Saturday, June 10, 2017

A Trillion Dollars

We've spent that much on LBJ's war on poverty, or maybe more.*  When Johnson was president, the national poverty rate was about 23% (Census Bureau figures).   It's about 13.5% now, but more people are in poverty because of our population growth.  We've fluctuated between 10% and 15% for fifty years.

We've spent a lot on the war.  How did we do? Our effort centered around four pieces of legislation:
• The Social Security Amendments of 1965, which created Medicare, Medicaid, and Social Security benefits for retirees, widows, and the disabled, financed by an increase in the payroll tax cap and rates.
• The Food Stamp Act of 1964, which made food assistance, at the time only a pilot program, permanent.
• The Economic Opportunity Act of 1964, which established the Job Corps, the VISTA program, the federal work-study program and a number of other initiatives. It also established the Office of Economic Opportunity (OEO), the arm of the White House responsible for implementing the war on poverty and which created the Head Start program.
Household wealth distribution; household income figures are similar.
• The Elementary and Secondary Education Act, signed into law in 1965, which established the Title I program subsidizing school districts with a large share of impoverished students, among other provisions. ESEA has since been reauthorized, most recently in the No Child Left Behind Act.

Actually, it worked, but did it work well?  
Many do find their way out of poverty each year, and many enter.  Common detrimental circumstances are a change in head of household, job loss, unexpected health-care costs, and the decline in value of wages over the years.  
The intent of our war was to help folks rise out of poverty to self-sufficiency.  Was there any downside to our efforts?  Do the programs need to be reviewed and regularly refined.  Yes, certainly.  We're the world's wealthiest nation, yet more than 20% of our children still live in poverty.  

Impediments to progress:  
  • Businesses count on public assistance for their low-paid employees. Walmart, as an example, costs the community around $1 million per year for each super-center because of their labor practices and low wages. Referred to as 'corporate welfare' by many, the company depends on federal assistance for their employees; it's part of a common business model.  
  • According to a study by the Center for Economic and Policy Research (CEPR), the federal minimum wage would be $21.72 per hour if it had kept pace with increases in productivity since 1968. Those productivity increases have raised incomes for the wealthy alone, not for the workforce.
  • Wages for the lower 80% have stagnated or declined.  The minimum wage is worth 20% less than it was fifty years ago.
  • Real college costs are up 800% since 1965 when a summer at minimum wage would pay for it.  At $1.44 trillion, student loans now exceed auto loans and credit card debt.
  • Health-care costs have risen similarly, more in our country than others.  As costs increase without commensurate gains in income, families fall down the ladder.
  Imagine the opportunities available to the wealthiest quintile compared to the rest.  Imagine the differences in education and employment available to those same groups.  Our hope is to make it at least fair, to open doors for everyone.

   Everyone needs a hand.  I was particularly impressed by one wealthy fellow.  He has spent $11 million so far.  Harris Rosen, the Orlando-based founder of Rosen Resorts and Hotels, adopted a Florida neighborhood called Tangelo Park, cut the crime rate in half, and increased the high school graduation rate from 25 per cent to nearly 100 per cent.  He did it by helping, by providing needed daycare, and funding scholarships for high school graduates.
A successful businessman, he's done well for his own family and for others.  He has funded teachers and preschools, tutoring projects, and much more.  Helping others is part of his lifestyle.

     Imagine how different it might be if every Wall Street player and billionaire CEO understood such things.  And perhaps the rest of us, too.

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*Estimates for the war's cost vary, depending on your methods, up to fifteen trillion (Paul Ryan), and more.  Opponents include in the total the outlays of Social Security and Medicare (for which we pay) as though it was the 'government's money' being spent.   Retirees and others receiving Social Security are described as receiving 'welfare benefits'.  Do your own detailed inquiry.

See Apples and Oranges for another look.

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