Eroding The Foundations Of Prosperity

The most important foundation of prosperity in America is the two-parent family. Unfortunately, the number of two-parent families has decreased in recent years.

This is a chart from the Pew Research Center posted on December 17, 2015:

On April 10, 2014, The Washington Post reported:

It’s clear in America that family structure and poverty are intertwined: Nearly a third of households headed by single women live below the poverty line. And just six percent of families led by married couples are in the official ranks of the poor. Poverty, meanwhile, touches an astounding 45 percent of children who live without a father.

Recent research by Raj Chetty, Nathaniel Hendron, Patrick Kline, Emmanuel Saez and Nicholas Turner also found that intergenerational income mobility was lower in metropolitan areas with a larger share of single mothers, a bold-faced finding that touched off a new round of public debate over what this relationship means.

But there is another troubling fact regarding the future prosperity of America. On November 2, Bloomberg reported:

Nathan Butcher is 25 and, like many men his age, he isn’t working.

Weary of long days earning minimum wage, he quit his job in a pizzeria in June. He wants new employment but won’t take a gig he’ll hate. So for now, the Pittsburgh native and father to young children is living with his mother and training to become an emergency medical technician, hoping to get on the ladder toward a better life.

Ten years after the Great Recession, 25- to 34-year-old men are lagging in the workforce more than any other age and gender demographic. About 500,000 more would be punching the clock today had their employment rate returned to pre-downturn levels. Many, like Butcher, say they’re in training. Others report disability. All are missing out on a hot labor market and crucial years on the job, ones traditionally filled with the promotions and raises that build the foundation for a career.

The article at Bloomberg includes the following chart:

In October 2015, TIME magazine reported:

For the first time since the Census Bureau began collecting data on higher education attainment, women are more likely to have a bachelor’s degree than men.

Last year, 29.9% of men had a bachelor’s degree, while 30.2% of women did, the bureau reports. A decade prior, in 2005, 28.5% of men had bachelor’s degree, while only 26% of women did.

Young women are driving the change. In the 25-34 age group, 37.5% of women have a bachelor’s degree or higher, while only 29.5% of men do. (Rates of college attainment for men and women in this age group are increasing roughly equally.) But for the over-65 crowd, only 20.3% of women have such degrees, compared to 30.6% of men.

Historically men have been the main providers for their families. Young men have been encouraged to get a good job, get married, and have a family. These ideals have been undermined in recent years by the cultural war against traditional families, traditional roles of men and women, and family values. What has been overlooked by the people fighting traditional values is the role traditional values play in the prosperity of America. The report by Bloomberg is a further indication of the overall decline of our society and the future decline in prosperity.

Is This Where Our Culture Is?

Dennis Prager posted an article today in National Review about middle-class values and the attack on those values by the political left.

The article reports:

In August 2017, University of Pennsylvania law professor Amy Wax wrote a column for the Philadelphia Inquirer in defense of middle-class values. She and her co-author cited a list of behavioral norms that, as Wax, put it, “was almost universally endorsed between the end of World War II and the mid-1960s.”

They were:

Get married before you have children and strive to stay married for their sake. Get the education you need for gainful employment, work hard, and avoid idleness. Go the extra mile for your employer or client. Be a patriot, ready to serve the country. Be neighborly, civic-minded, and charitable. Avoid coarse language in public. Be respectful of authority. Eschew substance abuse and crime.

She later wrote in the Wall Street Journal, “The fact that the ‘bourgeois culture’ these norms embodied has broken down since the 1960s largely explains today’s social pathologies — and re-embracing that culture would go a long way toward addressing those pathologies.”

For her left-wing colleagues at Penn Law School, this list was beyond the pale. About half of her fellow professors of law — 33 of them — condemned her in an open letter. And Wax wrote in the Journal, “My law school dean recently asked me to take a leave of absence next year and to cease teaching a mandatory first-year course.”

If you are over the age of 60, chances are these are the values you grew up with. Many young people rebelled against these values in the 1960’s and beyond, but these were the values they grew up with.

The article continues:

The Pennsylvania chapter of the left-wing National Lawyers Guild condemned her for espousing bourgeois values and questioned “whether it is appropriate for her to continue to teach a required first-year course.”

