Authored by Tyler Turman via theAmerican Institute for Economic Research,
President John F. Kennedyonce said,“We must find ways of returning far more of our dependent people to independence.”
President Lyndon B. Johnson sought to meet that challenge by launching theWar on Povertyin 1964, insisting that its purpose was not to make people “dependent on the generosity of others,” nor merely to “relieve the symptom of poverty,” but to “cure it and, above all, to prevent it.”
Sixty years and some $20 trillion in welfare spending later, that message appears to have gotten lost. Rather than helping the poor climb out of poverty toward self-reliance, government handouts have instead pulled the ladder away by supplanting work as their primary source of income.
According to January’sCongressional Budget Office(CBO) report, average total income for the poorest householdsnearly doubledfrom 1979 to 2022. Butmost of that increasewas fueled by government wealth transfers.
Cumulative Growth of Income Among Households in the Lowest Quintile of the Income Distribution, by Type of Income. (Congressional Budget Office, using data from the Census Bureau. In 2021 dollars. Shaded areas show recessions.) This is a prior release to the CBO report cited by the author, and includes many temporary COVID-era benefits not reflected in the most recent report.
If the success of America’s social safety net is measured by how much cash the government can dole out, then it’s a testament to the scale and generosity of the welfare state. But that was never the yardstick the architects of the welfare state themselves used when selling their War on Poverty to the public.
Welfare was intended to be a means toward self-sufficiency and independence through work.
Viewed through that lens, the CBO report paints a far more troubling picture: Low-income Americans are receiving an ever-growing share of their financial resources from government transfers instead of work.
In 1979, households in the lowest income quintile earned, on average, about53 percentof their total income from money income—wages, salaries, business income, and other earnings from private-sector work. Means-tested transfers—government cash andin-kind benefitstargeted to low-income households—made up just 26 percent.
Source: ZeroHedge News
