“Reading the Score” on Obama’s Poverty Reduction Efforts

“If government planning and welfare had the answer – and they’ve had almost 30 years of it – shouldn’t we expect government to read the score to us once in a while? Shouldn’t they be telling us about the decline in each in the number of people needing help? The reduction in the need for public housing?

But the reverse is true. Each year the need grows greater; the program grows greater. . . But now we’re told that 9.3 million families in this country are poverty-stricken on the basis of earning less than 3,000 dollars a year. Welfare spending [is] 10 times greater than in the dark depths of the Depression. We’re spending 45 billion dollars on welfare. Now do a little arithmetic, and you’ll find that if we divided the 45 billion dollars up equally among those 9 million poor families, we’d be able to give each family 4,600 dollars a year. And this added to their present income should eliminate poverty. Direct aid to the poor, however, is only running only about 600 dollars per family. It would seem that someplace there must be some overhead.” – Ronald Reagan in 1964

It has now been 50 years since Reagan spoke those words and the government still refuses to “read the score” on the results of all their efforts to reduce poverty. One quick glance at the statistics and it is easy to see why.

More than 46 million Americans live in poverty – a record number. Nearly 4 in 5 adults will experience economic insecurity—defined as struggling with joblessness, living near-poverty, or being forced to rely on the welfare state for at least parts of their lives—by the time they are 60. In 1980, 21 percent of Americans in the lowest income quintile rose to the middle quintile within a decade. But in 1995 those in the bottom quintile only had a 15 percent chance of rising to the middle class by 2005. In less than 10 years, the U.S. had witnessed a one-third decline in mobility.

The Obama “recovery” hasn’t helped. It has exacerbated wage gaps, perpetuated economic inequality and been a disaster for those groups he promised to help: minorities, young adults and lower-income workers. Stephen Moore reports for the Wall Street Journal:

According to the Sentier research, households headed by single women, with and without children present, saw their incomes fall by roughly 7%. Those under age 25 experienced an income decline of 9.6%. Black heads of households saw their income tumble by 10.9%, while Hispanic heads-of-households’ income fell 4.5%, slightly more than the national average. The incomes of workers with a high-school diploma or less fell by about 8% (-6.9% for those with less than a high-school diploma and -9.3% for those with only a high-school diploma).

To put that into dollar terms, in the four years between the time the Obama recovery began in June 2009 and June of this year, median black household income fell by just over $4,000, Hispanic households lost $2,000 and female-headed households lost $2,300.

The unemployment numbers show pretty much the same pattern. July’s Bureau of Labor Statistics data (the most recent available) show a national unemployment rate of 7.4%. The highest jobless rates by far are for key components of the Obama voter bloc: blacks (12.6%), Hispanics (9.4%), those with less than a high-school diploma (11%) and teens (23.7%).

Moreover, real incomes have been declining steadily under Obama’s leadership, the poverty rate has increased every year he has been in the White House, job growth has remained stagnant, and the wealth gap between white families and non-white families has soared from 400 percent to 600 percent in just the past three years.

It has become abundantly clear that we are losing the War on Poverty that President Lyndon B. Johnson began in 1964, the same year of Reagan’s remarks. The myriad government programs, from Social Security, to Medicaid, to welfare, to food stamps, and now to Obamacare, have been an ineffective strategy at combating poverty. For years, we’ve been throwing good money after bad in an ineffectual and inefficient effort to nudge people toward the American Dream.

To put it in the same language that Reagan did: As of 2011 the Congressional Research Service estimates that federal spending on 80-plus poverty programs equals $746 billion per year. If state contributions are included the cost of those programs grows to over $1 trillion. If that money was converted into a cash benefit and divided among the 16.8 million households that were below the federal poverty line, the government would be able to cut each of them a check for $60,000.

Of course, that’s not the solution. But it would be sadly more effective than the failed policies of the current administration.