Fifteen trillion dollars: That’s how much American taxpayers have forked over in the name of helping the poor since 1964. And what do we have to show for it? A poverty rate that has barely budged, an entrenched bureaucracy, and a population — like that of Greece and Portugal, two welfare-state basket cases — increasingly dependent on government handouts.
These are the conclusions of a recent Cato Institute report on the American welfare state by Michael Tanner, Cato’s director of health and welfare studies and author of The Poverty of Welfare: Helping Others in Civil Society. It is hardly an encouraging read, to say the least.
When President Johnson declared war on poverty nearly half a century ago, writes Tanner, “the poverty rate in America was around 19 percent and falling rapidly.” Increasing prosperity brought about by the free market, coupled with strong civil institutions such as churches, charities, and fraternal organizations, was already accomplishing the unthinkable: making poverty, the general condition of mankind throughout most of history, a rarity in the United States. A rising tide, as Johnson’s predecessor observed, does indeed lift all boats.
The man at the helm of the ’64 ship of state, however, decided the tide wasn’t rising quickly enough and so he would help it along by filling buckets with water from the port side of the ship and emptying them on the starboard side. Not surprisingly, this strategy failed to increase the water level. Thus, despite $12 trillion in federal welfare spending and $3 trillion in state and local government welfare spending over the past 48 years, says Tanner, “the poverty rate never fell below 10.5 percent and is now at the highest level in nearly a decade” — 15.1 percent and climbing. “Clearly,” he adds, “we have been doing something wrong.”
Of course, that all depends on how one defines success in the war on poverty. For those on the receiving end of government handouts — not just the poor but also those paid to provide services to them, such as doctors and landlords — success is getting more taxpayer dollars every year; and by that standard, the war has been a remarkable achievement. “Government spends $20,610 for every poor person in America, or $61,830 per poor family of three,” Tanner reports. “Given that the poverty line for that family is just $18,530, we should have theoretically wiped out poverty in America many times over.”
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