These are now considered bourgeois values by the political left. Let’s look at the consequences of these values.

In March 2013, the Brookings Institute posted a list of three things teenagers living in poverty themselves should do to avoid poverty in their future.

This is the list:

In addition to the thousands of local and national programs that aim to help young people avoid these life-altering problems, we should figure out more ways to convince young people that their decisions will greatly influence whether they avoid poverty and enter the middle class. Let politicians, schoolteachers and administrators, community leaders, ministers and parents drill into children the message that in a free society, they enter adulthood with three major responsibilities: at least finish high school, get a full-time job and wait until age 21 to get married and have children.

I would add avoiding illegal drugs or excessive alcohol to that list. However, note that the ways to avoid poverty are very much in line with the bourgeois values that the political left is denigrating. These bourgeois values are also the building blocks of a strong society. Again, why is the political left denigrating them?

The article concludes:

There surely are mean conservatives — witness some of the vile comments by anonymous conservative commenters on the Internet. And it is a moral scandal that Ford has received death threats. The difference in left-wing meanness is the meanness of known — not anonymous — people on the left. They don’t hide behind anonymity because they do not feel bound by traditional notions of civility, for which they have contempt.

Now you can understand why the Left hates Mike Pence, a man who has, by all accounts, led a thoroughly honorable life. He — and other Evangelical Christians and Orthodox Jews — tries to live by a code that is higher than him.

That ethic is what Übermenschen seek to destroy.

They are succeeding.

I hope not. That is not the country I want to leave to my children and grandchildren.

Misleading Propaganda From The United Nations

Yesterday The Daily Signal posted an article about the latest numbers on worldwide poverty.

The article reports:

Philip Alston, the United Nations’ special rapporteur on extreme poverty and human rights, recently reported that in the United States, “[a]bout 40 million live in poverty, 18.5 million in extreme poverty, and 5.3 million live in third-world conditions of absolute poverty.”

He further argued before the U.N. Human Rights Commission that “one of the world’s wealthiest countries does very little about the fact that 40 million of its citizens live in poverty.”

That would be very serious if it were true. Thankfully it is not.

The article further reports:

Such claims do have a veneer of legitimacy, however, because when compiling the U.S. government’s official poverty statistics, the Census Bureau considers only the cash income each family reports in an annual survey.

These “official” income figures exclude substantial off-the-books earnings among low-income households and omit roughly 95 percent of the $1.1 trillion U.S. taxpayers provide in means-tested cash, food, housing, and medical benefits for low-income persons each year.

Fortunately, the Census Bureau also conducts, on behalf of the Bureau of Labor Statistics, a survey of household expenditures, in which families are asked to report how much money they spend each month on each of up to 594 categories of purchases. Poor families routinely report spending an average of $2.40 for each dollar of official cash income.

…Alston claims that 40 million Americans have incomes below the official U.S. poverty level of roughly $24,000 per year for a family of four. However, the reality is that at most 25.9 million Americans live in poverty, based on reported spending less than the official poverty threshold. And, the official U.S. poverty threshold is far higher than the living standard for most of the world’s population.

The article explains what poverty looks like in America:

The severe shortcomings of income-based poverty measures are made clear when one considers the actual living conditions of those whom Alston considers to be in “extreme poverty.” American families living in “extreme poverty” typically have air conditioning, computers, DVD players, and cellphones. They rarely report material hardships such as hunger, eviction, or having utilities cut off.

The article notes that we need to find a better way of compiling our poverty statistics in America so that they actually reflect the truth. An accurate reporting of poverty statistics would help the government gauge exactly what our spending on poverty needs to be.

Some Charts From The Heritage Foundation About Welfare In America

On April 5, The Heritage Foundation posted an article titled, “Understanding the Hidden $1.1 Trillion Welfare System and How to Reform It.” I strongly suggest that you follow the link and read the entire article, but I would like to post some basic charts from the article:

The article lists three goals of welfare reform:

The goal of welfare should not be to reduce poverty after receipt of welfare through an ever-larger welfare state. A new approach is needed. The goal of welfare policy should be updated to include three other concepts:

  • Increasing efforts toward self-support;
  • Reducing self-defeating and self-limiting behaviors; and
  • Increasing psychological well-being.

