Opinion from a Libertarian ViewPoint

Posts Tagged ‘War on Poverty’

Congrats Poverty, for winning the war on poverty

Posted by M. C. on October 1, 2021

Another war lost. Poverty and inflation won.

But the fundamental premise is flawed. Government can’t eradicate poverty anymore than it can eradicate a virus.

For starters, poverty in the US was already in decline, dropping from 18.5% in 1959, to 13.9% in 1965 (according to US Census Bureau data).

Yet in 1974, a decade into LBJ’s ‘all-out war’, poverty started rising again. Go figure— the 1970s saw the beginning of hardcore economic stagnation and debilitating inflation.

No amount of government support could counteract the destruction they were causing.

And by 1993, the poverty rate in the US was roughly the same as it had been in 1965.

So essentially the United States government had declared War on Poverty… and Poverty won. It was a stalemate at best.

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Erie Times E-Edition Article-Ending child poverty is mission worthy of this great nation

Posted by M. C. on April 4, 2021

Sounds great! But Casey has forgotten we still have LBJ’s war on poverty that began in 1964 with a cost, so far, of $22 trillion.

“I am from the government and am here to help”.

Your Turn

Sen. Bob Casey Guest columnist

For too long, America has led the Global North in the number of children living in poverty. Historically, almost one in seven kids in the United States grow up in poverty and the United States has consistently ranked near the bottom of Organization for Economic Cooperation and Development (OECD) countries in child poverty rates. Poverty not only affects individual children, but also has broader societal effects, including higher spending on health care, increased rates of crime, reduced rates of educational attainment and higher spending on remedial education. This is unacceptable. Fortunately, the recently enacted

American Rescue Plan legislation takes the largest step since the Great Society of the 1960s to end child poverty in America.

The pandemic and subsequent economic fallout have highlighted the challenges that many children and their parents face: lack of child care, hunger, disparities in health and education access and outcomes, among others. The labor force participation rate for women is the lowest we’ve seen since the 1980s. Women are almost three times as likely as men to not be working due to lack of child care. Access to quality and affordable child care is essential to our nation’s economic recovery as one in five working-age adults said child care was a reason they were not working.

The American Rescue Plan (ARP) has provided a foundation for transformative change in the lives of children in America and working parents across our commonwealth and our country. Under the ARP, Pennsylvania families will receive support from the historic expansions of the Child Tax Credit and the Child and Dependent Care Tax Credit. The Child Tax Credit will increase to $3,000 (and to $3,600 for children under age 6). Legislation I authored will expand the Child and Dependent Care Tax Credit and will help parents cover up to half the cost of child or dependent care. Working parents can get up to $4,000 for child care expenses for one child or up to $8,000 for two or more kids or dependents. For example, a family making $65,000 with two kids that has $10,000 in child care expenses will receive $5,000. Both tax credits will now be fully refundable, allowing all families to take advantage of the credits.

Responding to the hunger crisis that the pandemic further exacerbated, the ARP also includes immediate food assistance that can reach our most vulnerable children and communities. Through an extension of the 15% increase in Supplemental Nutrition Assistance Program (SNAP) benefits through the end of September, we can continue to respond to the severity of food insecurity that families now face. An extension of the Pandemic-EBT (P-EBT) program will also provide much needed food assistance through the summer for children when schools are closed and school meals are inaccessible. Additionally, the ARP directs additional investments to vulnerable children through the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) to modernize the program, expand service delivery models, improve outreach and participation and temporarily increase the amount of fruit and vegetables participants can obtain.

Many of the policies in the ARP are consistent with policies that I announced last year in my Five Freedoms for America’s Children proposal. My Five Freedoms proposal suggests a series of polices that, taken together, represent a fulfillment of our commitment to American children. The plan is built on five pillars: The freedom to be healthy, the freedom to be economically secure, the freedom to learn, freedom from hunger and the freedom to be safe from harm. We made extraordinary down payments on a number of these in the ARP, but we have to make them permanent going forward.

We must also set aggressive child poverty reduction targets and measure progress toward them. This target will be critical in sustaining and improving upon any progress made through the important policies in the ARP. My bill, the Child Poverty Reduction Act of 2021 (S. 643), would do this. It would establish a national goal of reducing child poverty by half in 10 years and require annual reporting on the progress we are making toward that goal.

We also know that food insecurity in Pennsylvania and throughout the country will unfortunately outlive the pandemic. For this reason it is essential that we continue to work to address hunger among children. A bill that I will soon introduce, the School Hunger Elimination Act, would expand access to healthy meals and drastically help reduce hunger in schools. As Congress looks to reauthorize the Child Nutrition Act this year, these reforms can help expand eligibility and assistance through school meals to our most vulnerable children and families.

