A Real-Life Example of How Government Handouts Create Life-Sapping Dependency

Remember Julia, the mythical moocher created by the Obama campaign to show the joys of government dependency? As illustrated by this Ramirez cartoon, Julia symbolizes the entitlement mentality.

Unfortunately, there are many real-life Julias.

I wrote a couple of years ago about Olga, a Greek woman who petulantly believed that government was responsible for her empty life.

But we don’t know any details about Olga other than her desire to mooch, so the best real-world examples of Julia may be from England. We have Natalija, a Lithuanian immigrant who has quickly learned bad habits of dependency, and Danny and Gina, two native-born scroungers.

Natalija, Danny, and Gina all decided to get a free ride from taxpayers, largely because overly generous handouts meant that they could enjoy higher living standards by staying at home and watching TV rather than living productive lives.

And if these info-graphics are any indication, there must be lots of people in the United Kingdom who make similar calculations.

No wonder English employers sometime have a hard time filling slots. Why climb the economic ladder when government is providing a comfy hammock?

Unfortunately, the same misguided policies exist in the United States. I shared a remarkable chart last year showing that a household would be better off with $29,000 of income rather than $69,000 of income because of the combined impact of both taxes and redistribution programs.

Now, courtesy of some first-rate journalism by a local television station, we have a powerful example exposing how the system operates. We learn the story of Kristina, who chooses to earn less money in order to keep the taxpayer-funded gravy train rolling.

We’ve all heard the line that America is becoming an entitlement society or welfare state, with half of U.S. households now receiving some type of government benefit. But a CBS 21 News investigation has taken that stat one step further to show you how much people are actually getting for free. A few years ago, reporter Chris Papst worked with a single mom who had two children. She turned down a raise because she said the extra money would decrease her government benefits. It was hard to understand why she did that, until Chris started working on this story. “You do what you have to do as a single mom,” explained Kristina Cogan. “And that’s what I did.” ……she admits living a life off the government can be comfortable. “If you’re going to get something for free, are you going to work for it?” Cogan explained. “It kind of like sucks you in.”

Here are some of the horrific details.

For this story, CBS 21 researched what government programs are available to a single mother of two making $19,000 a year. What we found was incredible. Our family would be eligible for $14,976 in free day care, another $13,400 for Head Start and Early Head Start, $7,148 in housing vouchers, $6,500 for weatherization projects, $400 to pay heating bills, $480 a year for a cell phone, with an extra $230 for a land line, and $182 in free legal advice. The family would get more than $6,028 in food assistance and another $6,045 in medical assistance. The mother is eligible for $5,500 in Pell Grants for school with an additional $12,000 for the Education Opportunity Grant; SMART Grant; and TEACH Grant. Our family would also get $6,800 in tax credits, and $1,900 in withholding would be returned. Add it up and this family can get $81,589 in free assistance.

There’s nothing in the story to suggest that Ms. Cogan is utilizing all these programs, but the plethora of available goodies certainly helps to explain why so many people decide it’s easier to be moochers rather than producers.

Which also explains why the welfare state is a recipe for ever-increasing dependency, as shown by this famous set of cartoons.

Which also causes a sluggish economy, as illustrated by this Chuck Asay cartoon.

No wonder the share of households taking something from the government has been increasing. And no wonder the poverty rate stopped falling once the government’s so-called War on Poverty began.

P.S. Most stories about welfare are pathetic, as we see from this dependency contest featuring the “Connecticut Kid” vs the “English Loafer.” But the welfare state also breeds more bizarre behaviors.

• In the battle of the bums, we’ve had the spectacle of “Diaper Man” vs “Footless Hans.”
• In the contest for most despicable moocher, we have the “Florida Pedophiles” vs the “Gimme Babymaker.”
• In the perverse challenge match to subsidize one’s enemies, there’s the “Australian Jihadist” vs the “French terror suspect.”

P.P.S. Are you subsidizing bad behavior? Click here to see a map revealing which states offer the most extravagant welfare benefits.

P.P.P.S. Share this video to help others understand the high cost of the welfare state.

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An Honest Liberal Confronts the Problem of Government Dependency

I’ve written and pontificated about the problem of government-created dependency and how the welfare state traps people in poverty.

I also shared this dramatic chart showing how redistribution programs create shockingly high implicit marginal tax rates for those with modest incomes.

But when a liberal writer for the New York Times basically comes to the same conclusion, that’s a sign that there may finally be some consensus about the need for reform.

Here’s some of what Nicholas Kristof wrote, beginning with an acknowledgement of the welfare state’s perverse incentives.

This is what poverty sometimes looks like in America: parents here in Appalachian hill country pulling their children out of literacy classes. Moms and dads fear that if kids learn to read, they are less likely to qualify for a monthly check for having an intellectual disability. …This is painful for a liberal to admit, but conservatives have a point when they suggest that America’s safety net can sometimes entangle people in a soul-crushing dependency. …Some young people here don’t join the military (a traditional escape route for poor, rural Americans) because it’s easier to rely on food stamps and disability payments. Antipoverty programs also discourage marriage: In a means-tested program like S.S.I., a woman raising a child may receive a bigger check if she refrains from marrying that hard-working guy she likes. Yet marriage is one of the best forces to blunt poverty. In married couple households only one child in 10 grows up in poverty, while almost half do in single-mother households. Most wrenching of all are the parents who think it’s best if a child stays illiterate, because then the family may be able to claim a disability check each month.

Lives ruined by dependency?

He then gives an example of the SSI program for kids and how it has ballooned over time .

About four decades ago, most of the children S.S.I. covered had severe physical handicaps or mental retardation that made it difficult for parents to hold jobs — about 1 percent of all poor children. But now 55 percent of the disabilities it covers are fuzzier intellectual disabilities short of mental retardation, where the diagnosis is less clear-cut. More than 1.2 million children across America — a full 8 percent of all low-income children — are now enrolled in S.S.I. as disabled, at an annual cost of more than $9 billion. That is a burden on taxpayers, of course, but it can be even worse for children whose families have a huge stake in their failing in school. Those kids may never recover: a 2009 study found that nearly two-thirds of these children make the transition at age 18 into S.S.I. for the adult disabled. They may never hold a job in their entire lives and are condemned to a life of poverty on the dole — and that’s the outcome of a program intended to fight poverty.

