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Study: More Than Half a Trillion Dollars Spent on Welfare But Poverty Levels Unaffected
CNS ^ | June 25, 2012 | Matt Cover

Posted on 06/25/2012 12:01:45 PM PDT by Hunton Peck

“The vast majority of current programs are focused on making poverty more comfortable … rather than giving people the tools that will help them escape poverty.”

( – The federal government is not making much headway reducing poverty despite spending hundreds of billions of dollars, according to a study by the libertarian Cato Institute.

Despite an unprecedented increase in federal anti-poverty spending, the national poverty rate has not declined, the study finds.

“[S]ince President Obama took office [in January 2009], federal welfare spending has increased by 41 percent, more than $193 billion per year,” the study says.

Federal welfare spending in fiscal year 2011 totaled $668 billion, spread out over 126 programs, while the poverty rate that remains high at 15.1 percent, roughly where it was in 1965, when President Johnson declared a federal War on Poverty.

In 1966, the first year after Johnson declared war on poverty, the national poverty rate was 14.7 percent, according to Census Bureau figures. Over time, the poverty rate has fluctuated in a narrow range between 11 and 15 percent, only falling into the 11 percent range for a few years in the late 1970’s.

The federal poverty rate is the percentage of the population below the federal poverty threshold, which varies based on family size.

While the study concedes that some of the increased spending under Obama is a result of the recession and the counter-cyclical nature of anti-poverty programs, it also finds that some of the increase is deliberate, with the government having expanded eligibility for welfare programs.

In fiscal year 2008, anti-poverty spending was $475 billion. In fiscal year 2009, when Obama took office, it had risen to $590 billion.

“But the dramat­ically larger increase also suggests that part of the program’s growth is due to conscious policy choices by this administration to ease eligibility rules and expand caseloads,” the Cato report says. “For example, income limits for eligibility have risen twice as fast as inflation since 2007 and are now roughly 10 percent higher than they were when Obama took office.”

In fact, the study points out that according to the administration’s own projections, federal welfare spending is unlikely to decline even after the economy recovers – further evidence that not all of the increase in spending is recession-related.

“All this spending has not bought an ap­preciable reduction in poverty,” the study says. “[T]he poverty rate has remained relatively constant since 1965, despite rising welfare spending.”

The study counts as a welfare program any federal program that is means-tested and provides some kind of cash or in-kind benefit. Means-tested programs are federal programs that only make benefits available to people at or below a certain income level. In-kind benefits are things like healthcare, housing, or other non-cash benefits that are given in lieu of money.

Included in this expanded definition of welfare spending are traditional welfare programs such as food stamps and cash welfare benefits, as well as in-kind, means tested programs like Medicaid, energy assistance grants for low-income people, and the refundable portions of the Earned Income Tax Credit.

The study faults the way poverty programs are designed, saying that the increase in spending and largely unchanged poverty rate showed that the issue is not a matter of money, but a matter of what the programs aim to achieve.

“The vast majority of current programs are focused on making poverty more comfortable – giv­ing poor people more food, better shelter, health care, and so forth – rather than giving people the tools that will help them escape poverty.”

Instead, the study recommends refocusing anti-poverty efforts on keeping people in school, discouraging out-of-wedlock births, and encouraging people to get a job – even if that job is a low-wage one.

“It would make sense therefore to shift our anti-poverty efforts from government programs that simply provide money or goods and services to those who are living in poverty to efforts to create the condi­tions and incentives that will make it eas­ier for people to escape poverty.

TOPICS: Business/Economy; Culture/Society; Front Page News; Government
KEYWORDS: debt; ebt; freecheese; lbj; poverty; rkselection; trillion; waronpoverty; welfare
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As the old joke goes, LBJ declared war on poverty, and poverty won.

But the greatest toll of government welfare is not the money spent, but what it does to the spirit of those who become dependent on it, including the bureaucrats who administer it.

1 posted on 06/25/2012 12:01:51 PM PDT by Hunton Peck
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To: Hunton Peck

I read somewhere back in the nineties that European poverty levels had remained the same even after 60 years of socialism...................

2 posted on 06/25/2012 12:09:29 PM PDT by Red Badger (Think logically. Act normally.................)
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To: Hunton Peck
Look what the federal government did for Native Americans. They took a group of hearty subsistence cultures and turned them into victims of the government handout in just a few generations. Why would the inner city poor be any different. Substitute housing projects for reservations and it is basically the same.

I'm not sure it is possible to completely rid a human of the satisfaction of a hard day's work, but the government is trying its best. All of this to build a permanent constituency of Democrat voters.