President Biden and Democrats are keeping our promises to millions of Pennsylvanians, investing in our economy and in our workers and lifting half of America’s children out of poverty. Ending poverty among children is a mission worthy of a great nation. With the passage of the ARP, our nation is one step closer to providing vulnerable children with the resources they need to grow and succeed.

Democrat Bob Casey has represented Pennsylvania in the U.S. Senate since 2006.

President Joe Biden signs the American Rescue Plan on March 11 in Washington. Andrew Harnik/AP

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War on poverty, or just war on the poor? – Claudio Grass, Precious Metal Advisory In Switzerland

Posted by M. C. on July 17, 2020

But these are things no central planner understands, or even cares about. All these transformative forces and all the little miracles that the free interaction and voluntary exchanges between individuals bring about are unimportant to the bean counter, the bureaucrat and especially to the career politician. Improving people’s lives, reducing poverty, creating jobs and opportunities, are only seen as desirable outcomes if they can take credit for them. It important to remember this, next time someone argues we must turn to the state in order to erase inequality. For the state is the machine that mass-produces it, that incentivizes, enforces and gleefully perpetuates it.

As the dust is now begging to settle, both from the heights of the COVID panic and from the riots that shook the western world, we are starting to get an idea about where we stand after this unprecedented and tumultuous time. We are able to begin taking stock of the damage that was inflicted by the lockdowns and to evaluate the governmental efforts to help those affected and to provide support to the economy. More interestingly, we are finally in a position to see clearly who amongst us paid the highest price, who suffered the most and whose livelihood was taken away.

This picture is especially clear in the US, where the numbers speak for themselves. One look at the unemployment figures as seen in the chart below is enough to demonstrate the extent of the damage of the economic shutdown. However, a more detailed examination of the data reveals a lot more. It shows the sharp inequality in those lost jobs. Low- and minimum wage employees, seasonal, part-time and low-skill workers, were fired from their jobs at an astoundingly higher rate than their white-collar and better-paid peers. It makes sense, of course. Not only could these jobs be performed from home more easily, but these employees were also largely less replaceable. Being by and large more educated, more experienced and more skilled, there were seen as more “essential”, to use the government’s own terminology. Of course, all jobs are essential for those who need them to survive, but then again that argument never managed to gain any traction when bureaucrats were deciding who gets to keep their job and whose source of income is simply surplus to requirements.

Despite widespread “expert” commentary to the contrary, this economic disaster is not behind us. Even as the US economy now reopens, with setbacks and reversals, strict measures remain in place in most states. Social distancing restrictions and other requirements are still placing heavy burdens on the retail sector and the travel and hospitality industry, in many cases making it impossible to operate a business profitably.  It is thus no wonder that so many have chosen to operate with greatly reduced staff, reduced hours, or just not to reopen at all. In this environment, it is clear that those who can’t do their jobs from home will continue to suffer disproportionally. According to a new study by the University of Washington, there are over 108 Million Americans in that category. That’s three-quarters of the US workforce, who also happen to be among the lowest income levels in the country, and they are facing a considerably higher risk of layoffs, furloughs, or workhour reductions. Among them, there is a sub-group of 27.4 million workers, or 18.9% of the workforce, who work in retail, food and beauty services, protective services, and delivery of goods. This group, with a median income of $32,000, at the very end of the pyramid, is staring at an even greater risk of job insecurity and displacement.

Assessing the “relief” packages

The numbers are finally in for the Paycheck Protection Program, or “PPP”, that was supposed to safeguard jobs and to keep workers on the payroll throughout the shutdown. The program, which was part of the $2.3 trillion CARES Act, was meant to give out loans to businesses and non-profits with fewer than 500 employees, that would then be “forgiven” if the recipients allocated a certain portion of the loan on retaining or hiring back employees. The Small Business Administration (SBA) recently published a list of companies and organizations that received more than $150,000 in PPP. The picture painted by the data is not pretty, but that’s hardly a shock.

At least 12 members of Congress received PPP money through connected businesses. New York law firms, Wall Street investment firms, luxury clothing brands, like that owned by presidential candidate Kanye West, golf and country clubs also apparently qualified for what is essentially a cash gift of taxpayer money. Large corporations and national chains, that obviously did not qualify for these loans, also got paid, by simply filing for each branch and location separately as a small business, which is perfectly legal by the way. Lobbying firms and advocacy groups featured prominently on that list too; even long-time critics of excessive government spending, like “Americans for Tax Reform”, and fierce detractors of handouts and the welfare state, like the Ayn Rand Institute. Controversial and chronically divisive organizations like Planned Parenthood came out on the winning side of the shutdown too: According to reporting by NBC, PPP loans amounting to $150 million went to Planned Parenthood affiliates. Millionaire artist Jeff Koons, famous for this balloon animal sculptures, received a loan of $2 million to preserve 53 jobs at his New York studio. Just for reference, Koons’ estimated net worth is $200 million and in March 2019, his “Rabbit” sculpture sold for $91.1 million, setting a record as the most expensive work sold by a living artist at an auction.

