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Why Poverty Persists
Posted By Henry Oliner On January 2, 2013 @ 3:50 pm In Culture,Economics | No Comments
Ralph Reiland writes A Key Economic Lesson  in American Spectator, 1/2/13
In 2012, “the federal government will spend more than $668 billion on at least 126 different programs to fight poverty,” in addition to “welfare spending by state and local governments which adds $284 billion to that figure,” writes Tanner.
On a per capita basis, this roughly $1 trillion a year in welfare spending “amounts to $20,610 for every poor person in America, or $61,830 per poor family of three,” explains Tanner.
In contrast, the Census Bureau reports that the median household income in the United States dropped to $50,054 in 2011, the latest figure available, down 8 percent from 2007, the year before the recession began.
“Welfare spending increased significantly under President George W. Bush and has exploded under President Barack Obama,” states Tanner. “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.”
Bottom line, “the poverty rate is perilously close to where we began more than 40 years ago,” after $15 trillion in spending, Tanner reports. “Clearly, we are doing something wrong.”
Poverty persists because we pay people to be poor. This is both simple and profound. Once people get paid to not work the benefits they lose by working amounts to an enormous marginal tax rate. This is a far greater outrage than the measly few percentage tax points Congress and their media lapdogs have been choking on.
Poverty persists because we have created a poverty industry where six figure staffers increase their value by creating more dependents. Instead of correcting failures we create institutions to perpetualize them.
Poverty persists because we have created a behavior modification program where everyone is a victim and every benefit is deserved. Victim hood has replaced responsibility and ‘deserved’ has replaced ‘earned’.
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 A Key Economic Lesson: http://spectator.org/archives/2013/01/02/a-key-economic-lesson
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