It's Time To Declare Victory...

Introduction

The War on Poverty started by President Johnson in 1964 has surpassed the War of the Roses (32 years) in duration, and if we continue with this unrealistic effort to eliminate poverty we will soon approach the 100 Years War (116 years) Victory in war is usually measured by how many of the enemy are killed or wounded, how many of your troops are killed or wounded, how much territory is won, and who will determine the peace. In the War on Poverty, we are not shooting anyone – at least intentionally - nor are we trying to take territory from a sworn enemy in the everyday sense. So the combatants are “Poverty”, and “the Poor”. If there are more Poor at the end of the day Poverty wins, and visa versa..

After 40 years of fighting Poverty some, more often than not those on the on the Left, have determined that there are more poor today than ever, and we need to spend even more money to continue this fight. It seems that if we are still losing after 40 years the effort is doomed. We need to admit this, and move on knowing that we can never eliminate poverty. Another thought is that at least some of the poor were formerly Middle Class citizens who have joined the ranks of the Poor as a result of paying, through excessive taxation, for the War on Poverty.

A contrary opinion is that we actually have far fewer Poor now than we ever had. This opinion stems from not only the available data but also from common sense, i.e. it is impossible to have any poor left in America when dollars and in-kind services totaling approximately $10 trillion has been spent on these programs. Consequently, it is time to declare victory.

It certainly seems as if advocates of eliminating poverty in our time, have never heard of a Gaussian distribution. Using Poverty and Wealth as the paradigm, we would find a Gaussian distribution In any large population, i.e. there are a relatively small number of poor on the left part of the curve, a relatively small number of very wealthy people on the right, and the rest of us distributed somewhere along the scale. Attempt to change this do not work unless we come up with a way to eliminate people, not poverty or wealth. The last person to try this is sitting in a jail awaiting trial in Iraq.

For another view, It is instructive to listen in on an interview between Chris .Wallace of FOX news and the Rev. Joseph Lowery. This is a truly amazing discussion because it demonstrates that the more things change the more they truly do stay the same.

WALLACE: “Let's talk, if we can, about the substance of what you had to say in your remarks. President Johnson declared war on poverty back in the '60s. Since then, there have been a number of Democratic presidents, mostly Democratic Congresses. They don't seem to have gotten much done for blacks.

LOWERY: Well, that's part of our history, and I regret that…. Listen, make sure you understand, Chris, that I'm neither Democrat nor Republican. I'm Methodist. I have grievances with both parties. One takes us for granted. The other one just takes us.

So I don't absolve the Democrats of their lack of commitment to deal with poverty either. But right now we're witnessing the widening of the gap. There's something wrong when a handful of people have more than they'll ever need while millions of people have less than they always need. The gap is widening. There's something wrong.

WALLACE: Reverend, let me ask you to take a look closer to home, to look inside the civil rights movement. Let's take a look at the state of black America today. Here it is, sir.

Sixty-eight percent of black children are born out of wedlock. One in 10 black males between the ages of 20 and 39 are in prison. Black unemployment is almost 11 percent. That's double the national rate, and that's unchanged from 10 years ago.

Sir, who are the leaders in the black community today, and what are their solutions?

LOWERY: Well, there are many leaders in the black community today. There are more leaders in the black community today than any other time, because there was a time when we depended solely on leaders in the civil rights community. Now we have leaders in Congress, 300 and some black mayors. We have blacks leading business communities.

WALLACE: But, sir, I don't hear a solution coming as to how to deal with these problems that have been around for generations.

LOWERY: Well, there have been many proposals, like full employment, eliminate tax cuts for the rich that cut programs for the poor. Let's have more programs. Let's have more initiative on the part of black people themselves.

But what I'm concerned about is public policy. We need a public policy that addresses the needs of the poor, that works toward full employment, that develops more opportunities for training, for job development, job training, for health care. We've got 48 million to 50 million people in this country with no health insurance. That's a weapon of mass destruction.

Now let's examine the reality behind the rhetoric. Rev. Lowery admits that there are more Black leaders today than ever. This sounds like this is a good thing to me. Not to him apparently. Admittedly not all of these successful Black politicians and entrepreneurs owe their success to the success of the War on Poverty. How could that be since Rev Lowery considers that war ongoing, and to this point not terribly successful. If he did think it successful he would not demand that the USA keep pumping more money into a flawed program. He also demands “full employment”. Current unemployment levels in the Country are about 4.6-4.8%. This is considered full employment by most employment professionals.

