Welfare’s Impact on Culture

Steve Moses,  OSPRI Fellow on Healthcare Policy, produces a newsletter available through the Center for Long Care Reform. All are worth reading but this is appropriate for highlighting today:

The base of the Statue of Liberty says:

“Give me your tired, your poor, your huddled masses yearning to breathe free, the wretched refuse of your teeming shore. Send these, the homeless, tempest-tost to me, I lift my lamp beside the golden door.” Source: WikiAnswers

Out of that “poor” raw material, America built the most prosperous society in the history of the world.

But what does “poor” mean today; what’s happening to our prosperity now; and why?

Those are questions Walter Williams, the John M. Olin Distinguished Professor of Economics at George Mason University, addressed in a June 30 article for the Jewish World Review. Read it here.

First he observes that “poor” isn’t what it used to be. 43% of poor U.S. households own their homes which average 3 BR, 1.5 baths, a garage and porch. 80% have A/C. 2/3 have 2 rooms per person, more space than the average individual living in Paris, London, Vienna, Athens and other cities throughout Europe. 3/4 own a car; almost 1/3 own 2 or more autos. 97% own color TVs and over half own 2 or more. And so on . . . and on.

Next Williams points out that “What’s defined as poverty is misleading in another way. Official poverty measures count just family’s cash income. It ignores additional sources of support such as the earned-income tax credit, which is a cash rebate to low-income workers; it ignores Medicaid, housing allowances, food stamps and other federal and local government subsidies to the poor.” In fact, according to one study “reported purchases by the poorest fifth of American households were more than twice as high as reported incomes.”

So what are we to make of all this? Williams concludes:

“Yesterday’s material poverty is all but gone. In all too many cases, it has been replaced by a more debilitating kind of poverty — behavioral poverty or poverty of the spirit. This kind of poverty refers to conduct and values that prevent the development of healthy families, work ethic and self-sufficiency. The absence of these values virtually guarantees pathological lifestyles that include: drug and alcohol addiction, crime, violence, incarceration, illegitimacy, single-parent households, dependency and erosion of work ethic. Poverty of the spirit is a direct result of the perverse incentives created by some of our efforts to address material poverty.”

One of the oldest and most fundamental laws of economics is: “You get more of what you subsidize and less of what you tax.” I think Mr. Williams is warning us that we’ve subsidized poverty to the point of meaninglessness while taxing prosperity to the verge of eradication. That’s what has the hackles up of this country’s hard-working, freedom-loving, economically struggling, and gradually diminishing middle class.


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