The War On Poverty

I like Thomas Sowell’s economics. Personal initiative, effort, and just plain hard work are important characteristics associated with his economic system. However, sometimes I don’t agree with him. In the “Vision of the Anointed” (1995) Sowell stated, “Among the many other questions raised by the nebulous concept of greed is why it is a term applied almost exclusively to those who want to earn more money or to keep what they have already earned – never to those wanting to take other people’s money in taxes or to those wishing to live on the largress dispensed from such taxation. No amout of taxation is ever described by the anointed as greed on the part of government or the clientele of the government.” There are words in this quote that I agree with and some I don’t.

Why is greed applied mostly to the rich? Historically I think it appropriate. Even Warren Buffet recognizes that some people just cannot live on $500 million, or so they think. Therefore, I disagree with Sowell’s point here. However, I also think it is just as bad to apply greed to all people rich. I know many well off people that give away millions of dollars to people who need a hand up, not a hand out.

I do agree with Sowell when he ponders why the government is not seen as greedy. The government has never taken a dollar that it doesn’t spend and then some. So I agree with him there. However, I also disagree because there are those marginalized folks that just don’t have the same opportunities as those who live in the more affluent areas of our nation.

In this age of growing economic inequity we as a society must recognize we are our brother’s keeper. As such we need to figure out a way to help those that are trapped in poverty to “move from dependency to self-sufficiency.” The question is how do we do this?

The first question needed to be asked, is our current actions working? According to the New York Times there are currently 14.3 percent of American living in poverty. This equates to about 46 million people. The Federal government operates around 122 different antipoverty programs “ranging from Medicaid to the tiny Even Start Program for Indian Tribes and Tribal Organizations.” According to Gary McDonald this number is 126 programs. He also reports that these programs, along with state run programs, are spending $1 trillion dollars per year. Yet no matter how much we pay for these programs there doesn’t seem to be any change. The number of people locked into an impoverished life style is stagnant.

I do agree with Paul Weyrich, a conservative activist, when he says that “poverty is the Achilles heel of capitalism,” however just because it is a weakness doesn’t mean we through the baby out with the bathwater. We deal with it. Let me give you an example of how this is happening. I had a recent graduate come visit me yesterday. He is now working at Fritolay. He has done well for himself, but he told me that the company feels very strongly about Corporate Social Responsibility. He said he was surprised at how ingrained it was within the workforce and company culture. Thus, just because poverty is the weakness of a system, donesn’t mean we can’t use the system to mitigate the weakness.

Nobody disagrees with the importance of a safety net to help those who need a hand up. However, what are we getting for the $1 trillion we are currently paying? If we divide $1 trillion by 46 million, we get the number $21,700 per person. For a family of four that is about $87,000. That value is well above the poverty line. Giving a family locked in poverty this amount of money may not seem practical, but would it be more effective than what we are doing now?

If the current system is inefficient, then what do we do? I am a huge proponent of social entrepreneurship. Therefore, I think we need more entrepreneurial activities that help people move from dependency to self-sufficiency. The government can provide opportunities to fund those businesses that are training people stuck in poverty to work in the new environment.

I think another important part of the puzzle is not punishing those who work harder to get ahead. The current social net takes support away when a person makes too much money. Subsequently the person, or family, suffers because they have gone above a threshold. The system needs to award those that want to improve themselves. Figuring out a process that allows a hand up to get to the next level is critical. Work needs to pay enough to live on and save.

I do think whatever we do, we need to focus on creating a system that provides equal opportunity. The conservatives always say that people stuck in poverty just don’t want to work. I totally disagree with them on this. The system is skewed to one side of the social spectrum. We need to ensure that the economic system awards all who work hard and take innitiave, we do not need a system that forces equal outcomes.

I do agree with those who think government programs are hugely inefficient. These programs should be looked at as a system and redesigned for effectiveness and efficiency. But even more important, results should be measured. The government should be held accountable for how they transform its inputs, tax dollars, into results. And if its not getting what we think it should produce then we need to adjust the system.

Those who think that we need to shut down the safety net are wrong. Those who think the safety net should focus on handouts are wrong. Usually the truth lies somewhere in the middle, and this situation is no different. We have some smart people in this country. It is time to think outside the box.

And this is my thought for the day!


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