As usual, Tax cuts for the rich are assailed. Tax cuts to the poor are a difficult thing to accomplish, as the poor do not make enough money to pay taxes. What Lowery is suggesting is essentially a grant program whereby the wealthy, Black, White and Brown, make gifts to the poor. The gifting mechanism is to pay more taxes to the government so that the government can then give it to the poor. I might consider this equitable if the wealthy – see below - were not paying quite a bit already. The latest data available from the Internal Revenue Service (IRS) for 2003 (released October 2005) may help with this a bit. Frankly Rev Lowery and his ilk should know this already.

The share of total income taxes paid by the top 1% of wage earners rose to 34.27% from 33.71% in 2002. Their income share (not just wages) rose from 16.12% to 16.77%. However, their average tax rate actually dropped from 27.25% down to 24.31% Less than 3-1/2 dollars out of every $100 paid in income taxes in the United States is paid by someone in the bottom 50% of wage earners. The top 50% were those individuals or couples filing jointly who earned $29,019 and up in 2003. (The top 1% earned $295,495-plus.) The wage earners in each category and the percentages they pay are:

· The top 1% pays over a third, 34.27% of all income taxes. (Up from 2003: 33.71%)

· The top 5% pays 54.36% of all income taxes (Up from 2002: 53.80%).

· The top 10% pays 65.84% (Up from 2002: 65.73%).

· The top 25% pays 83.88% (Down from 2002: 83.90%)

· The top 50% pays 96.54% (Up from 2002: 96.50%).

· The bottom 50% pays 3.46% of all income taxes (Down from 2002: 3.50%)

The top 1% is paying nearly ten times the federal income taxes than the bottom 50%. An important question is, who earns the money that pays these taxes?

· The top 1% earns 16.77% of all income (2002: 16.12%).

· The top 5% earns 31.18% of all the income (2002: 30.55%)

· The top 10% earns 42.36% of all the income (2002: 41.77%);

· The top 25% earns 64.86% of all the income (2002: 64.37%),

· The top 50% earns 86.01% (2002: 85.77%) of all the income.

How much more do you want Rev. Lowery? Perhaps we need only to address paychecks to you so that you can take what you need, and send the remainder back to us?

The War On Poverty

What is the “War on Poverty” and how did it start. President Lyndon Johnson (LBJ) started it and has had help from many during the last 40 years. In the March 3, 1964 address to the Congress of the United States LBJ stated:

“Because it is right, because it is wise, and because, for the first time in our history, it is possible to conquer poverty, I submit, for the consideration of the Congress and the country, the Economic Opportunity Act of 1964.

The Act does not merely expand old programs or improve what is already being done. …”

Johnson wanted to chart a new course that would strike at the causes of poverty that would eventually lead to a better life for Americans..

This Act provided basic opportunities that included giving almost half a million underprivileged young Americans the opportunity to develop skills, continue education, and find useful work. Additionally, the call was to give American communities the opportunity to develop, and carry out, comprehensive plans to fight poverty. Large in the Act was providing dedicated Americans the opportunity to enlist as volunteers in the war against poverty.

Additionally, sections of the Act spoke to poor workers and farmers and their need for programs to help them escape from poverty. Perhaps the most permanent part of the act was the President’s recommendation that a new government agency, The Office of Economic Opportunity, be formed to deliver the benefits of the Economic Opportunity Act

Johnson proposed the creation of a Job Corps, a Work-Training Program, and a Work Study Program. A new national Job Corps would enlistf 100,000 young men to be drawn from those whose background, health and education make them least fit for useful work. In a very general sense, LBJ outlined how these programs would work. A Community Action Program was also part of the act as was a Volunteer Program. Loans and guarantees were to provide incentives to employ the unemployed, and family farms were to be provided assistance to purchase land, organize cooperatives and create new farm ventures.

All of this was to be a coordinated program rather than a series of programs lacking leadership.

Given the bumbling to date in fighting this war, I imagine that LBJ would be terribly unhappy with the efforts to date. Johnson inherited quite a few problems upon his ascension to the Presidency after the death of President Kennedy. Not the least of these was the War in Viet Nam, and its flawed policy of incremental escalation. Johnson started the War on Poverty, and now had a two front war, both of which turned out to have the same strategy – incremental escalation. Few commanders win two front wars, especially when one is to be fought at home, and the other thousands of miles from home. Was the second war a way to take the heat off of him for botched Viet Nam policies? Something to ponder as LBJ was not necessarily considered a paragon of virtue, or one who was considered a charitable fellow. He was, however, a very good politician.