By the way, you won’t be surprised to learn that the disability program for adults also has expanded dramatically. The simple lesson (though folks in Washington seem oblivious) is that if you subsidize self-destructive behavior, you’ll get more of it.

Kristof is honest enough to recognize the problem, but that doesn’t mean he agrees with libertarians about the solution.

I don’t want to suggest that America’s antipoverty programs are a total failure. On the contrary, they are making a significant difference. Nearly all homes here in the Appalachian hill country now have electricity and running water, and people aren’t starving. …kids…have replaced the elderly as the most impoverished age group in our country. Today, 22 percent of children live below the poverty line. Of American families living in poverty today, 8 out of 10 have air-conditioning, and a majority have a washing machine and dryer. Nearly all have microwave ovens. What they don’t have is hope. …A growing body of careful research suggests that the most effective strategy is to work early on children and education, and to try to encourage and sustain marriage. …Early interventions are not a silver bullet, and even programs that succeed as experiments often fall short when scaled up. But we end up paying for poverty one way or another, and early childhood education is far cheaper than adult incarceration. …Look, there are no magic wands, and helping people is hard.

I don’t think his hopes of early childhood education are a silver bullet, particularly if it results in a program run from Washington. But I’ll also admit that libertarians don’t really have a solution.

To a large extent, this is an intergenerational problem, with kids learning bad habits from adults. And that’s true for inner-city blacks and rural whites, as well as every demographic in between. I’m happy to make the case that the welfare state helped to create the problem (or at least subsidized it and made it worse), but simply ending the welfare state probably won’t make everything better.

It’s a lot easier to squeeze the toothpaste out of the tube than to put it back in. Once social capital erodes, it very difficult to restore it. That’s why it’s a mistake to create new programs in the first place. As this famous set of cartoons illustrates, welfare state programs always start small, but that’s not where they end up.

P.S. When the welfare state destroys the lives of children, there’s no room for any humor. But at least we can laugh about the absurdity of disability programs for adults. This joke captures the perverse incentives of the programs, but these real-world horror stories about Diaper Man and Footless Hans are only funny in a twisted way. And this Greek story about rewarding pedophiles with disability payments is beyond satire.

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The Fiscal Burden of the Welfare State: A Picture Says a Thousand Words

I’ve previously shared an amazing chart put together by a Cato colleague showing that massive increases in spending and staff have had no positive impact on educational performance.

Now here’s a chart that is equally remarkable, showing that we spend about $60,000 on various welfare programs for every poor household in America. And what are we getting for that giant expenditure of money? Well, as this other chart shows, our progress in the fight against poverty came to a screeching halt right about the time that the politicians in Washington launched the so-called War on Poverty.

This video contains more analysis, for those who want to learn about the best way of actually reducing poverty. It’s important to remember, after all, that the welfare state has a human cost that is just as important as the fiscal cost.

If you want more powerful pictures and info-graphics, here are some of my favorites.

• Exposing Obama’s miserable jobs performance.
• The importance of saving and investment if we want workers to enjoy higher wages.
• The TSA’s Orwellian (and incompetent) approach to airline security.
• Showing how the burden of government spending has exceeded the growth of the economy’s productive sector.

And I suppose I should share, once again, my favorite poster about government.

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For Once, I Hope Paul Krugman Is Right

It’s not often that I read something by Paul Krugman and think, “Good point, I hope he’s correct.”

After all, I had to correct Krugman’s inaccurate analysis of Estonia, and also point out the errors in what he wrote about the United Kingdom. And I also noted mistakes he made when writing about Canada and France.

And let’s not forget his absurd assertion that it would be good for the U.S. economy if aliens threatened to attack!

It certainly seems as if he specializes in making mistakes.

But he has just written something that sort of makes sense.

In pushing for draconian cuts in Medicaid, food stamps and other programs that aid the needy, Mr. Ryan isn’t just looking for ways to save money. He’s also, quite explicitly, trying to make life harder for the poor — for their own good. In March, explaining his cuts in aid for the unfortunate, he declared, “We don’t want to turn the safety net into a hammock that lulls able-bodied people into lives of dependency and complacency, that drains them of their will and their incentive to make the most of their lives.”

To be more specific, I hope Krugman is right in that Ryan wants “to make life harder for the poor” if the alternative is to have their lives stripped of meaning by government dependency.  And I agree that it will be “for their own good” if they’re motivated to join the workforce.

To be sure, Krugman wants readers to reach the opposite conclusion. Even though the War on Poverty seems to have put an end to the progress we were making (see this remarkable chart), Krugman equates spending money with compassion.

And I suppose I should point out that he is completely wrong (using dishonest Washington budget math) when writing about “draconian cuts” since Cong. Ryan is merely proposing to slow down how fast government spending is growing.

P.S. For those who want more information, watch this video to learn about how government anti-poverty programs hurt the poor.

P.P.S. Check out this map to see how various U.S. states subsidize poverty.

P.P.P.S. To get your blood boiling, read this horrifying post about how a left-wing international bureaucracy conspiring with the Obama White House to redefine poverty in ways that make America look bad.

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Shame on the Associated Press for Sloppy and/or Biased Reporting about Poverty

In a recent post about Brian Ross and the despicable behavior of ABC News, I included examples of what I categorized as deliberate and accidental media bias.

Here’s a good (or perhaps I should say bad) example of accidental bias, demonstrating how statist premises get incorporated into news reports.

Here’s how the Associated Press began a recent story about expected increases in the poverty rate.

The ranks of America’s poor are on track to climb to levels unseen in nearly half a century, erasing gains from the war on poverty in the 1960s amid a weak economy and fraying government safety net.

At first glance, the story seems fine. After all, I’ve already reported on the record number of people living in poverty under Obama’s watch.

But my complaint is about the latter part of the sentence, which blithely assumes that the so-called War on Poverty improved the lives of poor people.

Check out this chart, which I first posted back last September.

As you can see, the poverty rate in America was falling at a rapid clip, but progress stopped once the so-called War on Poverty began. And ever since, the poverty rate has stayed relatively constant, oscillating between 11 percent-15 percent.

To be sure, this chart doesn’t prove that Lyndon Johnson’s redistribution programs – such as Medicaid – halted the progress that was being made.

But surely these numbers show that the folks at the Associated Press were smoking crack when they wrote that the War on Poverty led to “gains.”

