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Home Publications Blogs Beat the Press Trillions of Dollars to Help the Poor?

Trillions of Dollars to Help the Poor?

Friday, 27 June 2014 05:11

The NYT had an interesting piece on the persistence of poverty in eastern Kentucky and rural areas more generally. However the piece is seriously misleading when it refers to "the trillions of dollars spent to improve the state of the poor in the United States and promote development." This comment would likely lead readers to believe that we are spending large amounts of money on anti-poverty programs. That is a very questionable claim.

Current spending on TANF, the main federal anti-poverty program is $17.4 billion, less than 0.5 percent of the federal budget. The budget for food stamps, which do not go exclusively to the poor, is around $75 billion or a bit less than 2.0 percent of federal spending. Other anti-poverty programs account for a considerably smaller share of federal spending.

In prior decades anti-poverty programs accounted for a larger share of the budget, but it is misleading to imply that they have ever been a major drain on the public's tax dollar. Anti-poverty programs have always been dwarfed by spending on the military and social insurance programs like Social Security (which does have an enormous impact on poverty).


Comments (5)Add Comment
"interesting" is one word to describe it . . .
written by Jennifer, June 27, 2014 7:53
Aside from the fact that a bit less then a trillion dollars has gone into the region via anti-poverty programs there were a few things about that piece that are worth highlighting.
It’s coal country, but perhaps in name only. In the first quarter of this year, just 54 people were employed in coal mining in Clay County,

So when politicians rail about EPA policies supposedly taking away jobs one has to wonder what jobs they are talking about.
The article discusses the problems of Eastern Kentucky which I imagine are similar to many rural areas, low-density populations, limited transportation options, and
"...there has been a historic lack of investment in human capital in these areas.”

Aren't these all problems we know how to fix? This is not to say radically improving rural economies is easy, but improving "connectedness" either physically or digitally, and improving people's educational status, are concrete actions that can be taken. Of course there is no suggestion of investments-real investments not "Promise Zone" nonsense which is just moving things around- in the area to help the people improve their own selves, instead the suggested solution is to . . . move to North Dakota.
As has been often pointed out, North Dakota has a very low population, and the idea that simply moving people there will solve real problems is a joke. Is this really what's passing for policy these days?
What a Difference Fifty Years Make
written by Last Mover, June 27, 2014 8:17
Fifty years ago, President Lyndon B. Johnson declared his “war on poverty” from a doorstep in the tiny Kentucky town of Inez, and since then, Washington has directed trillions of dollars to such communities in the form of cash assistance, food stamps, Medicaid and tax incentives for development. (In some places, these transfer payments make up half of all income.) Still, after adjusting for inflation, median income was higher in Clay County in 1979 than it is now, even though the American economy has more than doubled in size.

Fifty years ago the economic predators did not own outright the economy and the political system that enables it like they do today.

Fifty years ago the war on poverty was waged under the tradtional principle of redistribution. Makers weren't faulted for what they deserved to make, just what they deserved to keep, because they crowded out so many others who did not have that opportunity.

The economic landscape of today is not comparable to fifty years ago. The "makers" in the 1% don't earn much of what they "make". Much of it is "taken" in the form of monopoly economic rent from the 99% that adds no value.

Yet these "makers" are behind the sock puppets who portray the war on poverty as a massive failure, coddling potential makers in hammocks made permanent by out-of-control government spending over the fifty years. It has crowded out and suffocated the private sector from giving the poor real jobs, they claim.

Excuse me, but those jobs and the demand that supported them are gone forever, flat out taken by the very predators who bemoan their disappearance from the "hammock effect" as they peer from inside their own elaborate hammock castles constructed on mountains of subsidies.

This is not the '60s where the big winners were still producing and accepted for the same, with the understanding they didn't need to keep most of what they earned to keep producing. Controlling excess inequality with high tax rates did not suppress output and spending the proceeds on the rest did not produce a "hammock nation".

This is second decade of the 21st century where 99% of Americans are living under some equivalent version of Clay County where the median income in 1979 was higher than it is today.

And the thing is, it didn't start with Johnson's war on poverty which maintained equal opportunity with offsets to unequal outcomes. It started after that with a war on equal opportunity itself by economic predators who created the winner-take-all class of the 1%, the .1% and the .01%.
Excellent post, but ...
written by Nat Uerlich, June 27, 2014 9:37
"the public's tax dollar" is a misleading phrase.

The federal government does not spend "tax dollars" ( http://www.youtube.com/watch?v=mCOVldiGeQY ).
Don't bring Social Security into it
written by Dennis, June 27, 2014 11:01
As you have pointed out numerous times in other contexts, we are not "spending" on SS except what was paid into it for that specific purpose.
written by JDM, June 27, 2014 6:06
I think one of the key weaselings is the phrase "and promote development". This suggests they are also counting tax giveaways to huge businesses in their total supposedly spent on the poor.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.