Peter Du Pont and Jeffery Eisenach in a National Review Article (1994) entitled “Poor Substitute: ending welfare as we know it” comment on LBJ's second war as follows:

“Since 1964 the Federal Government has spent $3.5 trillion on eradicating poverty….., the primary result of which has been to create a permanent underclass that did not exist before...We should have learned one thing from this experiment: the Federal Government cannot fight poverty effectively, and it has no business trying. Federal taxes take our money, and federal bureaucracies waste it

........the war on poverty has never been, and even today is not, primarily a federal war. It is an American war, and Americans win victories in that war every day. Alcoholics Anonymous and Salvation Army kitchens, for example, bring real help to needy people. Only on the fronts dominated by the Federal Government are we losing. And the more resources we pour into the federal fronts, the more we lose.

The First key to winning the American war on poverty is to stop the federal war......We then must end federally funded education and training programs; end federal funding for AFDC, Food Stamps, housing, and the Women, Infants, and Children program; and end federally funded Medicaid and other health programs aimed at the poor.....

Second, government public-assistance programs aren't the only efforts made to help one another. In 1991 private charities provided, in cash or in kind, over $176 billion for health, education, and welfare. More than $100 billion of that amount was in cash, provided by the 72 per cent of American households that contributed to charity; the remainder was in the form of volunteered time. In 1991 alone, Americans volunteered over 15 billion hours of their time to charitable activities, the equivalent of nine million full-time employees........

Third, the Federal Government spends money very inefficiently. Research finds that less than half of the average federal welfare dollar actually goes to a needy individual, with the remainder squandered on layer after layer of bureaucracy. “

As is too often the case, the War on Poverty gave birth to a slew of new government agencies and programs. Washington likes nothing better than to create new departments, fund them, and then take credit for the great work they (will) do. Johnson's funding guidelines did just that.

Since then, the Federal government has created vast new bureaucracies and raised taxes to a staggering level not seen since World War Two. (WW II). LBJ helped create welfare (Aid to Families with Dependent Children), Medicare, Head Start, the Job Corps, and Medicaid.

Many of the programs created by LBJ, and his successor Richard Nixon, have done some good. We would like to believe trillions, of dollars deliver some positive benefits. But the poverty program outlined by LBJ in 1964 was hijacked by bureaucrats and activists. Instead of giving a helping hand, welfare trapped several generations in a vicious cycle of handouts coupled to dependency. The Federal government’s programs and policies crowded out many of the private self-help networks and societies that effectively helped the downtrodden in the past.

They did much more than that. They destroyed initiatives, and diminished the hope of generations of people. They did that by failing to understand the basic tenants of human behavior. Resentment breeds on dependence. Make a person dependent upon you and that person will eventually despise you, and what you have done to him or her. A proverb that I head often as a young person was that “it is better to teach a man to fish than to give him a fish.” The first part promotes to self sufficiency, the other makes him dependent.. The first of the “basic opportunities” that LBJ cited was

“It will give almost half a million underprivileged young Americans the opportunity to develop skills, continue education, and find useful work.”

Placing people on the dole does not do this. Placing people on the dole takes opportunity away, and provides incentives to do nothing but lose interest in living a rewarding and fulfilling life. To earn a living is far more enriching than being given a living. Anyone who has worked their way through college, living partially on student teaching and on returned soda bottles, knows this to be true. The pride in that accomplishment lives on far longer than the memory of the hard times. The empowerment of people deprived from earning a living is the antidote to the War on People resulting from the War on Poverty.

Viewed broadly, LBJ’s War on Poverty was, and remains, a failure. Fortunately politicians, surprisingly, reformed welfare in 1996. This revision is arguably the most successful anti-poverty initiative of the past half century. Before 1996, Aid to Families with Dependent Children (AFDC) was the pillar of welfare. In 1996 welfare reform changed the program’s name to Temporary Assistance to Needy Families (TANF). The 1996 reforms eliminated welfare’s “entitlement” status and ending the automatic “right” to benefits. If you are able-bodied and need assistance, you now have to get training or work to receive benefits. Since 1996, welfare is temporary assistance. By emphasizing work and responsibility, the 1996 reforms push all able-bodied Americans towards the independence, self-respect, and self-sufficiency that come from working. The War on Poverty may have begun in 1964, but it wasn’t until 1996 that America began to gain purchase on poverty. In the brief period since 1995, 3.5 million fewer people now live in poverty today than in 1995. (D. Armey, January 9, 2004)