It should be noted that adopting these new goals does not mean that the government should stop assisting the poor. For example, as noted previously, a low-wage parent who works full-time for the full year under the existing welfare system has combined economic resources from earnings and welfare assistance that are well above the poverty level. Ensuring that the families of full-time workers are not poor is a laudable goal that should continue to be pursued.58

The objective might be inappropriate for families with large numbers of children. See Rector and Sheffield, “Five Myths About Welfare and Child Poverty.”

 Unfortunately, the current structure of welfare assistance undermines rather than enhances self-support and psychological well-being. That aspect of the welfare system must be transformed.

It is time to combine charity and encouragement. We need to provide incentives for people to get off the welfare rolls. Welfare should not be a generational profession.

 

 

Poverty

Dictionary.com defines poverty as:

1. the state or condition of having little or no money, goods, or means of support; condition of being poor.

Antonyms: riches, wealth, plenty.

2. deficiency of necessary or desirable ingredients, qualities, etc.:

poverty of the soil.

3. scantiness; insufficiency:

Their efforts to stamp out disease were hampered by a poverty of medical supplies.

After President Trump’s remarks (in a supposedly private meeting) have caused such a stir, I thought I would point out a few things about poverty and economic refugees.

For those of you who have chosen to forget, the wealth of America was built on sacrifice and blood. It was built by a small percentage of Americans who rebelled against British rule rather than flee the country they had settled. They were never able to share in the wealth of the nation they helped create–most of the signers of the Declaration of Independence died in poverty. They fought tyranny. Why are the economic refugees we are taking in fleeing tyranny rather than fighting it?

What are the keys to economic prosperity in a country? Hernando de Soto is a Peruvian economist who has done decades of pioneering work for presidents and in the streets on behalf of property rights for the poor.

His biography, posted at the Cato Institute website states:

Having made enough money to retire, he decided to devote his life full-time to solving the riddle of development: Why are some countries rich and others poor? De Soto knew that Peruvians did not lack entrepreneurial energy. The bustling informal economy of Lima was testament to that. Nor did they lack assets, per se. From countryside to urban shantytown, ownership was governed by a system of informally evolved and acknowledged property rights.

But as de Soto explained in his 1986 book The Other Path, these de facto owners were locked out of the formal, legal economy—and that was the root of the problem. “They have houses but not titles; crops but not deeds; businesses but not statutes of incorporation.”

In 1980 de Soto created the Institute for Liberty and Democracy. The more he and his fellow researchers at the ILD investigated, the more they realized that dealing with the Peruvian state to obtain legal recognition of one’s assets was maddeningly difficult, if not impossible.

As an author and an activist, and later as adviser to President Alberto Fujimori in the early years of his administration, de Soto moved to bring his impoverished fellow countrymen out of the shadow economy and unlock their potential to build wealth, a process that continues today.

His biography also talks about some of the challenges of what Mr. de Soto is attempting:

For his efforts, the Peruvian Marxist terror group Shining Path targeted him for assassination. The institute’s offices were bombed. His car was machine-gunned. Today the Shining Path is moribund, but de Soto remains very much alive and a passionate advocate. Delivering formal property rights to the poor can bring them out of the sway of demagogues and into the extended order of the modern global economy. “Are we going to make [capitalism] inclusive and start breaking the monopoly of the left on the poor and showing that the system can be geared to them as well?” That’s de Soto’s challenge and his life’s work. (The italics are mine)

So what is compassion? Is it giving money to the leaders of impoverished countries only to have the leaders spend it on luxuries while the people starve? Is it giving to grass roots organizations that work on a people-to-people level to help the poor? Is it simply allowing the poor to escape their homes? Where will we find the people who will work with Mr. de Soto to change the way some of the world’s poorest countries are run?

Economic migration is not necessarily a good thing–you are taking people away from a place where they might be able to make a difference to a new culture where they are total aliens who may or may not be willing to assimilate. We have had a problem in many of the cities that have taken large numbers of foreign immigrants of people using public streets as toilets. There are pictures all over the internet of people relieving themselves in public and wiping themselves with their hands. That is not acceptable in American culture, but because we have overwhelmed the local populations in some towns and cities, it is becoming a problem. We have an obligation to help those in poverty in a constructive way, but we also have the right to protect our own cultural heritage.

