analyticsbox | Jul 28, 2021
The unintended Consequences
In the 60’s, there was an attempt to eradicate poverty by declaring a “war on poverty”. This was a government attempt to make things better for low income Americans. About forty programs were started to help those in need. The stated purpose was to give folks a ‘hand up, not a handout’, to lead them to self sufficiency and out of poverty on their own.
But it was Milton Friedman who so famously stated, “judge programs by their outcomes, not their intentions.”
Since the 60’s when President Johnson instituted this program, about 23 Trillion has been spent ‘helping’ people. What has that enormous sum bought us? The results have been minimal, at best. Instead of giving people a hand up, we have trapped many in a culture of dependency and a sense of entitlement.
From 1950 thru 1964 when the ‘war’ was instituted, poverty rates declined from 30% to 13%. In the last 57 years it has stagnated between 12 and 15%. Are we to conclude that we have accomplished anything? Doesn't look like it. Yet many of those in poverty have homes, only 2% are homeless, many have TV’s, mobile phones, AC, etc.. How can that be? Because the criteria for poverty does not count the subsidies and handouts people receive.
We have done nothing to help the poor become self-sufficient and get off welfare as intended. We are just giving them money and things so they do not have to become self-sufficient, they can just live off the government handouts. And they do.
The Bottom Line
Our goal to get low income individuals off welfare and become self-sufficient has not worked at all! What it has done is make many people dependent on the government and we have created a climate of entitlement. The incentives in these programs are all wrong, and the results are understandable. It is time to revisit these programs and change the criteria so people are motivated to work and depend on themselves!