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Posts Tagged ‘Poverty’

This story from the Manhattan Institute’s City Journal makes the point, excerpted below, that the welfare state subsidizes dysfunctional behavior. But read the story to understand how big government destroys lives, ruins families, and creates inter-generational poverty. A very powerful, albeit very depressing article. It’s basically the American version of this grim news report from England.

Connecticut is among the most generous of the states to out-of-wedlock mothers. Teenage girls like Nicole qualify for a vast array of welfare benefits from the state and federal governments: medical coverage when they become pregnant (called “Healthy Start”); later, medical insurance for the family (“Husky”); child care (“Care 4 Kids”); Section 8 housing subsidies; the Supplemental Nutrition Assistance Program; cash assistance. If you need to get to an appointment, state-sponsored dial-a-ride is available. If that appointment is college-related, no sweat: education grants for single mothers are available, too. Nicole didn’t have to worry about finishing the school year; the state sent a $35-an-hour tutor directly to her home halfway into her final trimester and for six weeks after the baby arrived.

In theory, this provision of services is humane and defensible, an essential safety net for the most vulnerable—children who have children. What it amounts to in practice is a monolithic public endorsement of single motherhood—one that has turned our urban high schools into puppy mills. The safety net has become a hammock.

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The Census Bureau will be releasing new poverty-rate numbers on Thursday and the numbers are expected to show a big move in the wrong direction. Much of the coverage will be on how much the poverty rate increases, with 15 percent being a likely amount according to some estimate. There also will be lots of discussion about the political implications, as this Associated Press story illustrates.

The number of people in the U.S. who are in poverty is on track for a record increase on President Barack Obama’s watch, with the ranks of working-age poor approaching 1960s levels that led to the national war on poverty. Census figures for 2009 — the recession-ravaged first year of the Democrat’s presidency — are to be released in the coming week, and demographers expect grim findings. It’s unfortunate timing for Obama and his party just seven weeks before important elections when control of Congress is at stake. The anticipated poverty rate increase — from 13.2 percent to about 15 percent — would be another blow to Democrats struggling to persuade voters to keep them in power.

But the real story should be the degree to which the federal government’s War on Poverty has been a complete failure. Taxpayers have poured trillions of dollars into means-tested programs, yet the data show no positive results. Indeed, it’s quite likely that the programs have backfired. As shown in the chart, Census Bureau data reveal that the poverty rate was steadily falling in the 1950s and early 1960s, but then stagnated once the War on Poverty began. It’s possible that there are alternative and/or additional explanations for this shocking development, but government intervention may be encouraging poverty by making indolence more attractive than work.

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Walter Williams periodically has explained that the main beneficiaries of the so-called War on Poverty are all the bureaucrats who have very lucrative jobs in all the various redistribution programs, agencies, and departments. He calls these people “poverty pimps” and asks whether they actually have an incentive to solve problems since that would put their jobs at risk. Those are all interesting issues, but this post looks at the number of bureaucrats, by state, working in the “public welfare” industry (the Census Bureau has an interactive program that allows this type of calculation). Comparing that number of bureaucrats to each state’s population allows the creation of a “Poverty Pimp Index” showing the number of bureaucrats (at the state and local level) per 100,000 of population.

Surprisingly, New Hampshire is the worst state, requiring four times as many bureaucrats per capita to administer income-redistribution programs as Hawaii, which is the surprise winner as the most efficient state. I’m sure these numbers represent a gross over-simplification, and they may depend on how states classify employees, so this is nothing but a quick look at some interesting data. If anybody knows of more substantive research on the comparative efficiency of how states administer programs, please send it my way.

The Poverty Pimp Index (“public welfare” bureaucrats per 100,000 residents)

New Hampshire          360
Alaska                             302
New York                       290
Maine                              280
Wisconsin                      277
Pennsylvania               277
DC                                     277
Minnesota                     266
New Jersey                   255
Ohio                                 255

Kansas                             121
Idaho                               120
Georgia                           118
Texas                               113
South Carolina             104
Nevada                            99
Mississippi                     96
Indiana                            95
Florida                             92
Hawaii                              86

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Hugo Chavez is a palpably evil thug, and he confirms this status with a new proposal to issue cards that almost certainly will be used to ration food. Left-wing despots claim that their policies put “people above profits,” but they never can explain why people (especially the masses) have much higher living standards in countries where “capitalist greed” runs rampant.

Presented by President Hugo Chávez as an instrument to make shopping for groceries easier, the “Good Life Card” is making various segments of the population wary because they see it as a furtive attempt to introduce a rationing card similar to the one in Cuba.

The measure could easily become a mechanism to control the population, according to civil society groups.

“We see that in short-term this could become a rationing card probably similar to the one used in Cuba,” Roberto León Parilli, president of the National Association of Users and Consumers, told El Nuevo Herald. “It would use more advanced technological means [than those used in Cuba], but when they tell you where to buy and what the limits of what you can buy are, they are conditioning your purchases.”

Chávez said Tuesday that the card could be used to buy groceries at the government chain of markets and supplies.

…In theory, the government could begin to favor the import of products to be sold through the government chains and have more control over the type of products purchased and the people buying them.

Jaime Suchlicki, director of the University of Miami’s Institute for Cuban and Cuban-American Studies, said that Venezuela’s current problems of scarce supplies are very similar to those Cuba faced when Fidel Castro introduced the rationing card.

“The card emerged when goods began to become scarce,” Suchlicki said. “The government had seized many companies that did not work because the government managed them poorly. Then they decided to distribute groceries through those cards.”

And although the cards were introduced as a mechanism to deal with scarcities, Suchlicki said, they later became an instrument of control.

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