Poverty Is Not The Result Of Lack Of Spending On Education

Yesterday John Hinderaker at Power Line posted an article about a speech President Obama gave at the Catholic-Evangelical Leadership Summit on poverty at Georgetown. Evidently his speechwriters had a very casual relationship with the truth about poverty.

The article reports some of the President’s statements:

“Those who are doing better and better, more skilled, more educated, – luckier – having greater advantages are withdrawing from the commons,” he said. “Kids start going to private schools….

…kids start working out at private clubs instead of the public parks, an anti-government ideology then disinvests from those common goods and those things that draw us together.”

That led fewer people to care about public institutions, Obama explained, leading to government cuts to important public functions – making the nation less equal.

Obama insisted that there needed to be more investments in public schools, public universities, public early child education and public infrastructure, insisting that funding these organizations both “grows our economy and spreads it around.”

Yes, there have been government cuts–but not to education.

The article includes a few charts:

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Note that enrollment is basically flat, but expenses are increasing. Also note that enrollment numbers are given in millions, expenditure numbers are given in billions.

The article concludes:

So where is the “disinvestment?” Where is the “anti-government ideology?” Obama’s comments represent rank ignorance; either that or cynical demagoguery. In truth, the cure for poverty is well known: graduate from high school, get a job–any job–and get married. But the real solution doesn’t fit the left’s agenda.

Government dependency leads to poverty–it doesn’t lead to either wealth of success. The best thing a parent can do for their child is let their child see them get up and go to work every morning. That sets a great example.

 

How Does This Help Anyone?

On Friday the Huffington Post reported that starting next summer, Berkeley, California, residents with incomes below $32,000 per year will be able to fill their prescriptions for medical marijuana at no cost.

I am not opposed to medical marijuana. I am opposed to the fact that it is over-prescribed in places where it is legal. If you pick up a Sunday paper in California, you will find multiple pages of advertisements for doctors who prescribe medical marijuana for headaches, flat feet, stress, etc. Historically, when medical marijuana is legalized in a state, the results are not significantly different from simple legalization of marijuana.

The article reports:

Under a law passed unanimously by the city council, dispensaries must set aside 2 percent of their pot for distribution to the poor.

Not everyone is on board with the plan.

“It’s ludicrous, over-the-top madness,” Bishop Ron Allen, head of the International Faith Based Coalition, told Fox News. “Why would Berkeley City Council want to keep their poverty-stricken under-served high, in poverty and lethargic?”

A website called drugfreeworld lists the effects of marijuana:

SHORT-TERM EFFECTS

  • Sensory distortion
  • Panic
  • Anxiety
  • Poor coordination of movement
  • Lowered reaction time
  • After an initial “up,” the user feels sleepy or depressed
  • Increased heartbeat (and risk of heart attack)

LONG-term effects of marijuana

  • Reduced resistance to common illnesses (colds, bronchitis, etc.)
  • Suppression of the immune system
  • Growth disorders
  • Increase of abnormally structured cells in the body
  • Reduction of male sex hormones
  • Rapid destruction of lung fibers and lesions (injuries) to the brain could be permanent
  • Reduced sexual capacity
  • Study difficulties: reduced ability to learn and retain information
  • Apathy, drowsiness, lack of motivation
  • Personality and mood changes
  • Inability to understand things clearly

I have never used marijuana, so I cannot personally verify this information; however, as a parent, I have known teenagers who have used the drug. My personal experience with one particular teenager was that heavy marijuana use in high school totally ruined his ambition and his hope for achieving the things he was capable of achieving. I believe that marijuana has a negative impact on ambition and drive for success. Someone needs to explain to me how giving people living in poverty free access to marijuana is actually going to help anyone.

An Explanation I Can Understand

IJReview has posted this in the past, but I thought it was worth sharing again.

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this…

The first four men (the poorest) would pay nothing The fifth would pay $1 The sixth would pay $3 The seventh would pay $7 The eighth would pay $12 The ninth would pay $18 The tenth man (the richest) would pay $59

So, that’s what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball. “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20″. Drinks for the ten men would now cost just $80.