And while the taxpayer-funded party was raging for crony capitalists, celebrities, and government-connected organizations, there were thousands of actual small businesses that were denied access to the PPP and were turned down for loans of even a few thousand dollars. Overrepresented among those who had the door shut on their face were minority-owned businesses. This failure is especially specular, given that the program had earmarked $30 billion for smaller lenders, with the explicit aim of supporting business owners of color in poorer neighborhoods and “underserved” markets. Overall, the smallest of small businesses, those owned by a single person and arguably needing that money the most, were the ones most egregiously treated: they were forced to apply for their share of the PPP money one week after everyone else, which in many cases meant that the first round of the funding had already run out when their turn came.

The state doing what it does best

A lot of these businesses that fell victim to the shutdowns and then were further betrayed by the “relief” spending that never reached them, were playing a crucial role and not just economically. They were local restaurants and bars, small corner shops, neighborhood salons and mom and pop operations. They were serving their local community, being supported by their regular customers and patrons and in return provided jobs, generating income on a local level. The net effect of these local business dynamics and the jobs they created and sustained goes beyond just providing a regular paycheck, which is in itself hugely important for so many people. They also ensure that this productive activity, the income it generates, the value it creates and the wealth it eventually builds all develop and remain within the community. These synergies and the combination of these forces can be extremely effective in elevating even the poorest communities, giving people more opportunities, financial security, independence and a sense of ownership. In turn, this literal and figurative enrichment helps support a climate of cooperation, responsibility and respect, which can also bring criminality under control in an organic way or even prevent it altogether, especially by staving off youth delinquency. Now, all these jobs and all the benefits they brought with them have perished, along with the businesses that created them.

But these are things no central planner understands, or even cares about. All these transformative forces and all the little miracles that the free interaction and voluntary exchanges between individuals bring about are unimportant to the bean counter, the bureaucrat and especially to the career politician. Improving people’s lives, reducing poverty, creating jobs and opportunities, are only seen as desirable outcomes if they can take credit for them. It important to remember this, next time someone argues we must turn to the state in order to erase inequality. For the state is the machine that mass-produces it, that incentivizes, enforces and gleefully perpetuates it.

Claudio Grass, Hünenberg See, Switzerland

This article has been published in the Newsroom of pro aurum, the leading precious metals company in Europe with an independent subsidiary in Switzerland.

This work is licensed under a Creative Commons Attribution 4.0 International License.

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Data Show That Poverty in the U.S. Was Plummeting—Until Lyndon Johnson Declared War On It – Foundation for Economic Education

Posted by M. C. on June 26, 2019

We were winning until the government turned it into (another) war.

Daniel J. Mitchell

One of the more elementary observations about economics is that a nation’s prosperity is determined in part by the quantity and quality of labor and capital. These “factors of production” are combined to generate national income.

I frequently grouse that punitive tax policies discourage capital. There’s less incentive to invest, after all, if the government imposes extra layers of tax on income that is saved and invested.

Bad tax laws also discourage labor. High marginal tax rates penalize people for being productive, and this can be especially counterproductive for entrepreneurship and innovation.

Still, we shouldn’t overlook how government discourages low-income people from being productively employed. But the problem is more on the spending side of the fiscal equation.

The Welfare State’s Effect on the Poor

In Thursday’s Wall Street Journal, John Early and Phil Gramm share some depressing numbers about growing dependency in the United States:

During the 20 years before the War on Poverty was funded, the portion of the nation living in poverty had dropped to 14.7% from 32.1%. Since 1966, the first year with a significant increase in antipoverty spending, the poverty rate reported by the Census Bureau has been virtually unchanged…Transfers targeted to low-income families increased in real dollars from an average of $3,070 per person in 1965 to $34,093 in 2016…Transfers now constitute 84.2% of the disposable income of the poorest quintile of American households and 57.8% of the disposable income of lower-middle-income households. These payments also make up 27.5% of America’s total disposable income.

This massive expansion of redistribution has negatively impacted incentives to work:

The stated goal of the War on Poverty is not just to raise living standards but also to make America’s poor more self-sufficient and to bring them into the mainstream of the economy. In that effort the war has been an abject failure, increasing dependency and largely severing the bottom fifth of earners from the rewards and responsibilities of work…The expanding availability of antipoverty transfers has devastated the work effort of poor and lower-middle income families. By 1975 the lowest-earning fifth of families had 24.8% more families with a prime-work age head and no one working than did their middle-income peers. By 2015 this differential had risen to 37.1%…The War on Poverty has increased dependency and failed in its primary effort to bring poor people into the mainstream of America’s economy and communal life. Government programs replaced deprivation with idleness, stifling human flourishing. It happened just as President Franklin Roosevelt said it would: “The lessons of history,” he said in 1935, “show conclusively that continued dependency upon relief induces a spiritual and moral disintegration fundamentally destructive to the national fiber.”

