Friday, April 26, 2013

Dealing With Poverty In America

Since President Lyndon Johnson's Great Society and War On Poverty, the US taxpayer has spent $19 Trillion attempting to eliminate poverty in America.  This money has been committed to all kinds of programs, throughout the federal government, that were supposed to address discrimination and lift people out of poverty.  Guess what?  It has failed miserably.  The Obama poverty rate is higher today than when Bush II was President.  20% of Americans officially live in poverty.  Now to be clear this is not the poverty that exists in Africa, India or other countries; but rather this means people living on income, or support, of about $35,000 a year or less. 

Obviously, nobody is starving in the United States, since 50 million people are currently on food stamps.  Poor kids get free breakfast and lunch, at school, at a minimum even if their parents waste their Food Stamp money on dumb purchases.  In fact, the obesity problem we have in the United States cuts across all income levels; the poor, the middle class and the rich are all too fat. 

Franklin Roosevelt's New Deal introduced the concept of the social safety net, when he created Social Security, which is today headed toward bankruptcy because this program is not actuarially sound.  Roosevelt also created "Relief" and Food Stamps, what we today call Welfare that was supposed to be a temporary program and we know the end of that story.  Welfare has destroyed the Black family, as 7 out of 10 babies, are now born to single Black moms living in poverty.  Lyndon Johnson added Medicare also headed toward insolvency because most Americans have not paid in enough, through their regular contributions, to actually cover their health care after turning 65 years old. 

President Bill Clinton worked with Republican House Majority Leader Newt Gingrich to "end welfare as we know it" and for a time Welfare rolls began trending down because of limits on benefits and requirements of the program.   Clinton wisely announced that the "era of big government is over" and actually worked with Republicans to balance the federal budget for a few years.   The economy did well under Clinton, until he followed his Socialist tendencies and raised taxes, which resulted in a Recession by the time Bush II assumed office. 

Bush II added about $4 Trillion to the National Debt over 8 years; but for the most part, with the exception of the new Prescription Drug benefit added to Medicare, held the line on social spending.  And, then came Socialist President Obama who has already added $6 Trillion to the National Debt in just four years, with no end in sight, by dramatically increasing the size of spending and Entitlements.  In fact, out of about $3.7 Trillion in annual federal government spending, $2.3 Trillion is going to Entitlements; dramatically more people on Welfare, Food Stamps, Disability Benefits, unemployment insurance etc. etc.  

None of these programs has ended poverty in America.   Some federal goverment programs have actually increased poverty by failing to break the cycle.  This is all just throwing more money down a rat hole that fails to address the real problem.  We have to change behaviors with the right incentives in place.  And, we must improve education in the inner cities of the United States so that kids are either college bound, or graduate with a marketable job skills.  Just throwing more money at the poverty problem into these failed programs will achieve the same dismal results. 


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