Poverty in the U.S. Was Plummeting—Until Lyndon Johnson Declared War On ItYet again, government intervention hurts those it is intended to help.
Tuesday, October 16, 2018
Daniel J. Mitchell
One of the more elementary observations about economics is that a nation’s prosperity is determined in part by the quantity and quality of labor and capital. These “factors of production†are combined to generate national income.
I frequently grouse that punitive tax policies discourage capital. There’s less incentive to invest, after all, if the government imposes extra layers of tax on income that is saved and invested.
Bad tax laws also discourage labor. High marginal tax rates penalize people for being productive, and this can be especially counterproductive for entrepreneurship and innovation.
Still, we shouldn’t overlook how government discourages low-income people from being productively employed. But the problem is more on the spending side of the fiscal equation.
The Welfare State's Effect on the PoorIn Thursday's Wall Street Journal, John Early and Phil Gramm share some depressing numbers about growing dependency in the United States:
During the 20 years before the War on Poverty was funded, the portion of the nation living in poverty had dropped to 14.7% from 32.1%. Since 1966, the first year with a significant increase in antipoverty spending, the poverty rate reported by the Census Bureau has been virtually unchanged…Transfers targeted to low-income families increased in real dollars from an average of $3,070 per person in 1965 to $34,093 in 2016…Transfers now constitute 84.2% of the disposable income of the poorest quintile of American households and 57.8% of the disposable income of lower-middle-income households. These payments also make up 27.5% of America’s total disposable income...
https://fee.org/articles/poverty-in-the-us-was-plummeting-until-lyndon-johnson-declared-war-on-it/?fbclid=IwAR03SCnXKl9jNnmBzum1hS_I50OxEaGlwCfZPpzvL0ck2ATof5ZILqZ7LmI