Should Government Anti-Poverty Programs Promote Independence or Dependence?

Here’s a question where I’ll bet you think the answer ought to be completely obvious: Should the purpose of government “anti-poverty” programs be to help the beneficiaries rise from poverty and become successful and independent, or alternatively should the purpose of such programs be to entice the recipients of aid into a life of permanent dependency upon government handouts? From the earliest days of the anti-poverty programs back in the 1960s, the programs were sold to the public as being a temporary boost by which the poor could be helped to escape from poverty and achieve self-sufficiency. And yet, about six decades in, the rate of poverty never seems to go down, and the number of program beneficiaries grows inexorably. Did something change along the way?

The answer is yes. A new book I’ve just read documents a 180 degree reversal of our government’s policy on the purpose of the anti-poverty programs since the time they began. The book is “The Myth of American Inequality,” by authors Phil Gramm, Robert Ekelund and John Early, published in September 2022. You may recognize Gramm as having been a three-term Senator from Texas (1985-2002). Ekelund is an academic economist, currently at Auburn University, and Early has had a career largely in government statistical offices including the Bureau of Labor Statistics.

Not to overly flatter myself, but this book mostly covers subjects that I have been harping on for a decade or so, accumulated under my tags for Poverty and Income Inequality. However, these guys are much more knowledgeable than I am about the nitty-gritty of how the government statistics on poverty and income inequality are compiled, and I highly recommend their rendition if you want to really understand many of the machinations of our bureaucracy in producing statistics designed to gain support for further growth of the government.

The title of the book — “The Myth of American Inequality” — refers to the statistical legerdemain by which the government statistical bureaucrats (mainly in the Census Bureau and Bureau of Labor Statistics) are able to make poverty and “income inequality” in the U.S. appear far, far greater than they are in reality. From a summary statement in the first chapter, page 4:

The official measure of the poverty rate which uses the Census Bureau definition of income, does not count two-thirds of all transfer payments as income to the recipients. As a result, for more than fifty years, the measured income of low-income Americans has been substantially understated. As we will show, when you count all transfer payments as income to the households that receive the payments, the number of Americans living in poverty in 2017 plummets from 12.3 percent, the official Census number, to only 2.5 percent.

If I have one main criticism of the book, it is that the authors do not forcefully state that the statistics on poverty and income inequality as presented today are fundamentally fraudulent and deceptive, nor do the authors put any blame on anyone for allowing these statistics to become so distorted and misleading over time. It’s like it was just some naturally-occurring process, and things just turned out this way. My own many posts on these subjects do not give that kind of the benefit of the doubt to our self-serving bureaucrats.

The book comes closer to asserting intentional government wrongdoing in describing the inversion of the purpose of the anti-poverty programs from promoting independence to promoting dependence on government. At page 67, the authors quote from President Johnson in his March 16, 1964 address to Congress proposing the War on Poverty:

Johnson’s stated policy objective [was] “to allow them to develop and use their own capacities.”

But then, according to the authors, something big changed, around a time they identify as “the turn of the twenty-first century”:

It appears that both the objective and the method of outreach started to change around the turn of the twenty-first century. Government has not only raised benefits and lowered the eligibility standards, but also started actively to urge people to become more dependent on government. From 2000 through 2016, the US Department of Agriculture (USDA) conducted aggressive recruitment efforts that it claimed boosted food stamp enrollment by 157 percent. USDA spent $40 million annually on advertising to recruit beneficiaries, above and beyond the usual public service announcements concerning the availability of benefits. Seniors and Hispanics were targeted with the dramatized message that they were entitled to the benefits, had paid taxes for them, and should feel guilty because, by refusing to apply for them, they were hurting their families.

And it goes on and on from there. Examples:

• “USDA . . . trained state and local social service agencies to encourage their public assistance clients to enroll in food stamps.”

• “One [USDA] training module was titled ‘Overcome the Word “No,”’ which taught techniques for changing the attitudes and values of people preferring not to enroll in food stamps.”

• “USDA rewarded and publicized state social service agencies for their success in overcoming the ‘mountain pride’ of potential beneficiaries ‘who wished not to rely on others.’”

The authors assert that these kinds of efforts to recruit people into dependency are largely to blame for the substantial disappearance over the last several decades of earned income among people in the bottom quintile of the income distribution, with the former earned income of people in this quintile now replaced with government transfers of various sorts. From pages 67-68:

In the fifty years after the funding for the War on Poverty ramped up in 1967, the bottom quintile’s share of the nation’s earned income fell by more than half. . . . Nevertheless, the standard of living among lower-income households improved substantially from massive government subsidies.

In placing the sea change in the purpose of the anti-poverty programs “after the turn of the twenty-first century,” the authors never attempt to put accountability on any particular administration, or on the bureaucracy or any particular part of it. Was this change brought about by George W. Bush? Or was Obama more responsible? Or was this the bureaucracy following its own internal imperatives with little or no direction or control from the elected leaders? These authors aren’t going to tell us.

My own take is that where we are now is the position that the bureaucratic imperative of growing staff and budget was always heading toward. It would take constant focus and pushback from the elected President and his administration to keep the programs from getting perverted into vehicles for permanent dependency. Obama certainly offered no such pushback, but rather overt encouragement. G.W. Bush may not have given full encouragement, but also never pushed back to the extent he should have.

Anyway, if you buy and read this book, as well as my 100 or so prior posts on these subjects, you will then be among the several dozen people in the country who are on to the statistical scams by which the bureaucracy manipulates the voters into supporting more and more government spending, none of which ever can or will reduce “poverty” or “income inequality” as the government measures them. These few dozen of us will then only need to bring around the tens of millions who have fallen for the scams in order to get some reforms going. Let’s get to it!