The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men ? How could they divide the $20 windfall so that everyone would get his fair share?

They realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer.

So, the bar owner suggested that it would be fair to reduce each man’s bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.

And so the fifth man, like the first four, now paid nothing (100% saving). The sixth now paid $2 instead of $3 (33% saving). The seventh now paid $5 instead of $7 (28% saving). The eighth now paid $9 instead of $12 (25% saving). The ninth now paid $14 instead of $18 (22% saving). The tenth now paid $49 instead of $59 (16% saving).

Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.

“I only got a dollar out of the $20 saving,” declared the sixth man. He pointed to the tenth man,”but he got $10!”

“Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar too. It’s unfair that he got ten times more benefit than me!” “That’s true!” shouted the seventh man. “Why should he get $10 back, when I got only $2? The wealthy get all the breaks!”

“Wait a minute,” yelled the first four men in unison, “we didn’t get anything at all. This new tax system exploits the poor!”

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn’t show up for drinks so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and government ministers, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D.  –   Professor of Economics.

The same general principle is explained in the Laffer Curve.

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Income Inequality

Lately we have been hearing a lot about ‘income inequality.’ It’s even a Biblical concept–Jesus said, “The poor you will always have with you, and you can help them any time you want.” So income inequality was with us in Biblical times and is still with us. It seems to be a constant thing. Other than help the poor among us, do we have the ability to change it. Well, we have a government that right now is trying.

Yesterday CNS News reported that according to a new study by the Congressional Budget Office, the top 40 percent of households by before-tax income actually paid 106.2 percent of the nation’s net income taxes in 2010. So what did the bottom 60 percent pay? That sounds like too few people pulling the wagon with too many people in it.

The article explains:

The households in the top 20 percent by income paid 92.9 percent of net income tax revenues taken in by the federal government in 2010, said CBO. The households in the fourth quintile paid another 13.3 percent of net income tax revenues. Together, the top 40 percent of households paid 106.2 percent of the federal government’s net income tax revenue.

The third quintile paid another 2.9 percent—bringing the total share of net federal income tax revenues paid by the top 60 percent to 109.1 percent.

That was evened out by the net negative income tax paid by the bottom 40 percent.

There is one aspect of the tax code that needs to be considered when viewing these statistics. When Congress has the highest percentage of millionaires per capita in America, why would they produce a tax code that is so unfavorable to the rich? Well, it’s not totally unfavorable to the rich–it is unfavorable to rich people who currently are earning their wealth. Family wealth carefully invested in tax shelters is not taxable. Previously acquired assets are not taxed unless they are sold.

The American tax code is already 13 miles long. We need to scrap it, and make it very simple–how much did you make, how much did you give to charity, how much mortgage interest did you pay? Subtract that from your gross income and pay a small percentage of what is left. The charitable deduction encourages people to support charitable works and the mortgage deduction encourages people to buy houses and form communities. End of story.

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We Fought The War On Poverty And We Lost

The war on poverty began in the 1960’s. In 1959, the poverty rate was 22.4%. In 1969, shortly after the war on poverty began, the poverty rate was 12.1%. Today the poverty rate is 16.1%. It looks to me as though we are losing ground–not gaining it.

These figures are from an article in Forbes Magazine posted yesterday. The article points out:

Federal and state governments spend a trillion dollars a year just on these means tested welfare programs, which does not include Social and Medicare. That is more than we spend on national defense. It adds up to roughly $17,000 per person in poverty, over $50,000 for a poor family of three. The Census Bureau estimates that our current welfare spending totals four times what would be necessary just to give all of the poor the cash to bring them up to the poverty line, eliminating all poverty in America. A recent book by Charles Murray, In These Hands, further documents that.

The article also points out that from 1965 to 2008 the total amount of money spent on means tested welfare is nearly $16 trillion–in 2008 dollars. That is double the amount America has spent on military conflicts from the Revolution until today.

The article reports:

One major reason that poverty stopped declining after the War on Poverty started is that the poor and lower income population stopped working. In 1960, nearly two-thirds of households in the lowest income one-fifth of the population were headed by persons who worked. But by 1991, this work effort had declined by about 50%, with only one-third of household heads in the bottom 20% in income working, and only 11% working full-time, year round.