3 posted on 06/25/2012 12:09:37 PM PDT by USNBandit (sarcasm engaged at all times)
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To: Hunton Peck

Poverty is only a state of mind.

4 posted on 06/25/2012 12:11:18 PM PDT by PGR88
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To: USNBandit

Just keep increasing the spending till the next 5 generations owe 100% of their labor to pay it off.

Once we’re all completely ruined the poor won’t Feel so impoverished because everyone will have the same life full of poverty.

5 posted on 06/25/2012 12:19:35 PM PDT by To-Whose-Benefit? (It is Error alone which needs the support of Government. The Truth can stand by itself.)
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To: Hunton Peck

What tools do you think the govt should or could provide that they do not already?

6 posted on 06/25/2012 12:23:43 PM PDT by stuartcr ("When silence speaks, it speaks only to those that have already decided what they want to hear.")
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To: stuartcr

Your premise is flawed.

7 posted on 06/25/2012 12:32:38 PM PDT by Hunton Peck (The patient is bleeding to death! Apply more leeches!)
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To: Hunton Peck ain’t about “poverty” ...its about the “poverty industry” .....which is about as useful and productive as the “green energy” industry...and the “global warming scam industry”

The flim-flam “war on poverty” was one of the first and most successful of the scam industries. It inspired a lot of wanna-be knockoffs leading to a Federal gov’mt that is increasingly less Federal and governed.

8 posted on 06/25/2012 12:55:09 PM PDT by mo (If you understand, no explanation is needed. If you don't understand, no explanation is possible.)
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To: To-Whose-Benefit?

“You can have power over people as long as you don’t take everything away from them. But when you’ve robbed a man of everything, he’s no longer in you power.”

Aleksandr Solzhenitsyn

I don’t think it will take 5 generations... not the way we’re being robbed right now

9 posted on 06/25/2012 1:01:24 PM PDT by SMARTY ("The man who has no inner-life is a slave to his surroundings. "Henri Frederic Amiel)
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No, it won’t take us another actual 5 generations of continuing like this.

What I meant was once we’ve already sold out the next 5 generations, which at the current rate ought to be sometime around next tuesday.

10 posted on 06/25/2012 1:05:31 PM PDT by To-Whose-Benefit? (It is Error alone which needs the support of Government. The Truth can stand by itself.)
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To: Hunton Peck

“LBJ declared war on poverty, and poverty won”

Government also has declared war on drugs and failed pretty miserably at that as well. Unless it is handicapped by politicians, our military does a pretty impressive job of fighting wars: our government, not so much. Think about the things that people complain about most these days: education, health care and government. Is it any coincidence that government is integrally involved in all three?

11 posted on 06/25/2012 1:08:14 PM PDT by DrC
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To: Hunton Peck

because throwing money at “poverty” only sustains it.

12 posted on 06/25/2012 1:09:35 PM PDT by hecht (restore Hetch-Hetchy, and screw San Francisco)
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To: Hunton Peck
More Than Half a Trillion Dollars Spent on Welfare But Poverty Levels Unaffected

Duuuuh, ya think that might be because there's no incentive to get off welfare?

13 posted on 06/25/2012 1:29:58 PM PDT by bgill
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To: Hunton Peck
As of early 2011, 15% of people lived in a household that received food stamps, 26% had someone enrolled in Medicaid and 2% had a member receiving unemployment benefits. The Census data show that 16% of the population lives in a household where at least one member receives Social Security and 15% receive or live with someone who gets Medicare. There is likely a lot of overlap.

During February 2010, 1 in 8 Americans were enrolled for food stamps, an increase of 260,000. Since reaching 31.78 million in December 2008, enrollment in Supplemental Nutrition Assistance Program (SNAP) has set a record each month. USDA estimates enrollment for fiscal year 2010, which ends Sept 30, is expected to average 40.5 million people, at a cost of up to $59 billion. Average enrollment for fiscal 2011 is predicted to be 43.3 million people. Reuters, “Food-stamp tally nears 40 million, sets record,” May 7, 2010

The USDA dedicated $5 million in 2011 to “improve access to and increase participation in the Supplemental Nutrition Assistance Program [SNAP] .”

The Congressional Budget Office said Thursday that 45 million people in 2011 received SNAP benefits, a 70% increase from 2007. The CBO projected that one in seven U.S. residents received food stamps last year.

