Posted on 04/20/2023 12:24:53 PM PDT by Twotone
The latest banking crisis only increased concerns that the U.S. economy is headed for a downturn. Some politicians, including President Joe Biden, are now exploiting recession fears to extend pandemic-era aid programs.
The sad reality is that these aid programs cannot deliver on their promises to solve the poverty problem.
Between the beginning of Ronald Reagan’s presidency and that of Donald Trump, taxpayer spending on the nation’s 13 largest means-tested welfare programs increased by almost 240 percent. While poverty generally tends to fall during boom times and rise during busts, the overall trend has been mostly unchanged. That’s a terrible return on public investment.
My recent research, commissioned by the Commonwealth Foundation, suggests the ever-soaring growth in public spending is likely counterproductive. In fact, cutting government spending—and expanding economic freedom more broadly—can simultaneously lower poverty and promote prosperity across all income levels.
Economic freedom entails expanding the sphere of personal choice—and minimizing the role government plays in our lives. It means reasonably low levels of government spending, low taxes, and a lack of onerous labor market regulations.
Nearly three decades of research has found that areas with higher levels of economic freedom experience positive outcomes, ranging from faster economic growth to cleaner environments. Data from the 2022 Economic Freedom of North America (EFNA) report shows that, on average, residents in the most economically free states have incomes per capita over $3,000 higher than residents in the least free states.
The least free states also tend to spend significantly more on public welfare programs—with the 10 least free states spending almost twice as much per recipient as the most free states. While poverty rates are higher in less free states, they’re not high enough to necessitate twice the spending. Unfortunately, government solutions that focus on the alleviation of poverty—and not the promotion of prosperity—come riddled with damaging unintended consequences. The structure of many programs is at odds with incentivizing upward mobility, essentially trapping recipients in the very poverty they want to escape.
The goal of a successful anti-poverty program should be creating an environment conducive to broader human flourishing. Economic freedom is the key to crafting this environment. My research suggests that economic freedom not only alleviates poverty but can also promote economic prosperity for all people.
Specifically, my findings show that a one-point improvement in economic freedom over a five-year period correlates with substantial decreases in poverty the subsequent year.
And it’s not just the poverty rate that improves. In Pennsylvania, for example, a one-point improvement in its EFNA score over five years is associated with a $2,338 growth in per capita income and a 2.08 percentage point employment increase.
New York, California, Hawaii, Vermont, and Oregon are currently the lowest-ranked states for economic freedom. While New York and California remain relatively wealthy, the other three have per capita personal incomes lower than the national average.
While large jumps are rare, changes in economic freedom tend to accumulate over time. In the same five-year period, Arizona lost nearly a full point on the EFNA index while North Dakota gained a full point. Six additional states changed more than half a point.
Critics might object that cutting government spending would mean decreasing needed assistance to the poor—but this doesn’t have to be the case. And not all government spending is helpful; the federal government spent $281 billion in improper payments in 2021 alone.
Government spending also tends to crowd out what would otherwise be private spending or investment. Even programs that are designed to attract or spur economic development can hamper the business environment.
Economic freedom, however, strongly relates to entrepreneurship. In recent years, people and businesses have fled New York, California, and Illinois—all states that rank low in economic freedom. Where are they going? Texas and Florida are popular choices—both consistently rank among the top five most free states.
By pursuing an agenda of economic freedom, policymakers might be able to decrease poverty and spread the benefits of prosperity more widely. Win-win policy solutions are rare, yet this is an example where government can help more by doing less.
I often try to get people to see the relationship between the 24th amendment and how we got our welfare program.
Most people cannot grasp the connection, but our current welfare system *IS* the result of passing the 24th amendment.
Not going to happen until we’re can’t afford to fund the programs anymore.
This is exactly correct. From it's creation by Lyndon Johnson in 1964, it was entirely about winning the massive poor class to keep Democrats in power.
And they only recently got the right to vote because the 24th amendment (Deceptively sold as a anti "RACISM" Amendment) gave non taxpayers the right to vote.
This was the beginning of our long national nightmare with reckless spending.
Govt surplus foods at govt distribution centers. Pay farmers to produce and stop paying them to not produce. Very tough certifications required to be qualified to receive.
Housing? No, barracks will inspire people to go get a job and move out.
There’s more to this
We fought The War on Poverty, and Poverty won.
“For ye have the poor with you always,
and whensoever ye will ye may do them good:
but me ye have not always.”
Mark 14:7
Barracks and a chow hall served me for a few years!
yup
“Barracks and a chow hall served me for a few years!”
I occasionally get into discussions with people, unlike yourself, who don’t have any inkling of the trade off a military member makes for their service. You do and so do I. And the minute people think we are overpaid in our retirement or have too many benefits I have to ask them just one question that normally terminates that observations:
What is the price of being willing to walk in front of a bullet for years, sometimes over 20, worth? We already know the cost of it.
If you spent time in a barracks and chow hall, you earned your room and board. (And probably a whole lot more) Welcome back from one who walked there, also, and maybe beside you.
wy69
Once they get their dictatorship established, there will be no more welfare programs. They’ll be forced to work. The role models the Soviet Union, Nazi Germany sent the idlers and work shy to the camps.
The purpose of welfare was to keep the starving masses from tearing rich bastards like FDR limb from limb and burning down his house. The rich are still rich, the poor are more numerous, and you and I get to pay for all of it. Isn’t communism wonderful?
Just one dramatic example. There are many more. I can get a pretty decent pair of athletic shoes for $50, but there is a reason why so many bodegas and convenience stores in poor neighborhoods sell luxury goods.
Almost works, too, if you prioritize law enforcement, so business indirectly subsidized don’t flee from crime. Thank almost never happens in similar situations.
Also fails if the typical 75-85 cents from every subsi-dollar goes to administrative layers of corruption and nonsense.
Starts from the TOP, in DC
Inflation between 1982-2022 (40 years) was 211%.
Population between 1980 and 2020 increased 60 million.
Most likely, the 240% number applies to the amount spent per recipient.
If true, then welfare per recipient has gone up less than 1% per year in constant dollars.
It would be interesting to see the total constant dollar welfare expenditure in 1982 compared to 2022.
Also interesting - how much has the percentage of the USA population collecting welfare gone up in 40 years?
This information comes from a college professor.
I will speculate that he deliberately concealed the constant dollar expenditures and the percentage of welfare recipients because he would catch a lot of Left Wing anger if he revealed that data.
Centuries ago before our country was even founded you needed to work to eat. If you couldn't feed yourself or your family the old New England towns would auction you off. You would be sold to the highest bidder in town and you would work for them full time. In return you got a roof over your head and some food until you could support yourself.
Where are their reparations?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.