The war on poverty has also destroyed low-income families and increased the number of out-of-wedlock births. It has increased the number of one parent homes and children with two unmarried parents.

Please follow the link above and read to entire article. The article explains the negative impact the war on poverty has had on our society. It also explains how to solve some of the problems associated with the way the current welfare state is funded. We need to change the way we help those among us who are less fortunate. What we are currently doing is not working.

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Collecting Welfare Benefits In Massachusetts

I know that there are a lot of people collecting welfare benefits and that makes it hard to keep track of every penny, but Massachusetts has taken inefficiency to a new level. WCVB reported yesterday that an audit of the Massachusetts Department of Transitional Assistance identified 1,164 cases where recipients continued to receive a total of $2.39 million in benefits from six to 27 months after they were reported to be deceased.

Boston.com also commented on the audit:

The report, which covered food stamps, cash, and other benefits to low-income families, estimated that recipients using a dead person’s Social Security number alone received at least $2.4 million in between July 2010 and April 2012. It also flagged another $15 million in suspicious transactions from electronic benefit cards during the two-and-a-half-year period the auditor reviewed.

Boston.com also reported:

The state auditor also found another $15 million in suspicious transitions on electronic benefit cards – including nearly $5 million where all the food benefits were withdrawn at once; $4.6 million in transactions from distant states or territories (including Hawaii, Florida, and Puerto Rico); $3.6 million where recipients made multiple purchases or withdrawals within an hour; $1.5 million where recipients regularly rang up transactions in even dollar amounts (such as $100) and $840,000 where a card number was manually entered into a retail terminal instead of being swiped (suggesting a card user may have stolen the card number, but didn’t have the actual card).

This is taxpayers’ money. If those responsible for spending it cannot do a better job of being responsible, we should stop giving them the money.

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Hollywood Gets Rewarded For Its Support Of President Obama

Money talks. I hate to be cynical, but money talks. Breitbart.com reported yesterday that the production tax incentives favorable to the domestic entertainment industry enacted by Congress in 2004, extended in 2008 and scheduled to expire in 2011, have been extended through 2013. The bill passed to avoid the fiscal cliff increases taxes on 77 percent of Americans, but Hollywood gets a tax break.

The article reports:

The original tax incentive applied to productions costing less than $15 million to make ($20 million in low-income areas). The 2008 extension applies to all films, up to a deduction of $15 million (or $20 million in low-income areas). The incentive is especially generous to television series; it applies to each TV episode.

Hollywood players routinely beg the government to raise their taxes so they can pay their “fair share.” 

Yet the industry moves new productions to places where existing tax breaks help its bottom line. That means plenty of shows and films are shot in states like New Mexico, which feature highly favorable tax rates, as well as destinations north of the border with similar perks.

It really is time to find some honest legislators to redo the tax code. I believe that there are a few men of principle in our government; unfortunately there are too few of them to accomplish what needs to be done.

One Place We Need To Consider Cutting The Budget

I realize that I am about to sound like Scrooge at Christmas, but I really feel this situation is getting out of hand.

From The Weekly Standard:

The article is not clear on how much of that money goes to the recipient and how much supports the bureaucracy; but either way, I think we need to do some re-evaluating of the success of our poverty programs.

There is no incentive for someone in government to help someone on welfare get off of welfare–if there is no one on welfare, the government worker has no program to administer. There is no incentive for the person on welfare to get off of welfare because not working takes less effort than working. Also, in many cases, welfare pays more than working. Thus our welfare programs have become the government equivalent of a perpetual motion machine.

The article at The Weekly Standard states:

For fiscal year 2011, CRS identified roughly 80 overlapping federal means-tested welfare programs that together represented the single largest budget item in 2011—more than the nation spends on Social Security, Medicare, or national defense.

…The diffuse and overlapping nature of federal welfare spending has led to some confusion regarding the scope and nature of benefits. For instance, Newark Mayor Cory Booker has recently received a great deal of attention for adopting the “food stamp diet” in which he spends only $4 a day on food (the median individual benefit) to apparently illustrate the insufficiency of food stamp spending ($80 billion a year) or the impossibility of reductions. The situation Booker presents, however, is not accurate: a low-income individual on food stamps may qualify for $25,000 in various forms of welfare support from the federal government on top of his or her existing income and resources—including access to 15 different food assistance programs. Further, even if one unrealistically assumes that no other welfare benefits are available, the size of the food stamp benefit increases as one’s income decreases, as the benefit is designed as a supplement to existing resources; it is explicitly not intended to be the sole source of funds for purchasing food.

