The Center for Freedom and Prosperity has released another “Economics 101″ video, and this one has a very powerful message about the federal government’s so-called War on Poverty.
As explained by Hadley Heath of the Independent Women’s Forum, the various income redistribution schemes being imposed by Washington are bad for taxpayers – and bad for poor people.
The video has a plethora of useful information, but the data on the poverty rate is particularly compelling. Prior to the War on Poverty, the United States was getting more prosperous with each passing year and there were dramatic reductions in the level of destitution.
But once the federal government got involved in the mid-1960s, the good news evaporated. Indeed, the poverty rate has basically stagnated for the past 40-plus years, usually hovering around 13 percent depending on economic conditions.
Another remarkable finding in the video is that poor people in America rarely suffer from material deprivation. Indeed, they have wide access to consumer goods that used to be considered luxuries – and they also have more housing space than the average European (and with Europe falling apart, the comparisons presumably will become even more noteworthy).
The most important message of the video, however, is that small government and economic freedom are the best answers for poverty. As Hadley explains, poor people can be liberated to live meaningful, self-reliant lives if we can reduce the heavy burden of the federal government.
Last but not least, the video doesn’t address every issue in great detail, and there are three additional points that should be added to any discussion of poverty.
1. The biggest beneficiaries of the current system are the army of bureaucrats that receive very comfortable salaries administering various programs.
2. The Obama Administration is looking to re-define poverty in a way that would expand the welfare state and increase the burden of redistribution programs.
3. The welfare reform legislation of the 1990s was a small step in the right direction because it eliminated a federal entitlement and shifted responsibility back to the state level. This success story should be replicated for programs such as Medicaid.
This last point is worth emphasizing because it is also one of the core messages of the video. The federal government has done a terrible job dealing with poverty. The time has come to get Washington out of the racket of income redistribution.
The “Otherwise Would Be” Poor (See the link at upper right)
Fred: I’m out of work. I collect unemployment.
Mike: Let me help. I didn’t know it was bad for you.
Fred: No way. When the checks run out, I’ll have to get a job. Feel sorry for me then.
09/14/11 – EconLib by David Henderson [edited]
Tim Worstall: The federal government counts people who are poor without considering many of the benefits the poor receive. If those benefits were included, many millions of those people would not be considered poor.
David Henderson: There is a proposal to increase the Earned Income Tax Credit (EITC) by applying it to people with larger incomes. Workers at the new upper end would likely cut their work hours. They would recieve less in wages, offset partly by more income through the EITC.
They would be better off than before, counting the subsidy and more leisure, but their before-tax incomes would fall. Statistics would show an increase in poverty, and advocates might call for even larger EITC subsidies.
AMG: Statistics which include people who would be poor without benefits ignore the help they are already getting and exaggerates actual poverty. We should know three figures, the fraction of people in poverty despite aid, the number who are not in poverty because of aid, and the estimated amount people choose not to earn because they are receiving aid.
[...] recently posted an excellent video showing how the War on Poverty has been a disaster for both taxpayers and poor [...]
[...] recently posted an excellent video showing how the War on Poverty has been a disaster for both taxpayers and poor [...]
Anyone who looks at the facts, including poverty stats, cannot escape the conclusion that only a free market system can solve poverty – not government.
My progressive friends always try to argue that supply side economics, starting with Reagan in the ’80s, is the culprit. When I confront them with the chart showing poverty rates declining steadily until 1968 when War on Poverty started, and promptly reversing course afterwards, they try to change the premise of the discussion as good little progressives that they are.
By the way, I do not know how you do it, but the young ladies you use in your videos are simply stunning. Proves once more that conservative women are much prettier than progressive women.
Here’s a nifty piece, very short, from the National Center for Policy Analysis:
http://www.ncpa.org/sub/dpd/index.php?Article_ID=18694
It is entitled, “The Poor Need Capitalism.”
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[...] 3. A welfare state cripples the human spirit. This was the point eloquently made by Hadley Heath of the Independent Women’s Forum in a recent video. [...]
[...] 3. A welfare state cripples the human spirit. This was the point eloquently made by Hadley Heath of the Independent Women’s Forum in a recent video. [...]
[...] 3. A welfare state cripples the human spirit. This was the point eloquently made by Hadley Heath of the Independent Women’s Forum in a recent video. [...]
[...] 3. A welfare state cripples the human spirit. This was the point eloquently made by Hadley Heath of the Independent Women’s Forum in a recent video. [...]
[...] 3. A welfare state cripples the human spirit. This was the point eloquently made by Hadley Heath of the Independent Women’s Forum in a recent video. [...]
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[...] interview and this video have more information for those who want a more detailed look at anti-poverty issues. Share [...]