The left, incidentally, does have their spin on the story. They basically cherry pick two data points and make it seem as if the diminished rate of progress during that time period was because of the War on Poverty.

…poverty never fell below a 1973 low of 11.1 percent. That low point came after President Lyndon Johnson’s war on poverty, launched in 1964, created Medicaid, Medicare and other social welfare programs. “I’m reluctant to say that we’ve gone back to where we were in the 1960s. The programs we enacted make a big difference…,” Edelman said.

That’s creative, but not convincing. What the data really show is that we were making good progress before LBJ imposed all his redistribution. But that rapid progress turned into slow progress and then basically came to a grinding halt within a couple of years. If that’s evidence of success, I’d hate to see what failure looks like.

If anything, the data show the benefits of moving policy in the other direction. During the Reagan years, for instance, redistribution programs were constrained and the poverty rate began to fall. And during the Clinton years, welfare reform and other market-friendly policies led to another drop in the poverty rate.

But that’s a separate issue. The main point of this post is to expose a remarkably flawed and inaccurate bit of bias embedded in an Associated Press report. I suspect it was accidental bias, presumably from some reporter who lives in a bubble and automatically assumed that government programs are like fairy dust and have magical effects.

In reality, of course, government programs tend to make problems worse, and that’s definitely been the case with the supposed War on Poverty. We have record levels of food stamp dependency, with more and more people being trapped in lives of dependency.

But watch this video and decide for yourself.

P.S. With support from left-wing international bureaucracies such as the OECD,  the Obama White House wants to rig the poverty numbers to justify even more redistribution.

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The Toulouse Child Killer: Another Case of Welfare Being Used to Subsidize Terrorism?

I’m not a big fan of welfare programs, in part because I sympathize with taxpayers (check out these outrageous examples of waste) but mostly because redistribution programs subsidize poverty and trap people in lives of despair.

But as I wrote in 2010, the most perverse form of welfare is when governments give handouts to Islamo-fascist radicals. This has happened in the United Kingdom and Germany, and the video at the link about the taxpayer-financed radical cleric in Australia is absolutely horrifying.

It seems like this foolishness is happening in France as well. In a story about the recent horrific murders by Mohammed Merah, the New York Post included this blurb.

All the while, Merah, a petty criminal on welfare, was ostensibly under surveillance by French intelligence.

And a New Zealand TV station included this tidbit.

Etelin said he knew Merah since he was about 17, and described his life as typical for many teenagers and young men in poor French housing projects who get involved in criminal activity. “His mother couldn’t control him, his father was totally absent, his sister … also told me that she couldn’t exercise any influence over him,” the lawyer said.

Isn’t that so typical. Not only welfare, but also government housing, and a system of handouts that facilitates an absent father.

I’m not saying – or even implying – that welfare programs cause terrorism. Millions of people live off government and never go out and murder others. And it may turn out that Merah and his family were low-level moochers, making this aspect of the story worthy of nothing other than an asterisk.

But I am saying that welfare breeds idleness and despair, and in some cases it enables reprehensible behavior (as seen by this story about a couple of disgusting leeches who wanted to impregnate a 12-year old girl in hopes of getting a bigger handout).

For those interested, this video looks at the broader issue of welfare, and it includes this graph showing how the so-called War on Poverty has probably resulted in more destitution.

And here’s one final story, from the U.K., about the horrible human cost of the welfare state.

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To Boost Obama’s Redistribution Agenda, OECD Pushes Crazy Assertion that Poverty Is Higher in the U.S. than in Greece, Hungary, Portugal, and Turkey

Supporters of individual liberty and national sovereignty have been skeptical of the United Nations, and with good reason. With the support of statists such as George Soros, the U.N. pushes for crazy ideas such as global taxation and global currency.

But there’s another international bureaucracy, also funded by American tax dollars, that is even more pernicious. The Paris-based Organization for Economic Cooperation and Development (OECD) has the same leftist ideology as the U.N., but it actually has some ability to change policy.

As you can imagine, this always means bigger government and more statism. Here are some examples.

• The OECD has an anti-tax competition project designed to prop up Europe’s bankrupt welfare states.
• The OECD is pushing a “Multilateral Convention” that is designed to become something akin to a World Tax Organization, with the power to persecute nations with free-market tax policy.
• The OECD has endorsed Obama’s class-warfare agenda, publishing documents endorsing “higher marginal tax rates” so that the so-called rich “contribute their fair share.”
• The OECD pulled off a hat trick of bad policy in a 2010 document, promoting a value-added tax, Obama’s global warming agenda, and failed Keynesian stimulus.
• The OECD endorsed Obamacare policies, as I explain in this video.
• The OECD even advocates higher taxes when nations are in the middle of economic crisis.
• The OECD also is pushing for higher taxes in Latin America, based on the odd notion that those nations should copy Europe’s failed welfare states.

With this dismal track record, you probably won’t be surprised to learn that the Paris-based bureaucracy has a new propaganda initiative that seeks to bolster a left-wing redistribution agenda. And as part of this new scheme, it has put together numbers that supposedly show that there is more poverty is the United States than there is in bankrupt and backwards nations such as Greece, Hungary, Portugal, and Turkey.

This isn’t April 1, and I’m not joking. Here’s a chart, produced from the data at this OECD website, which you get to by clicking the “Poverty: Country comparisons” link on this OECD webpage.

You may be wondering whether the bureaucrats at the OECD who put together these numbers are smoking crack or high on crystal meth. Well, they certainly can afford lots of drugs since they get tax-free salaries (just like their counterparts at other international bureaucracies), but these numbers are the not the result of some ketamine-fueled binge.

Instead, the OECD is lying. The website refers to “poverty rate” and “poverty threshold” and “poverty measure,” but the OECD is not measuring poverty. Instead, they have concocted a new – and deliberately misleading – set of data that instead measures the distribution of income.

And if you’re wondering where they got this crazy idea, you probably won’t be surprised to learn that this is a scheme developed by the Obama Administration and it is designed so that “poverty” is only reduced if incomes become more equal, not if poor people become better off.

Even moderates such as Robert Samuelson recognize this is absurd, and here is some of what he wrote.

