The U.S. Census Bureau has released its annual report on “income and Poverty in the United States.”
Among the salient facts:
In 2015, real median household income was 1.6 percent lower than in 2007, the year before the most recent recession, and 2.4 percent lower than the median household income peak that occurred in 1999.
The 2015 poverty rate was 1.0 percentage point higher than in 2007, the year before the most recent recession.
During the time period in question, the bulk of government intervention in the economy has been not on sparking the economy to create more jobs, but on increasing government spending on entitlement programs, except for regular Social Security benefits to those 65 and over and veterans benefits.
The War on Poverty began in 1964. Sargent Shriver, who at the time led the War on Poverty effort, predicted in would succeed in ten years. At the time, the poverty rate was about 14%. In 2015, 51 years later and after spending $22 trillion dollars, that percentage has barely budged, now at 13.5%.
According to the National Center for Policy Analysis, “America has spent more on welfare than defense since 1993. The War on Poverty has cost $22 trillion — three times more than what the government has spent on all wars in American history. Federal and state governments spend $1 trillion in taxpayer dollars on America’s 80 means-tested welfare programs annually.”
The problem should be clear to even the most casual observer. The emphasis of War on Poverty type programs, an emphasis made even larger during the Obama Administration, was on maintaining those in poverty, not removing those individuals from poverty.
By ignoring the traditional route to self-sufficiency in favor of government handouts, it limited the incentive to seek employment in “starter” jobs, which eventually would lead to promotions in the workplace and greater gained income.
The Washington Times has previously reported:
“critics are pointing to…the Obama administration’s anti-growth, anti-job, anti-investment fiscal policies. The nation’s workforce has shrunk to 62.4 percent of the population, the lowest level since 1977, as discouraged workers have stopped looking for employment.”
At the heart of the problem is a profound rejection of the traditional American economic structure. Despite the fact that capitalism has done far more to promote more prosperity to more people than any other system, leftist politicians and academics alike continue to prefer more collectivist solutions.
Stephen Moore, writing in Townhall states:
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A Forbes study by Jeff Dorman outlines several “essential economic truths liberals need to learn.” Among the most significant:
1) Government cannot create wealth, jobs, or income.
2) Income inequality does not affect the economy.
3) Low wages are not corporate exploitation.
4) Environmental over-regulation is a regressive tax that falls hardest on the poor.
5) Consumer spending is not what drives the economy.
6) When government provides things for free, they will end up being low quality, cost more than they should, and may disappear when most needed.
7) Government cannot correct cosmic injustice.
8) There is no such thing as a free lunch.
In a Realclearpolitics report, Moore also described how, in the aftermath of the Great Recession, socialist responses were widespread, and, predictably, failed: “the past decade could be described as the comeback of socialism. In response to the financial crisis, nations foolheartedly turned to central governments to steer them out of crisis. Government debt, spending and regulatory activity soared all across Europe and in the United States. The Keynesian model that sees government welfare spending as a “stimulus” came storming back in vogue — nowhere more so than in the United States.
There has been much talk of “the new normal,” in which, for the first time in America, succeeding generations have lesser expectations than their parents, and in which the middle class will be in the minority. But neither of those outcomes are inevitable. A return to a more free-market economy could allow for the return to a higher rate of growth and expanded employment.
Many countries — Greece, Italy, Spain, Portugal and France, as well as the United States — experimented with quasi-socialist governments. Now, the bitter price is being paid.”