2012. Around 5.3 percent of the population between the ages of 25 and 64 is currently collecting federal disability payments, a jump from 4.5 percent since the economy slid into a recession. Mental-illness claims, in particular, are surging. During the recent economic boom, only 33 percent of applicants were claiming mental illness, but that figure has jumped to 43 percent, says Rutledge, citing preliminary results from his latest research. NY. Post., Jobless disability claims soar to record $200B as of January, February 19, 2012,

In just the first four months of 2012, 539,000 joined the disability rolls and more than 725,000 put in applications. As a result, by April there were a total of 10.8 million people on disability, [SSI and SSDI?] according to Social Security Administration data, a 53% increase from a decade ago, after accounting for all those who've left the program (about 700,000 drop out each year, mainly because they reached retirement age or died). Also see

A record 5.4 million workers and their dependents have signed up to collect federal disability checks since President Obama took office, according to the latest official government data, as discouraged workers increasingly give up looking for jobs and take advantage of the federal program. From June 2009, the number of new enrollees to Social Security’s disability insurance [SSDI, financed with Social Security taxes paid] program is twice the job growth figure. ^

SSDI now accounts for more than 16% of Social Security's budget and more than 15% of Medicare's (SSDI enrollees can qualify for Medicare after two years.) ^

The amount of money the federal government hands out in direct payments increased 32% during first three years of Mr. Obama's Presidency.

In 1988, there were 4.46 million SSI [Supplemental Security Income, financed through general revenues from taxes, meaning benefits are not based on your prior work history] recipients, 6 million in 1993 and in 2011 there were 8 million.;

The top 10 States with the highest percentage of non-poor residents of each state signed up for government assistance were Vermont, Mississippi, Maine, New York, Massachusetts, Alaska, Rhode Island, Hawaii, Connecticut, Arkansas.

Much more

14 posted on 06/25/2012 1:45:48 PM PDT by daniel1212 (Come to the Lord Jesus as a damned+morally destitute sinner,+trust Him to save you, then live 4 Him)
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To: Hunton Peck
“The vast majority of current programs are focused on making poverty more comfortable … rather than giving people the tools that will help them escape poverty.”

The way to treat poverty is to raise the level of average real wage rates by increasing the productivity of labor. This is done by increasing the division of labor, by capital accumulation, and by technological progress.Government intervention in the economy inhibits the institutions of capitalism which leads to inhibition of all three.

15 posted on 06/25/2012 2:01:13 PM PDT by mjp ((pro-{God, reality, reason, egoism, individualism, natural rights, limited government, capitalism}))
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To: PGR88


Save for a small percentage of true charity cases, it’s a matter of will.

Money is not value. Value is not money. Neither are durable.
“He who does not work, neither shall he eat.”

One must produce more value (wealth) than he consumes. If not, poverty ensues.
Money is just a convenient token representing value; acquiring it without trading for value produced does not end poverty, it just forestalls it - while that money gets routed back to those who do create value.

I can make a hamburger and sell it for $1.
Needing food and lacking $1, the gov’t could give you a dollar.
You give me the dollar, I give you the burger, I’m $1 richer, you’re satiated for a couple hours.
This doesn’t help your situation. A couple hours later, you’re hungry again and don’t have a dollar.
The feds could declare war on the problem, print a lot of dollars, even take a lot of dollars from me, but the problem remains. So long as I create things with inherent value, I’ll attract money; so long as you don’t, you won’t. Lots of currency gets injected into the system, existing currency gets devalued, producers get annoyed, and the non-producers remain poor.
Go figure.

16 posted on 06/25/2012 2:27:57 PM PDT by ctdonath2 ($1 meals:
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To: mo

After Katrina residents of the area were given $2,000 gubment money cards. One guy came back to an area shelter with a flat screen TV (about the full two grand back then). “Whete you gonna put that??”

The poor you will have with you always.

17 posted on 06/25/2012 2:28:24 PM PDT by TigerClaws (He)
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To: stuartcr

What the government taxes it gets less of. What the government subsidizes it gets more of. We need to quit subsidizing poverty and start taxing it.

18 posted on 06/25/2012 2:32:06 PM PDT by csmusaret (I will give Obama credit for one thing- he is living proof that familiarity breeds contempt.)
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To: csmusaret

So weary of this. Just beyond weary.

Stop these programs. Tomorrow. Not one more dime. No more checks, no more, no more.

It would fix itself in a hurry, one way or another. Baby daddies would have to move back in with the baby mamas ...sort of like the rest of us, you know? Or they’d have to face the consequences.

We need to allow consequences, or responsibility. Nothing in between.

19 posted on 06/25/2012 3:04:04 PM PDT by LibsRJerks
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To: Hunton Peck
feeding them and housing them so they can breed like RATS has had the desired effect... MORE RAT VOTERS!!!
20 posted on 06/25/2012 3:12:16 PM PDT by Chode (American Hedonist - *DTOM* -ww- NO Pity for the LAZY)
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