A Trillion Can Buy A Good Cup of Coffee But Not Much Else

When my daughters were in high school, our dinnertime included discussion of what was going on in the world.  One recurring theme was poverty, why it exists and what could be done about it.  Not infrequently, the only solution they could come up with is to spend more money to help the poor get out of poverty.

At that time, the US was already spending around $350 billion per year on various poverty programs ranging from health care to food stamps, housing aid in various forms and direct cash outlays.  Since the start of President Lyndon Johnson's Great Society in 1964, total spending on these programs had reached over$1 trillion. 

As counterpoint to my children's view that we needed to spend more to fight - and presumably win - the "war" on poverty, I asked two questions: why, if we have already spent over $1 trillion already should we continue to spend more?  And, if we do, why should we expect the "war" to be won when, so far, it hasn't been?

At that point, my girls fell silent.  The best they could muster was "Well, Dad, it's the right thing to do. I mean, look at how much we have."  (The last being an appeal to rich-white-male guilt I am supposed to carry.) 

Strangely, when I ask the same question of advocates or activists for the impoverished, the reply is some variation of "it's the right thing to do."  Or, the respondent points out that there is simply more poverty than ever before.  "But," I respond, "isn't that what the poverty programs were suppose to fix?  Could it be that they just aren't working and never have?"

Those dinner conversations took place in the 1980s.  Take a look at the accompanying chart. Produced by The Heritage Foundation, it graphs annual spending on various poverty programs from 1950 through the end of 2011.  Yearly spending has grown to $927 billion in 2011 - in inflation adjusted dollars - across 126 programs (and supporting beauracracy). 

Put that in perspective.  $927 billion equals $20,610 for every poor person in the US or $61,830 for every poor family of three.  Each year.  Giving the poor the cash outright would probably work just as well - or perhaps better - than the so-called programs and resulting bureaucracy the spending entails.

The rate of increase is 76% since Bill Clinton's 1996 welfare reform and 20% in the three years since 2008.  Sum the numbers and it amounts to $15 trillion spent since 1964 when the War on Poverty was declared.  Yet, according to current stats, 46 million Americans are in poverty today. Some war. I think we lost. 

What is going on?

Last June, the Cato Institution produced an excellent analysis of poverty spending (the full report can be accessed here).  They say quite rightly that whatever the Federal Government is doing isn't working.  In a nutshell, Cato draws the obvious conclusion that we are spending money in a way that makes poverty more comfortable rather than creating prosperity that gets people out of poverty.

My daughters are more cynical about government spending now - especially since they've become home-owning taxpayers.  Yet, one of them continues her enthusiastic support for President Obama.  When I press her on this apparent contradiction, pointing out that Mr Obama has grown entitlement spending enormously, her reply is much along the "it's the right thing to do" line. 

You see, it feels good to support these programs whether or not they make any sense - they clearly don't.  But in a climate of political correctness and love-thy-neighbor politics, feelings trump thought (and facts) every time.