The War on Poverty Creates Dependency

     The War on Poverty was first funded in 1966. During the twenty years prior, the poverty rate of households in the lowest one-fifth of earned income improved markedly, falling from 32 percent to 15 percent. But in the half-century since 1966, despite the War on Poverty, the poverty rate, still based on the earned income of the lowest fifth, has not budged. 
 

The total income of that sector, however, has soared. Counting food stamps, Medicaid, children’s health insurance, the refunded portion of earned-income tax credits, and over 85 other means-tested federal and state benefits, the poverty rate of the lowest income level would be 3 percent, not 15 percent. The rate would fall even further if transfers within families, non-governmental charity, and unreported income were counted.  

  

Government transfer payments have essentially eliminated American poverty. For the lowest fifth of U.S. households, over 84 percent of their disposable income comes from government transfer payments.  

But the purpose of the War on Poverty was not just to raise living standards, it was also to make the poor self-sufficient. On this account, the effort has failed. In 2015, the lowest fifth of earned income, compared with the middle fifth, had 37 percent more families whose head was of prime working age but no one was working. 

The War on Poverty should be repealed. All charity should be left to non-governmental agencies and private citizens. They would not only provide needed funds, they would also induce people to work.