Armey suggests that “winning the war on poverty...” began when the government began to demand some service for monies received”. I could not agree with this more. This success reflects the “teach a man to fish...” proverb cited previously. Another impetus for reform was Hurricane Katrina. Katrina did far more good than one can imagine. It provided a wake up call to everyone who wants to “give more to the poor”. The “poor” in New Orleans were not terribly well defined, other than to be defined as Black. The assumption is made by activists that the poor had to be Black because more Blacks than Whites died in New Orleans (wrong), more Black homes were destroyed (wrong), and the Black community was mistreated by both Federal and State governments – wrong again. The films of the rescues showed all races being saved. The buses going to Texas and Arizona were bringing all effected people to places where they could be helped. The FEMA monies that were ill spent on tattoos, drink, drugs, engagement rings, and pornography rather than on food and shelter was no surprise, and was not necessarily race specific. It was the government's money, so let's spend it. If each recipient were asked to work in a relief effort in exchange for funds to help them, would these monies have been squandered in the same way? I doubt it. Some surely would squander earned monies, but their actions in this regard precede the hurricane.

The Poor

There are two versions of the federal poverty measure: the poverty thresholds (which are the primary version) and the poverty guidelines. The Census Bureau issues the poverty thresholds, which are generally used for statistical purposes. The Department of Health and Human Services issues the poverty guidelines for administrative purposes.

Since the 1960's, the United States Government has defined poverty in absolute terms. The absolute poverty line is the threshold below which families or individuals are considered to be “lacking the resources to meet the basic needs for healthy living; having insufficient income to provide the food, shelter and clothing needed to preserve health.”

The above forms the basis for the current measure of poverty in the U.S. Since this measure was absolute (i.e., did not depend on other events), it supposedly made it possible to objectively answer whether any progress was being made in the War on Poverty.. The newly formed Office of Economic Opportunity (OEO) adopted the lower of the poverty thresholds for statistical, planning and budgetary purposes in May 1965.

The Bureau of the Budget (now OMB) adopted this definition for statistical use in all Executive departments in 1965. The measure gave a range of income cutoffs, adjusted for factors such as family size, sex of the family head, number of children under 18 years old, and farm or non-farm residence. The economy food plan (the least costly of four nutritionally adequate food plans designed by the Department of Agriculture) was at the core of this definition of poverty. Apart from tying thresholds to the Consumer Price Index (CPI) and changing Farm criteria, the U.S. government's approach to measuring poverty has remained static for the past forty years.

Current poverty guidelines are a bit different from the original guidelines. The 2005 Health and Human Services guidelines define $12,830 (more in Alaska and Hawaii) as the poverty level for 2 person family units, and $19,350 for four person family units.

Another way of looking at poverty is in relative terms. “Relative poverty" can be defined as “having significantly less access to income and wealth than other members of society”. In 1999, the income of a family at the poverty line was $17,020. This was 28.49 % of the median income in the U.S. In 1959 a family at the poverty line had an income that was 42.64 % of the median income. Thus a poor family in 1999 had relatively less income than a poor family in 1959. Why is this? One is the way poverty is defined.

In 1995, the National Research Council’s Committee on National Statistics found that "the official poverty measure in the United States is flawed, and does not adequately inform policy-makers or the public about who is poor and who is not poor."

The panel discovered that the official U.S. poverty measure "has not kept pace with far-reaching changes in society and the economy." The panel proposed a model based on disposable income:

“According to the panel's recommended measure, income would include, in addition to money received, the value of non cash benefits such as food stamps, school lunches and public housing that can be used to satisfy basic needs. The new measure also would subtract from gross income certain expenses that cannot be used for these basic needs, such as income taxes, child-support payments, medical costs, health-insurance premiums and work-related expenses, including child care.”

Having enough food to feed a family is an important issue in the world. Eighty-nine percent of American households were food secure throughout the entire year 2002, meaning that they had access, at all times, to enough food for an active, healthy life for all household members. The remaining households were food insecure at least some time during that year. The prevalence of food insecurity rose from 10.7 % in 2001 to 11.1 % in 2002, and the prevalence of food insecurity with hunger rose from 3.3 % to 3.5 %. This report, based on data from the December 2002 food security survey, provides statistics on the food security of U.S. households, as well as on how much they spent for food and the extent to which food-insecure households participated in Federal and community food assistance programs.

Frankly, given the precision and accuracy of the above data, the statistical significance of the difference between 10.7 and 11.1% (food security 2001) and 3.3 and 3.5% (food security 2002) is at best questionable. Food security seems basically guaranteed.