It’s time for a Mulligan on welfare programs. We fought the war on poverty and we lost.

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Where Is The Accountability To Taxpayers ?

Breitbart.com is reporting today on where some of the stimulus money went.

The article reports:

A portion of an $11 million grant to help 400 low-income Detroit citizens purchase “business attire” for job interviews helped exactly two people, a city audit reveals.

The audit revealed that the clothing program was supposed to help 400 people. Instead, two people were helped. The people asking for the clothing were required to have a job interview scheduled. Part of the audit included an investigation into the purchase of $182,000 worth of high-end furniture for a department office. In 2009, the department received more than $11 million in stimulus funding and created a service center. 

The article reports:

The center, at 1970 Larned, included the Customer Choice Pantry, the New Beginnings Clothing Boutique and a call center that had the capacity to service 60,000 families in need. The boutique was to provide business attire for low-income residents for job interviews. 

This is sad. The money could have been used to help people out of poverty. Instead it is used to build government infrastructure. Until we have a poverty program that has incentives for government bureaucrats to get people out of poverty instead of building their own facilities and job security, we will never end the poverty cycle.

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We Have Lost The War On Poverty–What Do We Do Now ?

Big Government posted an article yesterday about the growing dependence of Americans on government and its impact–current and future–on our society.

The article cites a Heritage Foundation study:

“Today…67.3 million Americans, from college students to retirees to welfare beneficiaries—depend on the federal government for housing, food, income, student aid, or other assistance once considered to be the responsibility of individuals, families, neighborhoods, churches, and other civil society institutions…Unsustainable increases in dependent populations predate the recent recession—and continuing economic morass—and have continued to rise since the economy collapsed in 2008 and 2009.”

As the government has taken over the responsibilities of families, churches, and other charitable institutions, these institutions have become weaker.

The article points out:

The Administration is allowing people to become fully dependent on them for their basic needs like food and access to health services, even encouraging it. The more they rely on the Government, the more Government has control of their lives and the less people feel they are capable of escaping their situation.  Without responsibility and choices, they give up.

An excellent example of this was presented in a study in 1976 by Langer and Rodin.  It showed the effects of nursing home patients who were given responsibility and choices as opposed to those “where conformity and passivity is encouraged and every whim is attended to.”  The latter dramatically declined in overall “health and well-being”.  The study was extended to homeless shelters.  When people were given both responsibility and choices they were much more likely to find work and a place to live.

People do better when they have responsibilities and purpose. We need to bring back the concept that there is value in all work. Somehow we have lost that and have focused instead on over-educating our young people at high expense and leaving them with massive debt and unrealistic expectations. It’s time to reinvent America’s values and bring back people helping people (instead of government helping people) and the value of work and responsibility.

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We Lost The War On Poverty, What Do We Do For An Encore ?

Plasma display

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Today’s Wall Street Journal reports that household incomes have fallen to 1996 levels. On September 13th, The Foundry at Heritage.org reported on some of the details on poverty in America.

The article at The Foundry reports:

  • 80 percent of poor households have air conditioning
  • Nearly three-fourths have a car or truck, and 31 percent have two or more cars or trucks
  • Nearly two-thirds have cable or satellite television
  • Two-thirds have at least one DVD player and 70 percent have a VCR
  • Half have a personal computer, and one in seven have two or more computers
  • More than half of poor families with children have a video game system, such as an Xbox or PlayStation
  • 43 percent have Internet access
  • One-third have a wide-screen plasma or LCD television
  • One-fourth have a digital video recorder system, such as a TiVo

I realize that many of the people considered below the poverty level struggle with day to day expenses and paying the bills, but there is something wrong with this picture. Are we giving people the idea that they can live above the standard that their salaries allow and have the government subsidize the extras? I realize that sounds calloused, but if I struggle to pay my bills because of the amount of money taken out of my paycheck and given to another family, why does that family buy a plasma TV before I can afford one? I earned mine, who paid for theirs?

