President Johnson declared a “war on poverty” back in 1964 when the poverty rate was 19 percent. In the 48 years since, we’ve spent over 12 trillion tax dollars fighting poverty. The rate dipped below 11 percent in 1973, but is now back up over 15 percent. Forty-six million Americans are in poverty today. A new report from the Cato Institute, The American Welfare State, concluded that “clearly we have been doing something wrong.”
This year Cato finds that the federal government will spend more than $668 billion on at least 126 different programs to fight poverty. State and local governments will spend an additional $284 billion. So, we’re spending nearly $1 trillion every year to fight poverty. That amounts to $20,610 for every poor person in America, or $82,440 for a family of four.
Yet, the government considers a family of four to be poor if its cash income falls below $23,050, which is less than one-third the amount taxpayers are spending to help them. Where does all that money go?
The solution seems simple. Instead of spending a trillion dollars every year fighting poverty, why not just cut checks to the poor and be done with it? We could raise every poor person out of poverty and still return hundreds of billions of dollars back to the taxpayers. And if we hurry, it could all be done by Thanksgiving.
Steve Buckstein is founder and Senior Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.