July 17, 2023

Recently the Supreme Court put an end to Joe Biden’s efforts to give erstwhile college students almost a trillion dollars in “debt relief,” although the Biden administration is trying again. That’s a lot of money… But that’s actually a tiny fraction of the money the government has wasted on redistribution, aka social programs, over the last six decades.

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Next year, the United States will commemorate the 60th anniversary of the War on Poverty, which President Lyndon B. Johnson initiated in 1964. The War’s programs initially started on a modest scale but have expanded almost parabolically since. By the War’s 50th anniversary, the government had spent more than $22 trillion on various welfare and redistribution programs.

A decade later, it spends $1 trillion a year on said programs, not including various “targeted” expenditures under Social Security or Medicare, which make the true total simply unknowable. To put that in perspective, $1 trillion is greater than the GDP of 194 of the world’s 213 countries.

Is this massive expenditure justified by the results of the War on Poverty? Initially, one might suggest the results say yes. As of 2021, poverty in the United States hovered at approximately 11.6%, down from the approximately 18% rate in 1964 when the War on Poverty began. That’s a reduction of 6.6% or almost one-third.

Image by Vince Coyner.

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A closer look, however, reveals that this 6.6% reduction after an expenditure of $30 trillion seems underwhelming, to say the least. To see the full picture of the failed War on Poverty one need only look at the poverty rate over the 15 years before this War began.

In 1949, the poverty rate in the United States stood at 34%, which was fully one-third of the nation’s population. Over the next 15 years, without significant government redistribution programs—indeed, without a War on Poverty—the poverty rate fell almost by half, dropping from 34% to 18%, a reduction of a full 16 percentage points.

So, without government spending significant money, poverty fell by 16% in a period of 15 years, or 1.08% per year. But with the government spending more than $30 trillion over the next 55 years, poverty fell by a total of just 6.4% or .12% per year! That means that, without government intervention, the poverty rate was falling 10 times faster than it did once government programs kicked in.

And that 11.6% itself deserves a closer look. In 2014, when the War on Poverty turned 50, the American poverty rate was still at 15%. That means that, after spending $20 trillion over the previous half-century, the government had successfully reduced poverty by a mere 3%.

When Barack Obama entered the White House in 2008, the poverty rate stood at 12.5%. It jumped up to 15% for four years before dropping back to 12.5% by the end of his presidency, which is where it stood when Donald Trump took the White House.

A mere three years later, Trump’s economic renaissance had reduced poverty by 2%, bringing it to its lowest level in history—10.5%, before the Covid scam derailed the prosperity engine. To put that in perspective, Donald Trump’s economy brought poverty down by 2% in 3 years, fully half as much as the government spending did in 50 years after spending $30 trillion!