Oct 29, 2015

Thomas Sowell Explains Why The Welfare State Can NEVER Create Prosperity


By on Thursday, October 29, 2015

NY Daily News explains how the only answer to poverty is work:
Today, America spends over $600 billion a year on welfare and poverty-related programs. They do not work. They create, rather than lessen, dependency.
For just $155 billion, we could establish a proven, subsidized employment program in the private sector and Works Progress Administration-type effort that would employ 11 million dependent individuals. These jobs could pay a salary of $20,000, lifting millions of families out of poverty.

Besides the fact that this would save a lot of money, work is the best solution for poverty. I know this because it has been my life’s work.
In 1965, I enlisted in the War on Poverty. A battalion of young, optimistic soldiers began to lay siege to the forces that created what we considered victims of America’s capitalistic system. We were true believers, crusaders for the eradication of need.
At the time, the U.S. poverty rate was 15.2%, with more than 20 million people living below the poverty line.
Fast forward to last year, when the poverty rate was 15.1% and more than 40 million people (including 15 million children) were living in poverty.
From the time I started out, we had spent $19 trillion to end poverty — and had failed even to reduce it.
What went wrong?
For answers, we must look at the two pet strategies for solving the problem: income redistribution and government-run poverty programs. It seems Draconian to oppose giving a financial handout to a person in need. But history has proven handouts simply do not work.
Welfare, which started out as a tiny program to help the widows of miners, became a geyser of cash that created an underclass, mostly of single mothers dependent on the government to survive.
Work was discouraged; having children out of wedlock was no longer frightening, because it meant a check in the mail every month. Dependency and illegitimacy prevailed. Not until 1996, when the welfare laws were overhauled and a time limit was placed on cash assistance, did work become a priority. The welfare rolls dropped by more than 60%.
The conventional wisdom is that those reforms shifted the paradigm once and for all. Not so. Though welfare proved the signal failure of the redistributionist vision, it was only one of the redistribution schemes.
Disability insurance also assists those otherwise without income. In the past 30 years, the number of people on disability has skyrocketed, while medical care has significantly improved. A significant body of research shows that the increase of the disability rolls is in large part due to scamming the system and an easing of eligibility requirements.

According to Nicholas Eberstadt’s “A Nation of Takers ,” in 1960, only 0.65% of the working-age population was receiving disability; that compares with 5.6% today. Additionally, the government has become much more lenient in its definition of “disabled,” making it harder to bar undeserving applicants.
And what of the poverty programs we so bitterly fought for? There is precious little to show for the trillions spent over half a century. Even programs proven to have failed, like job/skill training programs and Head Start — where the Department of Health and Human Services’ own studies show minimal gains for recipients after a year out of the program — continue to garner wide support.
We should have known all along: Work is the optimal solution. Why? Work maximizes a person’s capacity to achieve economic self-reliance. Work socializes people and instills a sense of personal responsibility. Work connects behavior with consequences and permits people to earn the admiration and respect of their spouses and children by supporting them. 

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