Thursday, September 8, 2011

Defining and Eradicating Poverty in America

What does impoverished mean?

One half of the world's population lives on less than $2 per day, while we currently define the poverty line in the U.S. as a family of four with less than $22,350 in annual income. For certain, poverty is a relative thing, and since America is a rich country, we define poverty differently than other countries. Being poor here isn't the same thing as being poor elsewhere.

That said, if we can choose, don't choose poor, even in America. Here's what old time entertainer Sophie Tucker once said, "I've been rich and I've been poor. Rich is better." Now that we've established our clear priorities, let's return to our discussion of poverty.

Notable & Quotable references a Census Bureau finding that 43 million Americans, or one of seven persons, are defined as poor. It then asks the question, "But what is poverty in America today?" The article then recounts all the things the typical American poor person is likely to own. Two color TVs, an Xbox or PlayStation, computers, microwaves and so forth are among the items commonly found. So what?

Owning two color TVs, air conditioning, microwaves and such is not a bad thing. But not helping people escape poverty by enabling their governmental dependence is a bad thing. We should stop it now.

Here's my point. It would be a good thing to incentivize learning and increase education of the poor by introducing educational vouchers. And it would be a good thing to encourage good health practices and personal responsibility by introducing appropriate incentives in the health field as well. Why do we need to pass everything through an expensive and paternalistic government "intermediary" that takes a "commission" for its efforts? If people need money, let's get it to them directly instead of passing it through a government agency or series of agencies. Save the money paid to the government intermediaries and give it to the poor instead.

Approximately 44 million people receive food stamps. Millions of the poor attend public schools, receive meals, child care assistance, after school programs and free transportation, too. Many also are eligible for housing assistance, child care and such. Why not just give them money directly, and let them decide how to spend it? My bet is that it would mostly represent money well spent.

Individual choice is always preferable to bureaucratic mandate. Besides, learning occurs through choice and experiencing the consequences of those choices. Similarly, "learned helplessness" and a corresponding lack of personal responsibility for one's actions are often the result of being in a state of government dependence. We don't help people become self-reliant and better decision makers by encouraging them to be dependent on government and its many separate inward focused bureaucracies.

LBJ's Great Society initiated welfare programs of the 1960s, albeit well intentioned, have been in existence now for approximately fifty years. They have failed and failed badly. Sadly, the law of unintended consequences has worked again. So it's time to try something new in our war on poverty. Give people the money directly, and let them choose what to do with it.

All people, including poor and rich alike, will choose to "maximize their own utility" or well-being, when given a chance to do so. We each have our own preferences as to what makes us "happy", fulfilled or otherwise satisfied. The unfettered freedom to choose and act on our own is an indispensable part of that "utility" effort. Thus, if proper incentives replaced the government's intermediary function, my strong conviction is that those we define as the poor would act more responsibly and enjoy life more fully. As a result, the general welfare of our society would prosper anew.

The harsh truth is that weak economies make poor people even poorer. They are hurt the most when times are tough. And times are tough. Still, self reliance, like learned helplessness, is very much a learned behavior.

We should help people help themselves by direct aid as opposed to using intermediaries in the form of commissioned government bureaucrats. It would cost less and we'd end up with more citizen taxpayers making good decisions on behalf of themselves and their families.

Thanks. Bob.

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