June 25 2012

Opportunity, Not Government Dependency, Reduces Poverty, Promotes Prosperity

Vicki E. Alger

A recent study from the Cato Institute finds that the federal War on Poverty has failed.

News that the poverty rate has risen to 15.1 percent of Americans, the highest level in nearly a decade, has set off a predictable round of calls for increased government spending on social welfare programs…. In total, the United States spends nearly $1 trillion every year to fight poverty. That amounts to $20,610 for every poor person in America, or $61,830 per poor family of three. Welfare spending increased significantly under President George W. Bush and has exploded under President Barack Obama. In fact, since President Obama took office, federal welfare spending has increased by 41 percent, more than $193 billion per year. Despite this government largess, more than 46 million Americans continue to live in poverty. Despite nearly $15 trillion in total welfare spending since Lyndon Johnson declared war on poverty in 1964, the poverty rate is perilously close to where we began more than 40 years ago.

Clearly we are doing something wrong. Throwing money at the problem has neither reduced poverty nor made the poor self-sufficient. It is time to reevaluate our approach to fighting poverty. We should focus less on making poverty more comfortable and more on creating the prosperity that will get people out of poverty.

Individuals, not government, create prosperity. The proper government role is reducing taxes and bureaucratic red tape so people can start businesses, find and create jobs, innovate, and reach their full potential. If nearly five decades of experience teaches us anything, it’s that dependency on government programs—and the special interest groups that gain political power from them—doesn’t lift people up. It holds them back. 

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