On January 8, 1964, President Lyndon B. Johnson delivered a State of the Union address to Congress in which he declared an “unconditional war on poverty in America.” At the time, the poverty rate in America was around 19 percent and falling rapidly. This year, it is reported that the poverty rate is expected to be roughly 15.1 percent and climbing. Between then and now, the federal government spent roughly $12 trillion fighting poverty, and state and local governments added another $3 trillion. Yet the poverty rate never fell below 10.5 percent and is now at the highest level in nearly a decade. Clearly, we have been doing something wrong writes Michael Tanner in The American Welfare State How We Spend Nearly $1 Trillion a Year Fighting Poverty—and Fail published by Policy Analysis.
By any measure, U.S. welfare spending has increased dramatically since 1965. In constant dollars, federal spending on welfare and anti-poverty programs has risen from $178 billion to $668 billion, a 375 percent increase in constant 2011 dollars, while total welfare spending—including state and local funds—has risen from $256 billion to $908 billion.
Measured as a percentage of GDP, federal spending increased more than fourfold, from just 0.83 percent of GDP to 4.4 percent.
Total welfare spending nearly tripled, from 2.19 percent of GDP to 6 percent. And, on a per capita basis, that is per poor person, federal spending has risen by more than 900 percent, from $1,625 to $14,848, while total spending rose by a smaller, but still substantial 651 percent, from $3,032 to $19,743.
News that the poverty rate has risen to 15.1 percent of Americans, the highest level in nearly a decade, has set off a predictable round of calls for increased government spending on social welfare programs. Yet this year the federal government will spend more than $668 billion on at least 126 different programs to fight poverty. And that does not even begin to count welfare spending by state and local governments, which adds $284 billion to that figure. In total, the United States spends nearly $1 trillion every year to fight poverty. That amounts to $20,610 for every poor person in America, or $61,830 per poor family of three.
When most Americans think of welfare, they think of the cash benefit program known as Temporary Assistance to Needy Families (TANF), formerly known as Aid to Families with Dependent Children (AFDC). But in reality TANF is only a tiny portion of a vast array of federal government social welfare programs designed to fight poverty. In fact, if one considers those programs that are means-tested (and therefore obviously targeted to low-income Americans) and programs whose legislative language specifically classifies them as anti-poverty programs, there are currently 126 separate federal government programs designed to fight poverty.
Federal welfare spending alone totals more than $14,848 for every poor man, woman, and child in U.S. and seven different cabinet agencies and six independent agencies administer at least one anti-poverty program while, at least, 106 million Americans receive benefits from one or more of these programs.
Welfare spending increased significantly under President George W. Bush and has exploded under President Barack Obama. In fact, since President Obama took office, federal welfare spending has increased by 41 percent, more than $193 billion per year. Despite this government largess, more than 46 million Americans continue to live in poverty. Despite nearly $15 trillion in total welfare spending since Lyndon Johnson declared war on poverty in 1964, the poverty rate is perilously close to where we began more than 40 years ago. Clearly we are doing something wrong. Throwing money at the problem has neither reduced poverty nor made the poor self-sufficient. It is time to reevaluate our approach to fighting poverty. We should focus less on making poverty more comfortable and more on creating the prosperity that will get people out of poverty.
It would make sense therefore to shift our anti-poverty efforts from government programs that simply provide money or goods and services to those who are living in poverty to efforts to create the conditions and incentives that will make it easier for people to escape poverty. Poverty, after all, is the natural condition of man.
Indeed, throughout most of human history, man has existed in the most meager of conditions. Prosperity, on the other hand, is something that is created. And we know that the best way to create wealth is not through government action, but through the power of the free market concludes the author.
Full report @ The American Welfare State: How We Spend Nearly $1 Trillion a Year Fighting Poverty–And Fail
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