the rate was 32 percent; young women had come to see the welfare office, not a husband, as the best provider. Welfare created a cycle of illegitimacy, fatherlessness, crime, more illegitimacy, and more welfare.

Likewise, the United States has spent over $1 trillion on foreign aid. And yet, the Clinton administration reported that “despite decades of foreign assistance, most of Africa and parts of Latin America, Asia and the Middle East are economically worse off today than they were 20 years ago.’ Government-to-government aid has tended to strengthen governments in poor countries at the expense of business and individuals and has made governments increasingly dependent on their rich lenders. Few countries have “graduated’ from aid to self-sufficiency. After all that aid, according to a National Bureau of Economic Research study, sub-Saharan Africa is actually poorer than it was 30 years ago.

It’s not even that the Post reporters weren’t aware of the facts. In the 19th paragraph, the front-page story notes that “there are more than 80 poverty-related programs, which in 2003 cost $522 billion.’ The next line reads, “Yet despite those programs, 37 million Americans continue to live in poverty.’

Maybe “despite’ is the wrong word. The reporters should consider the possibility that the sentence should read “Because of those programs, 37 million Americans continue to live in poverty.’

Similarly, the editorial notes that other policies such as free trade and liberal immigration laws may benefit poor countries more than government-to-government aid. But the editorial writers still can’t break free of the idea that giving taxpayers’ money to bad governments will help their oppressed citizens.

It’s time for new thinking about poor people and poor countries. Transfer payments don’t work; they trap both people and countries in a state of dependence instead of self-reliance. — David Boaz

I touched on this before, during the Live 8 concert series.

The reality is that programs like these don’t do anything to end poverty; instead, they perpetuate it, keeping the recipients of your tax dollars in a permanent state of low income. I’ve personally seen this play out over and over with countless people in many cities all over the U.S. People get on assistance of some kind, and then rely on it to the point where they can’t get off it even if they wanted to, and after a point, they stop wanting to, if they ever did.

I have to ask at this point, since there are a lot of liberals reading this, is that what you intended? If not, then why continue to support programs that just do the same thing? And if it is what you intended, how do you sleep at night, knowing you’re helping to oppress the poor?

In addition, it’s been demonstrated over and over that cash payments to oppressive governments in Africa don’t actually do anything for the poor in those countries. The governments, as a rule, keep the money, and those for whom it was intended see little or nothing.

Instead, people both there and here must have access to markets, so as to be able to create their own wealth and thereby become financially self-sufficient. It can be done. I should know; I’m doing it myself. Without any government assistance, thank you very much.

And while all people may be created equal and be entitled to equal opportunity, there it ends. That someone refuses to take advantage of an opportunity does not mean that the rest of us should support him in his laziness. (Of course I exempt from this those who are unable to work because they are sick or disabled, even though many opportunities are even available to most of them.)

“People who get a job — any job — and stick with it until they find a better one will stay out of the welfare-and-poverty trap,’ Boaz concludes. And there is much truth to this. “And reporters need new glasses, to let them see the evidence in front of them rather than relying on their outmoded assumptions.’