Ordinary intelligent and informed Americans and experts disagree about whether, how, or why the United States lost the very well intentioned “War on Poverty”. In 1964, Democratic President Lyndon B. Johnson declared war on poverty and created a much heralded act of law to defeat that scourge on the American economy. Fifty years have elapsed since the act was passed. The poverty rate in 1964 was nineteen percent. We have spent twenty trillion dollars to eradicate poverty, and today (2014) the poverty rate is fifteen percent. Many people—including economists and sociologists–from the left and right agree that the war on poverty has been a failure.
There is very little agreement as to why that gargantuan effort failed: the government did not do enough; the government did not do the right kind of things; there was inadequate education; a population of “pets”—multigenerational dependents—was established; capitalism and the market place were not allowed to prevail; and the very assumptions about causes of poverty were wrong. The conservatives insist that the government does not know how to influence the personal choices people make, but the unrestricted capitalistic market place does.
Almost no one disagrees with the concepts that lack of education and resulting failure to obtain meaningful and economically sustaining work, to build strong families, and to get up and out of poverty ridden ghettos—both urban and rural—lie at the core of the problem of poverty. There is nearly universal disagreement about how to deal with the issues. Keynesians demand that more money and help be poured into the lives of the poor—provide them with decent housing, transportation, and health care. Far right wing conservatives say it is time to make the moochers go out on their own–“I did it, and so can they.” Johnson focused on education—too much, his after-the-fact critics say. The critics would concentrate on creating jobs—meaningful jobs. Poverty is caused by unemployment. The government and private enterprise must provide jobs that provide livable incomes.Somehow.
So, what about jobs? Employers complain that the U.S. workforce is not well enough educated and trained and is unable to keep up with foreign nations with their industrious commitment to serious education. On the other hand, one professor of economics asserts that “…unemployment is caused by the economic system, not the shortcomings of workers.” There is good reason to believe that. Seven people seeking jobs apply for every job available, according to the Bureau of Labor Statistics. The disheartening fact is that only one of those applicants will get the job. There are simply not enough jobs available for people who are willing and able to work. Many of the jobs do not provide benefits such as retirement pensions or health care, or even a full work-week.
Generating a demand for labor has proved to be ephemeral. New-Deal type of federal jobs have been tried during the past three years without the effective creation of new, long-lasting, good paying jobs. That is despite the fact that there is a crying need for work to be done by cities, counties, states, and at the federal level. The American Society of Civil Engineers, for example, has recently estimated that—right now–we need $3.6 trillion in improvements to the U.S. physical infrastructure—building and maintaining roads, building more and better hospitals, schools, parks, sewer and water systems, etc. Factories work below capacity; so the obvious answer is to put more workers in place. Somehow. The questions about how are huge. Should governments pay the wages? Should taxes be radically lowered to provide incentives? Should the minimum wage be raised to the point that lower socioeconomic families can have a decent life? Should the government do the simplest of all things—print more money
The downside of each of those solutions is fairly obvious. If the government pays the wages, taxes have to rise and real income of the people who work to fall. If taxes are radically lowered, the government will not be able to pay its staggering debts—such as the interest on the national debt. If the payroll tax of 6.2% were abolished, everyone would get a 6.2% raise. However, the government cannot function without funding—that might well prove to be something of a problem. If the minimum wage is raised to the level that provides a decent life, companies will simply close their doors, unemployment will rise, and the cycle of poverty will take another downward spiral.
Mind you, there are those who do not see the war on poverty as a failure. The very definition of poverty is a minimal wage level for a family of four. The supporters of the war on poverty point out that both earned income and government assistance should be factors. Such things as food stamps, unemployment insurance, Medicaid, housing support, and health care benefits, if added in, would reduce the poverty rate to somewhere closer to eleven percent. Even the most ardent political conservative would be likely to admit that many individuals and families benefit from such programs as WICK, Head-start, Social Security, Medicare, Job Corps, CHIP, and Child Tax Credit programs. Even the most ardent left-wing political progressive recognizes that none of these programs singularly or in concert have taken enough families out of the poverty cycle long term. Anyone who digs deep enough has to admit that the libertarians have recognized real problems in government sponsored help. There are both philosophical and empirical problems in pursuing that set of solutions. The government has been funding multiple generations of people to remain poor and unproductive. They can earn more from welfare than they can be getting jobs. Massive amounts of money has been spent on the poor, and far too many comfortable middle-class bureaucrats siphon off the taxpayers’ contributions without making a definite or lasting change in the poverty-class of the country. As a result of such opinions and due to a decreasing tax base since 2008, fewer children in poverty get three squares a day, have decent shoes, are provided with day-care so their parents can do minimum wage work; and there is growing despair and sense of hopelessness for them and their families. As one homeless boy said, “You ain’tnuthin’ if you don’t have a home.”
Do I know the answer? No. Am I impressed that the experts—on either side of the question—do? No. Should we just give up and turn a blind eye to the problems and hope for some sort of divine intervention? No. As an American taxpayer, I am open to suggestion.