In another WSJ column on the same topic, Peter Cove reached a similar conclusion:

America doesn’t have a worker shortage; it has a work shortage. The unemployment rate is at a 15-year low, but only 55% of Americans adults 18 to 64 have full-time jobs. Nearly 95 million people have removed themselves entirely from the job market. According to demographer Nicholas Eberstadt, the labor-force participation rate for men 25 to 54 is lower now than it was at the end of the Great Depression. The welfare state is largely to blame… insisting on work in exchange for social benefits would succeed in reducing dependency. We have the data: Within 10 years of the 1996 reform, the number of Americans in the Temporary Assistance for Needy Families program fell 60%. But no reform is permanent. Under President Obama, federal poverty programs ballooned.

Edward Glaeser produced a similar indictment in an article for City Journal:

In 1967, 95 percent of “prime-age” men between the ages of 25 and 54 worked. During the Great Recession, though, the share of jobless prime-age males rose above 20 percent. Even today, long after the recession officially ended, more than 15 percent of such men aren’t working… The rise of joblessness—especially among men—is the great American domestic crisis of the twenty-first century. It is a crisis of spirit more than of resources… Proposed solutions that focus solely on providing material benefits are a false path. Well-meaning social policies—from longer unemployment insurance to more generous disability diagnoses to higher minimum wages—have only worsened the problem; the futility of joblessness won’t be solved with a welfare check… various programs make joblessness more bearable, at least materially; they also reduce the incentives to find work… The past decade or so has seen a resurgent progressive focus on inequality—and little concern among progressives about the downsides of discouraging work… The decision to prioritize equality over employment is particularly puzzling, given that social scientists have repeatedly found that unemployment is the greater evil.

Encouraging Dependency

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Reparations for Slavery – LewRockwell

Posted by M. C. on June 26, 2019

I’d like to see lawyers bring class-action suits against public school systems in cities like Philadelphia, Baltimore, Washington, Detroit and Los Angeles for conferring fraudulent high school diplomas.


…Let’s pretend for a moment that the reparations issue makes a modicum of sense. There’s the question of responsibility. More explicitly, should we compensate a black person of today by punishing a white person of today, by taking his money, for what a white person of yesteryear did to a black person of yesteryear? If we believe in individual accountability, we should find that doing so is unjust. In other words, are the tens millions of Europeans, Asian and Latin Americans who immigrated to the U.S. in the late 19th and 20th centuries responsible for slavery, and should they be forced to cough up reparations? What about descendants of Northern whites who fought and died in the name of freeing slaves? Should they pay reparations to black Americans? What about non-slave-owning Southern whites — who were a majority of Southern whites — should their descendants be made to pay reparations?

Reparations advocates make the unchallenged pronouncement that United States became rich on the backs of free black labor. That’s utter nonsense. While some slave owners became rich, slavery doesn’t have a good record of producing wealth. Slavery existed in the southern states and outlawed in most of the northern states. Buying into the reparations argument suggests that the antebellum South was rich and the slave-starved North was poor. The truth is just the opposite. In fact, the poorest states and regions of our country were places where slavery flourished: Mississippi, Alabama and Georgia. And the richest states and regions were those where slavery was absent: Pennsylvania, New York and Massachusetts.

The reparations movement would be an amusing sideshow were it not for its damaging distractions. It grossly misallocates resources that could be better spent elsewhere. According to the state Department of Education, 75% of black California boys cannot meet state reading standards. In 2016, in 13 of Baltimore’s 39 high schools, not a single student scored proficient on the state’s mathematics exam. In six other high schools, only 1% tested proficient in math. The same story of low education outcomes can be told about most cities with large black populations. I’d like to see lawyers bring class-action suits against public school systems in cities like Philadelphia, Baltimore, Washington, Detroit and Los Angeles for conferring fraudulent high school diplomas. Such diplomas attest a 12th-grade level of academic achievement when in fact those youngsters often cannot perform at sixth- or seventh-grade levels…

As of 2014, U.S. taxpayers have spent $22 trillion on Lyndon Johnson’s War on Poverty (in constant 2012 dollars). Adjusting for inflation, that’s three times more than was spent on all military wars since the American Revolution. If money alone were the answer, the many issues facing a large segment of the black community would have been solved.

There’s another possible reparations issue completely ignored: Blacks as well as whites live on land taken, sometimes brutally, from American Indians. Do blacks and whites owe American Indians anything?

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