…the new definition has strange consequences. Suppose that all Americans doubled their incomes tomorrow, and suppose that their spending on food, clothing, housing and utilities also doubled. That would seem to signify less poverty — but not by the new poverty measure. It wouldn’t decline, because the poverty threshold would go up as spending went up. Many Americans would find this weird: People get richer but “poverty” stays stuck.

The most amazing thing about this crazy approach is that it makes it seem as if America has more poverty than nations such as Bangladesh, even though the average “poor” American has much higher living standards than all but the wealthiest people in the developing world.

And it also generates the laughable numbers in the OECD dataset, showing that Turkey and Portugal have less poverty than the United States.

The main thing to understand, though, is that this new approach is part of an ideological campaign to promote bigger government and more redistribution. Which is very much consistent with the OECD’s overall agenda, as this video explains.

The real outrage is that American taxpayers finance the lion’s share of the OECD budget, even though it is a hard-left organization that pushes policies that are contrary to U.S. interests.

And this is why I wrote that defunding the OECD is a minimal test of fiscal seriousness for lawmakers on Capitol Hill.

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Welfare Humor that Will Get You Pissed Off

After a series of posts making fun of libertarians (here, here, here, here, and here), it’s time to aim some humor at the left. Even if it means a lame pun in the title.

This poster is funny, but it also makes a serious point about whether there should be behavioral restrictions on people who want to live off taxpayers (sort of akin to the debate about whether food stamp recipients should be allowed to buy junk food).

My view is that the answer to the welfare problem is decentralization. Let fifty states and thousands of communities take responsibility for redistribution policy.

This will mean diversity and innovation, which will help give us answers to how to help the genuinely needy with ripping off taxpayers and/or trapping poor people in lives of dependency.

Maybe drug testing is a good idea. Maybe it’s not. But we won’t find out with a one-size-fits-all policy from Washington.

This interview and this video have more information for those who want a more detailed look at anti-poverty issues.

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Margaret Thatcher Debunks the Leftist Agenda on Income Equality

The statists are making a big issue out of income inequality, hoping to convince ordinary Americans that redistribution is their only hope for a better life.

I’ve explained with a pizza analogy that this is horribly misguided because it falsely assumes the economy is a fixed pie.

Simply stated, it doesn’t make sense – or help anybody – if inequality is reduced by policies that hurt everyone, but happen to hurt upper-income people more than lower-income people.

Moreover, redistribution tends to create a “poverty trap” as people get seduced by dependency.

That’s why I’ve argued that economic growth is the best way of helping the less fortunate.

But I have to admit that Margaret Thatcher does a much better job of eviscerating the left’s agenda on this issue.

While it’s inspiring to watch Thatcher in action, it’s also painful to realize that the current crop of GOP presidential candidates seems generally incapable of making similar arguments. Can you imagine, for instance, Mitt Romney making these remarks?

Last but not least, Thatcher’s remarks remind me about Churchill’s famous quote, which is very appropriate for this discussion.

The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of misery.

And if you want real-world examples, look at this chart comparing North Korea and South Korea, or this chart comparing Chile, Argentina, and Venezuela. Now ask yourself a simple question: Which societies have generated more prosperity and higher living standards for ordinary people?

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Is Ireland’s Michael Higgins an Economic Illiterate or a Cynical Hack

I’ve always been proud of my Irish heritage, but now I’m having to reconsider. As is so often the case when something goes awry, the blame belongs to a politician (this Craig Ferguson joke is right on the mark).

Michael Higgins, the President-Elect of Ireland, has lived a very comfortable life sucking on the government teat. He began his adult life as a sociologist in academia. He then moved into politics, and for decades enjoyed lucrative pay as a member of the political elite (well above $100,000 annually in recent years).

Now he’ll pull in more than $300,000 per year for a largely ceremonial job as Ireland’s President. As the old saying goes, nice work if you can get it. This guy’s definitely part of the top 1 percent.

He’s also an economic illiterate or a cynical hack who apparently thinks noble poverty is a good idea for the other 99 percent.

Here’s some of what the Daily Mail reported about one of his recent speeches.

Michael D Higgins launched a savage attack on the Celtic Tiger in his first speech as President elect. In his acceptance speech, the Labour Party candidate…rejected the years of materialism and selfishness that drove the country to ruin. …Michael D declared: ‘We leave behind a narrow individualism that valued the person for what was assumed to be their accumulated wealth but neglected the connection between the person, the social, the community and the nation. …Mr Higgins called on Irish people to return to ‘co-operative and collective values’.

Isn’t this just wonderful? This pampered and cosseted member of the political elite thinks that Ireland somehow was demeaned by being the Celtic Tiger. Does this mean he wants to go back the mid-1980s, before Ireland began to reform? Back when government was consuming more than 50 percent of the nation’s output? Back when the the corporate tax rate was 50 percent? Back when other tax rates were at extortionary levels?

If that’s true, he wants to dramatically reduce the living standards of the Irish people.

Here’s a chart based on World Bank data for gross domestic product and gross national income.

Prior to the market-based reforms of the Celtic Tiger era, Ireland was a relatively poor nation with per-capita income and output well below $10,000. Today, by contrast, output and income are four or five times higher.

But here are two important caveats. First, the World Bank GDP/GNI numbers are not adjusted for inflation, so the chart overstates the rise in living standards. This World Bank data suggests that the price level in Ireland roughly doubled between 1985 and 2010, so the people of Ireland are perhaps “only” twice as rich as they were in the era before free-market reform.

The second caveat is that some of Ireland’s prosperity in recent years was hollow, the result of a real estate bubble. But even with the big decline since 2007-2008, the Irish people are still much better off than they were a generation ago.

But Mr. Higgins apparently doesn’t approve of this big jump in living standards.

He’s against “materialism,” so let’s look at some real world examples of how the lives of ordinary people have improved.

Maybe I’m just old fashioned, but I’d rather live in a “selfish” world that gives me doctors, cars, and central heating.

But to a member of the political elite like Mr. Higgins, this kind of prosperity probably spoils people and makes them uppity. Better for people to live noble lives of poverty and deprivation.

Last but not least, this post isn’t an endorsement of the “Irish model.” Yes, there are some admirable policies in Ireland, most notably the 12.5 percent corporate tax. And Ireland’s score from the Economic Freedom of the World has jumped from 6.3 in 1985 to 7.4 in 2009.

But that’s considerably below free-market jurisdictions such as Hong Kong (9.0) and Singapore (8.7).