The article at The Foundry concludes:

Poverty is a serious problem that requires serious solutions. But policymakers and the public need accurate information about what poverty in the United States really means. Only then can they implement the right policies to help those Americans who are truly in need.

Meanwhile, the editorial page of the Wall Street Journal stated today (I am not linking to the article as it is subscribers only):

…politicians who support policies that make economic growth their top priority raise everybody’s incomes even if some incomes rise more rapidly than others. Politicians who put income redistribution above overall economic growth do worse by everybody, especially the poor.

The bottom line here is that class warfare may win votes in certain segments of the population, but in the long run it helps no one escape poverty or gain wealth. The smart thing to do to help the poor is to grow the economy for everyone and stop worrying which group of people has more and needs to be punished by higher taxes. Greed and envy are not productive and do not have a positive impact on the economy or the people practicing them.

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A Rising Star In The Republican Party

Marco Rubio, Florida Republican & former speak...

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Senator Marco Rubio was elected in 2010 to represent Florida in the Senate. He was born in Miami to parents who had fled the dictatorship of Fidel Castro after the Cuban revolution. Senator Rubio’s recent speech at the Reagan Library is an amazing mix of wisdom and common sense.

Power Line posted the following excerpt:

[W]e must begin by embracing certain principles that are absolutely true. Number one – the free enterprise system does not create poverty. The free enterprise system does not leave people behind. People are poor and people are left behind because they do not have access to the free enterprise system because something in their lives or in their community has denied them access to the free enterprise system. All over the world this truism is expressing itself every single day. Every nation on the Earth that embraces market economics and the free enterprise system is pulling millions of its people out of poverty. The free enterprise system creates prosperity, not denies it.

The second truism that we must understand is that poverty does not create our social problems, our social problems create our poverty. Let me give you an example. All across this country, at this very moment, there are children who are born into and are living with five strikes against them, already, through no fault of their own. They’re born into substandard housing in dangerous neighborhoods, to broken families, being raised by their grandmothers because they never knew their father and their mom is either working two jobs to make ends meet or just not home. These kids are going to struggle to succeed unless something dramatic happens in their life.

These truisms are important because they lead the public policies that define the proper role of government. On the prosperity side, the number one objective of our economic policy, in fact the singular objective of our economic policy from a government perspective is simple – it’s growth. It’s not distribution of wealth, it’s not picking winners and losers. The goal of our public policy should be growth. Growth in our economy, the creation of jobs, and of opportunity, of equality of opportunity through our governmental policies.

Now often when I give these speeches, members of the media and others get frustrated because there is nothing new or novel in it. We don’t have to reinvent this. It’s worked before and it will work again and they are simple things. Like a tax code that’s fair, predictable, easy to comply with. Like a regulatory framework that doesn’t exist to justify the existence of the regulators, that doesn’t exist to accomplish through regulation and rulemaking what they couldn’t accomplish through the Congress.

And it is the proper role of government to invest in infrastructure. Yes, government should build roads and bridges, but it should do so as part of economic development as part of infrastructure. Not as a jobs program.

And government should invest in our people at the state level. Education is important, critically important. We must educate and train our children to compete and succeed in the 21st century. Our kids are not going to grow up to compete with children in Alabama or Mississippi. They’re going to grow up to compete with kids in India, and China, all over the world; children who are learning to compete and succeed in the 21st century themselves.

These are proper roles of government within the framework of creating an environment where economic security and prosperity is possible.

The concepts in the speech need to be shouted during the current debate about our budget deficits. The first is the idea that free enterprise does not create poverty–it provides a vehicle for people to escape poverty, and the second is that poverty does not create our social problems–it is the result of those problems.

Daniel Patrick Moynihan understood what the war on poverty would do to America when Lyndon Johnson began the program:

The steady expansion of welfare programs can be taken as a measure of the steady disintegration of the Negro family structure over the past generation in the United States.
Daniel Patrick Moynihan

It’s time to examine how we spend money to fight poverty in America. Free money is not a solution to poverty. Free money destroys self-esteem and ambition–both of which are needed to overcome poverty.


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