The definitions of poverty in the United States do not provide comparisons between poverty here and poverty in other countries. Poverty in Haiti, Brazil, India, parts of Italy, Spain, Russia and China is far different. Cardboard boxes as substitute homes, ditches as toilet facilities, lack of medical care, and no food are everyday occurrences in these poor people's lives. American “poor”, often have a car, televisions, cell phones, computers, and air conditioners, in addition to all the food they need. They also have access to the largess of their fellow citizens…In 1991 private charities provided, in cash or in kind, over $176 billion for health, education, and welfare. More than $100 billion of that amount was in cash, provided by the 72 per cent of American households that contributed to charity; the remainder was in the form of volunteered time. In 1991 alone, Americans volunteered over 15 billion hours of their time to charitable activities, the equivalent of nine million full-time employees.

The War on Education

A casualty of the War on Poverty is Black education. Dr. Thomas Sowell points this out in great detail in “The Education of Minority Children©. “ This article is of great interest, and is indeed pertinent to this discussion. In part he states

“Ironically, black high schools in Washington today have many of the so-called "prerequisites" for good education that never existed in the heyday of Dunbar High School-- and yet the educational results are abysmal. ”Adequate funding" is always included among these "prerequisites" and today the per pupil expenditure in the District of Columbia is among the highest in the nation. During its heyday, Dunbar [school] was starved for funds and its average class size was in the 40s. Its lunchroom was so small that many of its students had to eat out on the streets. Its blackboards were cracked, and it was 1950 before the school had a public address system. Yet, at that point, it had 80 years of achievement behind it, and only 5 more in front of it.

As a failing ghetto school today, Dunbar has a finer physical plant than it ever had when it was an academic success. Politics is also part of this picture. Immediate, tangible symbols are what matter within the limited time horizon of elected politicians. Throwing money at public schools produces such symbolic results, even if it cannot produce quality education.

Most discussions of the poor neglect the educational aspects of poverty. No child need suffer a lack of education. Public schools are just that – public. If they are poor schools where little education takes place, that is not a poverty issue. That is a political one with roods in the Education system and the Unions that run it. Of note is the fact that Black Education is not the only victim of the War on Poverty. All schools that were minimally funded, Black, White, Asian, etc. lose when money replaces standards, and hard work. One does not have to be Black to know poverty or hard times. Nor does one have to have been educated in a ghetto to see ruined facilities that still taught well. Any factory town in the Northeast or Mid-West could tell tales not so dissimilar to that of Dr. Sowell.

Discussion

There is no doubt about it. Some Americans have less money than others. Whose fault is that? I maintain it is not the governments, nor is it institutional bias or racism. It is a disease called entitlementitis. This disease is a slow growing one, and needs generations of individuals to be infected before it becomes part of that group’s behavior. It is passed from parent to child, and is exacerbated by government agencies and liberal activists who feel that exposure to the antidote – work – constitutes a form of cruel and unusual punishment. The relationship between welfare recipient and government worker/civilian activist is a symbiotic one, i.e. one cannot exist without the other. Consequently, if there were no poor, there could be no agency to help the poor. If Jesse Jackson or Al Sharpton woke up one morning and there were no poor Blacks, no prejudice in work, no lack of funds to train workers, and a successful anti-poverty program they would panic. By definition, poverty will never be resolved in their eyes. Their political power and lifestyles are defined by poverty. The more poverty, the more important they appear to be.

So they rail against the military in general, the War in Iraq specifically, the possible war in Iran, the tax cuts for the “Rich”, and the lack of funds in the anti-poverty programs in America. I have always been amazed at the naiveté of people who believe that monies not spent elsewhere would automatically be targeted to programs for the poor. They really believe that if we reduced the military budget we would increase the monies in the anti-poverty or other entitlement programs. That is not the case. Most likely the military budget would shrink, and the anti-poverty programs would stay about the same. Similarly if we eliminated the anti-poverty program, the military budget would not grow accordingly.. Competition for funds is such in Washington that any number of programs could be awarded the money.

For fun, let’s look at this in a fairly simple mathematical way. The estimates of expenditures in the War on Poverty range from $3.5 to $9.0 Trillion during the last 40 years. This does not include in kind services or private contributions to the poor. For the sake of discussion, let’s take the average dollars - $6.25 Trillion dollars. Now let’s give each poor person $50,000/annum. This $6.25 Trillion would provide an annual “salary” to approximately 12,500,000,000 people. (Interestingly if we assume that there were as many as 50,000,000 poor in America, this largess would last approximately 167 years.) Were this done, there would be no poor. Additionally, the now salaried “poor” would pay taxes, and thus some money would be returned to the government coffers, and possibly even to the American taxpayers who has funded this debacle for the last 40 years..

If I am anywhere near correct, we could have declared victory over this War years ago with this simple expedient. Let’s do it now. It’s not any worse a solution than those tried to date.