Simply stated, government is too big in Ireland and many policies are grossly inconsistent with sound economics.

But if I get to choose between today’s Irish economy and the pre-Celtic Tiger economy of the early 1980s, it’s not a close call.

Maybe Mr. Higgins should spend a year or two living at 1985 living standards before he makes another jackass speech.

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Tom Sowell: So Many Left-Wing Hoaxes to Debunk, So Little Time

I recently posted an excellent video showing how the War on Poverty has been a disaster for both taxpayers and poor people.

Let’s now look at a specific example of the income-redistribution racket.

Professor Thomas Sowell has a superb column, which begins by noting that the left tried to build support for more income redistribution by falsely claiming that there was a hunger crisis in America.

When that silly assertion was debunked, in part because of evidence that obesity is a bigger problem in the low-income community, the statists suddenly switched gears and invented a new crisis. Now, we are told, healthy food is too costly.

Prof. Sowell decimates this absurd argument.

Ironically, the one demonstrable nutritional difference between the poor and others is that low-income women tend to be overweight more often than others. That may not seem like much to make a political issue, but politicians and the media have created hysteria over less. The political left has turned obesity among low-income individuals into an argument that low-income people cannot afford nutritious food, and so have to resort to burgers and fries, pizzas and the like, which are more fattening and less healthful. But this attempt to salvage something from the “hunger in America” hoax collapses like a house of cards when you stop and think about it. Burgers, pizzas and the like cost more than food that you can buy at a store and cook yourself. If you can afford junk food, you can certainly afford healthier food. An article in the New York Times of September 25th by Mark Bittman showed that you can cook a meal for four at half the cost of a meal from a burger restaurant.

Seems like that should settle the argument. But give the leftists credit for creativity. They invent another problem which also requires big government.

Mr. Bittman says that the problem is “to get people to see cooking as a joy.” For this, he says, “we need action both cultural and political.” In other words, the nanny state to the rescue! Since when are adult human beings supposed to do only those things that are a joy? I don’t find any particular joy in putting on my shoes. But I do it rather than go barefoot. I don’t always find it a joy to drive a car, especially in bad weather, but I have to get from here to there. An arrogant elite’s condescension toward the people — treating them as children who have to be jollied along — is one of the poisonous problems of our time. It is at the heart of the nanny state and the promotion of a debilitating dependency that wins votes for politicians while weakening a society. Those who see social problems as requiring high-minded people like themselves to come down from their Olympian heights to impose their superior wisdom on the rest of us, down in the valley, are behind such things as the hunger hoax, which is part of the larger poverty hoax.

With his usual clarity, Sowell then points out how the politicians and bureaucrats have a big self interest in perpetuating these myths.

Those who believe in an expansive, nanny state government need a large number of people in “poverty” to justify their programs. They also need a large number of people dependent on government to provide the votes needed to keep the big nanny state going. Politicians, welfare state bureaucrats and others have incentives to create or perpetuate hoaxes, whether about poverty in general or hunger in particular. The high cost to taxpayers is exceeded by the even higher cost of lost opportunities for fulfillment in their lives by those who succumb to the lure of a stagnant life of dependency.

In other words, the people administering the programs – Walter Williams calls them “poverty pimps” – are the ones who benefit.

The biggest victims, on the other hand, are the less fortunate people who get trapped in lives of dependency and despair.

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New Video Shows the War on Poverty Is a Failure

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.

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Mirror, Mirror, On the Wall, Which State Has the Biggest Welfare Benefits of All?

The Center for Budget and Policy Priorities is a left-wing group in Washington that advocates for bigger government and higher taxes. In an effort to promote more redistribution, they recently put together a map showing how welfare benefits varied by state.

We’re supposed to look at the map and conclude that welfare benefits are too low, but I draw the opposite conclusion. I’m stunned that some states are providing welfare checks greater than 30 percent of the poverty level. And some are even sending out checks greater than 40 percent of the poverty level.

The folks at CBPP conveniently neglect to mention two critical pieces of information.

1. The poverty line is set considerably above a level that would indicate material deprivation. According to Census Bureau data, for instance, a single person with income of $11,139 is considered in poverty and a family of four with income of $22,113. That’s far above the average level of income in most nations of the world.

2. Welfare checks are just one of many forms of redistribution, and the data used to create the map do not count food stamps, Medicaid, housing subsidies and a plethora of other means-tested programs. As Robert Rector of the Heritage Foundation has documented, poor people experience surprisingly high levels of consumption.

This is not to say that life is easy for people living off the government. But it also true that the left is being disingenuous when they try to convince people that more redistribution is necessary to keep people from third world-style suffering.

The real tragedy of the welfare state, however, goes well beyond the fiscal burden. The human toll is far worse, as redistribution subsidizes dysfunctional behavior and traps people in dependency.

The problem could be partially fixed by getting the federal government out of the business of income redistribution. Welfare reform in the 1990s moved the ball in the right direction, and that success could be replicated by block-granting Medicaid and adopting other policies that put state and local governments back in charge.

But federalism is only part of the answer. The best way of dealing with poverty is economic growth, which is the point I make in this online video debate for PBS.

But welfare bureaucracies don’t have much incentive to actually reduce poverty. After all, as Walter Williams has explained, the so-called War on Poverty is a great gig for the tens of thousands of bureaucrats who get to oversee the programs.

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Dramatic Increase in Poverty Rate: One Small Step for Obama, One Giant Step for the So-Called War on Poverty

The Census Bureau has just released the 2010 poverty numbers, and the new data is terrible.

There are now a record number of poor people in America, and the poverty rate has jumped to 15.1 percent.

But I don’t really blame President Obama for these grim numbers. Yes, he’s increased the burden of government, which doubtlessly has hindered the economy’s performance and made things worse, but the White House crowd legitimately can argue that they inherited a crummy situation.

What’s really striking, if we look at the chart, is that the poverty rate in America was steadily declining. But then, once President Lyndon Johnson started a “War on Poverty,” that progress came to a halt.

As I’ve explained before, the so-called War on Poverty has undermined economic progress by trapping people in lives of dependency. And this certainly is consistent with the data in the chart, which show that the poverty rate no longer is falling and instead bumps around between 12 percent and 15 percent.

This is bad news for poor people, of course, but it’s also bad news for taxpayers. The federal government, which shouldn’t have any role in the field of income redistribution, has squandered trillions of dollars on dozens of means-tested programs. And they’ve arguably made matters worse.

By the way, just in case you think I’m being too easy on Obama, read this post about how the Administration is considering a terrible plan to re-define poverty in order to justify ever-larger amounts of redistribution.

I fully agree that he President’s policies definitely have made – and will continue to make – matters worse. But the fundamental problem is 40-plus years of a misguided “War on Poverty” by the federal government.

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What’s Better for Poor People, Economic Growth or Redistribution?

I took part in a thirty-minute online Skype debate for PBS on income inequality, and they boiled it down to the 4:44 youtube video embedded below.

You probably won’t be surprised to learn that I said economic growth was the key. I don’t want to re-slice the pie. I want to make it bigger.

I wish I had used my example of Chile v. Argentina v. Venezuela. Or my more recent post on Singapore’s remarkable growth.

One thing I did mention is that the poverty rate was falling for much of U.S. history, but then stopped falling once the so-called War on Poverty began. I pointed out that this was compelling evidence that spending $trillions on income redistribution was trapping people in poverty.

Unfortunately, this part was edited out, perhaps because the lefties at PBS didn’t want more people exposed to this inconvenient truth. Here’s what wasn’t left on the editing room floor.

I’m not sure how they formatted the video, but at least it makes me look skinny.

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A Despicable Human Being Created by the British Welfare State?

Every so often, I can’t resist condemning someone for grossly immoral behavior.

I beat up on Robert Murphy for stealing the value of someone else’s property.

I attacked Olga Stefou for symbolizing the looter-class mentality of Greece.

And I mocked Michael Wolfensohn for ratting out a couple of kids who were having an unlicensed (gasp!) bake sale.

We now have an addition to our rogue’s gallery of awful people. We don’t know her name, but she was interviewed on TV because one of her 11 children was in court for rioting. Here’s some of the Telegraph’s report (also a video at the link).

A 13-year-old boy has walked free from court after admitting smashing up a shop with a stolen golf club as his mother said the riots are because the government does “f*** all” for children. …She is on benefits, does not live with the boy’s father and has 10 other children, the court heard. …The boy had been caught on CCTV during the trouble at Salford Precinct spraying a fire extinguisher around before pulling down metal shutters from a Cash Converters shop. He then crawled inside and used a £100 golf club he had stolen to smash windows. The shop suffered £20,000 in damage. His mother described him as a ”good lad” who had never been in any trouble.

In addition to not knowing her name, we don’t know how long she has been on welfare (“benefits” to the Brits) or whether the boy’s father is also the father of the other ten kids.

Regardless, I imagine she gets a nice-sized check.

I may be wrong (indeed, I hope I am), but I suspect that this story is a tragic case study of a welfare system creating a dysfunctional household filled with people who have adopted an entitlement mentality.

We know this happens, as illustrated by this short interview.

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Exaggerating Poverty for Political Gain

Is America filled with tens of millions of people suffering from harsh material deprivation? That’s what the pro-redistribution crowd wants you to think, but a new report from the Heritage Foundation demolishes that stereotype.

Here are some of the most remarkable findings in the study.

For most Americans, the word “poverty” suggests destitution: an inability to provide a family with nutritious food, clothing, and reasonable shelter. …Yet if poverty means lacking nutritious food, adequate warm housing, and clothing for a family, relatively few of the more than 30 million people identified as being “in poverty” by the Census Bureau could be characterized as poor. While material hardship definitely exists in the United States, it is restricted in scope and severity. …As scholar James Q. Wilson has stated, “The poorest Americans today live a better life than all but the richest persons a hundred years ago.” In 2005, the typical household defined as poor by the government had a car and air conditioning. For entertainment, the household had two color televisions, cable or satellite TV, a DVD player, and a VCR.

Here’s one of the most remarkable findings from the report.

…the typical poor American had more living space than the average European.

And here’s the key data on healthcare and nutrition.

The typical poor American family was also able to obtain medical care when needed. By its own report, the typical family was not hungry and had sufficient funds during the past year to meet all essential needs. …Consumer items that were luxuries or significant purchases for the middle class a few decades ago have become commonplace in poor households. …On average, the poor are well nourished. The average consumption of protein, vitamins, and minerals is virtually the same for poor and middle-class children. In most cases, it is well above recommended norms. Poor children actually consume more meat than higher-income children consume, and their protein intake averages 100 percent above recommended levels. In fact, most poor children are super-nourished and grow up to be, on average, one inch taller and 10 pounds heavier than the GIs who stormed the beaches of Normandy in World War II.

So why does this issue matter? Because the left understands that an agenda of redistribution is more likely to be successful if they can deceive the American people about the true scope of poverty. This polling data cited in the report shows why the left is so anxious to perpetuate falsehoods about how many people suffer from genuine deprivation.

…a poll conducted in June 2009 asked a nationally representative sample of the public whether they agreed or disagreed with the following statement: “A family in the U.S. that has a decent, un-crowded house or apartment to live in, ample food to eat, access to medical care, a car, cable television, air conditioning and a microwave at home should not be considered poor.” A full 80 percent of Republicans and 77 percent of Democrats agreed that a family living in those living conditions should not be considered poor.

Last but not least, we find out that a bad situation may become even worse. The left already uses a grossly exaggerated definition of poverty for political gain. But that’s not enough. As I noted in an earlier post, the Obama Administration wants to use a new methodology that would – no joke – show that there is more poverty in America than Bangladesh.

There is a vast gap between poverty as understood by the American public and poverty as currently measured by the government. Sadly, President Barack Obama plans to make this situation worse by creating a new “poverty” measure that deliberately severs all connection between “poverty” and actual deprivation. This new measure will serve as a propaganda tool in Obama’s endless quest to “spread the wealth” and will eventually displace the current poverty measure. Under the new measure, a family will be judged poor if its income falls below certain specified income thresholds or standards. There is nothing new in this, but unlike the current poverty income standards, the new income thresholds will have a built-in escalator clause. They will rise automatically in direct proportion to any rise in the living standards of the average American. …Another paradox of the new poverty measure is that countries such as Bangladesh and Albania will have lower poverty rates than the U.S.—even though the actual living conditions in those countries are extremely low—simply because they have narrower distribution of incomes, albeit very low incomes.

There is one thing that’s worth adding to all the good information cited from the study. Regardless of how the poverty rate is defined, the massive increase in federal spending on anti-poverty programs has been a terrible failure. Trillions of dollars have been spent since the “War on Poverty” began, but the poverty rate has been flat, averaging about 13 percent.

But what’s most remarkable is that the poverty rate was steadily falling before the so-called War on Poverty began. In other words, once the federal government began subsidizing poverty, we stopped making progress.

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How Redistribution Creates a Poverty Trap

I’ve beaten up on Newt Gingrich for his views on global warming and his attack on the Ryan budget plan, but I’m completely on his side in the faux controversy about whether it is racist to call Barack Obama the “food stamp president.”

This story from ABC News should worry everybody, regardless of whether the people getting trapped in government dependency are white, black, brown, yellow, or green with yellow polka dots.

Congress is under pressure to cut the rapidly rising costs of the federal government’s food stamps program at a time when a record number of Americans are relying on it. The House Appropriations Committee today will review the fiscal year 2012 appropriations bill for the Department of Agriculture that includes $71 billion for the agency’s “Supplemental Nutrition Assistance Program.” That’s $2 billion less than what President Obama requested but a 9 percent increase from 2011, which, critics say, is too large given the sizeable budget deficit. A record number of Americans — about 14 percent — now rely on the federal government’s food stamps program and its rapid expansion in recent years has become a politically explosive topic. More than 44.5 million Americans received SNAP benefits in March, an 11 percent increase from one year ago and nearly 61 percent higher than the same time four years ago.

Most people focus on the huge burden that the food stamp program imposes on taxpayers, which surely is significant, but there is another economic cost that is equally worrisome, and it applies to all income redistribution programs. Whenever the government gives people money simply because their incomes are below a certain level, that creates a poverty trap. More specifically, because people lose benefits for earning more income, they are penalized with very onerous implicit marginal tax rates for climbing the economic ladder.

This isn’t intuitive, so here’s a back-of-the-envelope hypothetical example. Let’s assume you are a low-income person who wants a better life and you have a chance to earn an additional $1,000. How much better off will you be, and will it be worth the costs you might incur (non-pecuniary costs such as the loss of leisure and pecuniary costs such as commuting and child care)?

To answer that question, let’s assume your official tax burden on that additional income is 10 percent for federal income tax, 15 percent for payroll tax, and 5 percent for state income tax. You may not even be aware of the employer portion of the payroll tax, so let’s drop that to 7.5 percent (actually 7.65 percent, but let’s keep this simple). And while state taxes are deductible, the vast majority of people with modest incomes don’t utilize itemized deductions. So the marginal tax rate on this additional income, depending on what assumptions you want to make, is between 20 percent and 25 percent.

So if you earn an additional $1,000, your disposable income only increases by about $750-$800. Is that worth it? Maybe, but maybe not, depending on the costs you incur to earn that income. In any event, the marginal tax rate is rather steep for a low-income person, you may be thinking.

But it gets worse. Let’s say that you lose $15 of government handouts for every $100 of additional income your earn. So when you earn $1,000 of income, you only keep $750-$800, but you also have to give up $150 of goodies from the government – meaning your effective disposable income only rises by $600-$650.

This means that your implicit marginal tax rate on earning more money is actually somewhere between 35 percent and 40 percent. In other words, your marginal tax rate is at least as high as the tax rate on rock stars and professional athletes.

Here’s a chart showing the number of food stamp recipients. It certainly looks like America is becoming a food stamp nation. But if you want to see an even more disturbing image, look at the second chart in this article from the Mises Institute. You’ll see that my hypothetical example dramatically understates the marginal tax rate on people trying to join the middle class. As a taxpayer, I don’t like the cost of the food stamp program. As an economist, I hate the high marginal tax rates caused by income redistribution programs.

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A Rather Depressing Article about the Human Cost of the Welfare State

This story from the Manhattan Institute’s City Journal makes the point, excerpted below, that the welfare state subsidizes dysfunctional behavior. But read the story to understand how big government destroys lives, ruins families, and creates inter-generational poverty. A very powerful, albeit very depressing article. It’s basically the American version of this grim news report from England.

Connecticut is among the most generous of the states to out-of-wedlock mothers. Teenage girls like Nicole qualify for a vast array of welfare benefits from the state and federal governments: medical coverage when they become pregnant (called “Healthy Start”); later, medical insurance for the family (“Husky”); child care (“Care 4 Kids”); Section 8 housing subsidies; the Supplemental Nutrition Assistance Program; cash assistance. If you need to get to an appointment, state-sponsored dial-a-ride is available. If that appointment is college-related, no sweat: education grants for single mothers are available, too. Nicole didn’t have to worry about finishing the school year; the state sent a $35-an-hour tutor directly to her home halfway into her final trimester and for six weeks after the baby arrived. In theory, this provision of services is humane and defensible, an essential safety net for the most vulnerable—children who have children. What it amounts to in practice is a monolithic public endorsement of single motherhood—one that has turned our urban high schools into puppy mills. The safety net has become a hammock.

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Does the War on Poverty Fight Destitution or Subsidize It?

The Census Bureau will be releasing new poverty-rate numbers on Thursday and the numbers are expected to show a big move in the wrong direction. Much of the coverage will be on how much the poverty rate increases, with 15 percent being a likely amount according to some estimate. There also will be lots of discussion about the political implications, as this Associated Press story illustrates.

The number of people in the U.S. who are in poverty is on track for a record increase on President Barack Obama’s watch, with the ranks of working-age poor approaching 1960s levels that led to the national war on poverty. Census figures for 2009 — the recession-ravaged first year of the Democrat’s presidency — are to be released in the coming week, and demographers expect grim findings. It’s unfortunate timing for Obama and his party just seven weeks before important elections when control of Congress is at stake. The anticipated poverty rate increase — from 13.2 percent to about 15 percent — would be another blow to Democrats struggling to persuade voters to keep them in power.

But the real story should be the degree to which the federal government’s War on Poverty has been a complete failure. Taxpayers have poured trillions of dollars into means-tested programs, yet the data show no positive results. Indeed, it’s quite likely that the programs have backfired. As shown in the chart, Census Bureau data reveal that the poverty rate was steadily falling in the 1950s and early 1960s, but then stagnated once the War on Poverty began. It’s possible that there are alternative and/or additional explanations for this shocking development, but government intervention may be encouraging poverty by making indolence more attractive than work.

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The Poverty Pimp Index

Walter Williams periodically has explained that the main beneficiaries of the so-called War on Poverty are all the bureaucrats who have very lucrative jobs in all the various redistribution programs, agencies, and departments. He calls these people “poverty pimps” and asks whether they actually have an incentive to solve problems since that would put their jobs at risk. Those are all interesting issues, but this post looks at the number of bureaucrats, by state, working in the “public welfare” industry (the Census Bureau has an interactive program that allows this type of calculation). Comparing that number of bureaucrats to each state’s population allows the creation of a “Poverty Pimp Index” showing the number of bureaucrats (at the state and local level) per 100,000 of population.

Surprisingly, New Hampshire is the worst state, requiring four times as many bureaucrats per capita to administer income-redistribution programs as Hawaii, which is the surprise winner as the most efficient state. I’m sure these numbers represent a gross over-simplification, and they may depend on how states classify employees, so this is nothing but a quick look at some interesting data. If anybody knows of more substantive research on the comparative efficiency of how states administer programs, please send it my way.

The Poverty Pimp Index (“public welfare” bureaucrats per 100,000 residents)

New Hampshire              360
Alaska                             302
New York                       290
Maine                              280
Wisconsin                      277
Pennsylvania                 277
DC                                 277
Minnesota                     266
New Jersey                   255
Ohio                               255

Kansas                             121
Idaho                               120
Georgia                           118
Texas                               113
South Carolina                104
Nevada                             99
Mississippi                         96
Indiana                            95
Florida                             92
Hawaii                              86

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Obama Administration Trying to Rig Government Statistics for Ideological Purposes

The government’s so-called War on Poverty has been a dismal failure, largely because giving people money as a condition of being poor is a very good way of ensuring that some of them will choose to remain poor. But now the White House wants to make a bad situation even worse by concocting a new definition of poverty completely divorced from reality. As Robert Samuelson explains in his Washington Post column, this rigged system means that the poverty rate would remain the same even if every person in America suddenly had twice as much income:

…the poor’s material well-being has improved. The official poverty measure obscures this by counting only pre-tax cash income and ignoring other sources of support. These include the earned-income tax credit (a rebate to low-income workers), food stamps, health insurance (Medicaid), and housing and energy subsidies. Spending by poor households from all sources may be double their reported income, reports a study by Nicholas Eberstadt of the American Enterprise Institute. Although many poor live hand-to-mouth, they’ve participated in rising living standards. In 2005, 91 percent had microwaves, 79 percent air conditioning and 48 percent cellphones. …the administration’s…new poverty number would compound public confusion. It also raises questions about whether the statistic is tailored to favor a political agenda. The “supplemental measure” ties the poverty threshold to what the poorest third of Americans spend on food, housing, clothes and utilities. The actual threshold — not yet calculated — will almost certainly be higher than today’s poverty line. Moreover, the new definition has strange consequences. Suppose that all Americans doubled their incomes tomorrow, and suppose that their spending on food, clothing, housing and utilities also doubled. That would seem to signify less poverty — but not by the new poverty measure. It wouldn’t decline, because the poverty threshold would go up as spending went up. Many Americans would find this weird: People get richer but “poverty” stays stuck. …The new indicator is a “propaganda device” to promote income redistribution by showing that poverty is stubborn or increasing, says the Heritage Foundation’s Robert Rector. He has a point. The Census Bureau has estimated statistics similar to the administration’s proposal. In 2008, the traditional poverty rate was 13.2 percent; estimates of the new statistic range up to 17 percent. The new poverty statistic exceeds the old, and the gap grows larger over time. To paraphrase the late Sen. Daniel Patrick Moynihan: The administration is defining poverty up. It’s legitimate to debate how much we should aid the poor or try to reduce economic inequality. But the debate should not be skewed by misleading statistics that not one American in 100,000 could possibly understand. Government statistics should strive for political neutrality. This one fails.

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The Obama Administration’s Dangerous Re-Definition of Poverty

A former colleague from my days at the Heritage Foundation, Robert Rector, has a very disturbing article at National Review Online. Robert explains that the Obama Administration is putting together a new – and rigged – definition of poverty that has nothing to do with material deprivation. This new system instead will be a measure of income distribution, thus creating a public policy bias supporting spread-the-wealth type policies:

…the Obama administration announced it will create a new poverty-measurement system that will eventually displace the current poverty measure. This new measure, which has little or nothing to do with actual poverty, will serve as the propaganda tool in Obama’s endless quest to “spread the wealth.” …The current poverty measure counts absolute purchasing power — how much steak and potatoes you can buy. The new measure will count comparative purchasing power — how much steak and potatoes you can buy relative to other people. …In other words, Obama will employ a statistical trick to ensure that “the poor will always be with you,” no matter how much better off they get in absolute terms. …The weird new poverty measure will produce very odd results. For example, if the real income of every single American were to magically triple over night, the new poverty measure would show there had been no drop in “poverty,” because the poverty income threshold would also triple. …Another paradox of the new poverty measure is that countries such as Bangladesh and Albania will have lower poverty rates than the United States, even though the actual living conditions in those countries are extremely bad. …For most Americans, the word “poverty” suggests destitution: an inability to provide a family with nutritious food, clothing, and reasonable shelter. But only a small number of the 40 million per­sons classified as poor under the government’s current poverty definition fit that description. Most of America’s poor live in material conditions that would have been judged comfortable, or even well-off, two generations ago. …Clearly, “poverty” as currently defined by the government has little connection with “poverty” as the average American understands it. The new Obama poverty measure will stretch this semantic gap, artificially swelling the number of “poor” Americans, and severing any link between the government’s concept of poverty and even modest deprivation. In honest English, the new system will measure income inequality, not poverty. Why not just call it an “inequality” index? Answer: because the American voter is unwilling to support massive welfare increases, soaring deficits, and tax increases to equalize incomes. However, if the goal of income leveling is camouflaged as a desperate struggle against poverty, hunger, and dire deprivation, then the political prospects improve. The new measure is a public-relations Trojan horse, smuggling in a “spread the wealth” agenda under the ruse of fighting real material privation… In effect, the Obama poverty measure sets a new national goal of class warfare and income redistribution.

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