The War on Poverty – $40 Trillion Funding Failure Rather than Facebook or FUBU or Ford

By 32 Comments 2,983 views

Last year the United States celebrated the 50th anniversary of the War on Poverty begun by LBJ in 1964. Over that time the country has spent approximately $40 trillion on welfare and redistribution programs of one sort or another – and that number doesn’t include expenditures for Social Security or Medicare. The program started out slow, but has steadily picked up steam so that today the United States spends over a trillion dollars on welfare programs every year. To put that $1 trillion in perspective, that is more than the GDP of every country on the planet except for the 15 largest. It’s bigger than the GDP of Sweden, Saudi Arabia, Indonesia, Turkey, the Netherlands and around 175 others.

That’s a lot of money, but it must be worth it as the War on Poverty must have been a success… right? Not so much. Today poverty in the United States stands at approximately 15% of the population. Fifteen percent sounds relatively low, except when compared to the 18% rate it was $40 trillion dollars ago. After $40 trillion dollars and 50 years, the War on Poverty has reduced poverty by a staggering 3 percentage points!  What’s worse, the War on Poverty actually stopped the progress that was already occurring:  During the 15 years prior to the beginning of the War on Poverty, the poverty rate in the United States had dropped from 30% to 15%!

Indeed, the single biggest accomplishment of the War on Poverty seems to have been the proliferation of single parent households… i.e. children born out of wedlock. In 1964 the percentage of American children born to unwed mothers was approximately 4%… so out of every 20 babies born, only 1 was born to an unwed mother. Today 8 out of every 20 babies born in the United States is born to an unwed mother. And according to studies by HHS and others, that’s largely because the welfare state has made such as choice feasible: Holding constant a wide range of variables, including income, education, and urban vs. suburban setting, the study found that a 50 percent increase in the value of AFDC and foodstamp payments led to a 43 percent increase in the number of out-of-wedlock births.

And the proliferation of unwed motherhood has resulted in a dramatic increase in crime, violent crime in particular. According to the Atlantic Magazine: “The relationship [between single-parent families and crime] is so strong that controlling for family configuration erases the relationship between race and crime and between low income and crime. This conclusion shows up time and again in the literature.” In 1965 there were 20 violent crimes for every 1000 Americans. By 2013 that number was 37. That doubling might not sound bad, until you realize that the incarceration rate in the US tripled over that same period, which means that as a percentage of the population there are three times as many Americans incarcerated today as there were when the War on Poverty began, but with many more criminals locked up the violent crime rate has still doubled.

So almost $1 trillion a year of welfare spending for half a century has basically made a small decrease in the poverty rate, pushed unwed motherhood through the stratosphere and dramatically increased the violent crime rate and prison population in the country. That sounds like a typical government success story.

Now let’s compare that to what a trillion dollars in one year might look like were in the private sector. Below are fifteen companies whose combined North American revenue was $1 trillion last year: Amazon, Apple, Coke, Disney, ExxonMobil, Facebook, Ford, General Electric, Google, J&J, JP Morgan, McDonalds, Microsoft, Nike, Walmart.

So these companies with a combined $1 billion in revenue, what have they accomplished? Simply put, they have changed the world. Walmart has almost single handedly changed American retailing and driven inflation down everyone. Amazon redefined retail even further. Microsoft and Apple essentially created the computer revolution. McDonalds feeds the entire US population once a month. Facebook has connected a billion people around the world. Disney has entertained generations, ExxonMobil has fueled their journeys and Ford has built their cars and trucks.

Not only do these companies employ millions of people directly, but indirectly via their suppliers they drive the employment of tens of millions of others. So with a trillion dollars in revenue – money that was willingly exchanged for products and services – these companies have directly or indirectly generated an income for tens of millions of Americans who in turn support millions more family members. And they accomplished all of that while providing material benefits to the country as a whole.

One has to wonder what might have become of poverty had the $40 trillion the government siphoned out of the pockets of hard working Americans over the last half century had been left in their pockets. How many more of those children born to a single mother might have been born into a two parent household, gotten an education and gone on to start the next Disney or FUBU or UBER? How many more Spanx or Harpo Productions or Mary Kay Cosmetics were never founded because single mothers were sitting at home waiting for a welfare check rather than coming up with some revolutionary entrepreneurial moonshot? How many Under Armours or Facebooks or Chipotles never got founded because children grew up in poverty with no positive male role models around to help guide them? How much poverty would have been eliminated had each year’s trillion dollars gone into financing new startups rather than creating a dependency ecosystem?

At the end of the day the War on Poverty has been nothing short of a disaster. Not only has it sucked $40 trillion out of the hands of American workers and entrepreneurs, but it has also created an environment where tragic of circumstances have become the norm for tens of millions of Americans. More crime, more broken families and more broken dreams are the outcome of a half century of government failure. The tragedy is that this abject failure took place during one of the most economically dynamic periods in American history, and as a result of another failed government policy tens of millions of Americans found themselves stuck in the quicksand of government dependency and never had much of a shot at pursuing the American dream and seeing what potential greatness they might have brought to the world.

The product of a military family, growing up in Naples, Italy and Guantanamo Bay, Cuba, and being stationed in Germany for two years while in the Army, Vince spent half of his first quarter century seeing the US from outside of its own borders. That perspective, along with a French wife and two decades as a struggling entrepreneur have only fueled an appreciation for freedom and the fundamental greatness of the gifts our forefathers left us.

32 Responses to “The War on Poverty – $40 Trillion Funding Failure Rather than Facebook or FUBU or Ford”

  1. 26

    Greg

    @retire05:

    As usual, you’re full of crap. The top marginal rate of 28% was in effect for 1988, 1989 and 1990.

    Actually, I’m correct. The final year of the Reagan administration was 1988. George H. W. Bush was sworn in as President in January, 1989.

    The 28 percent rate applied through only one year of the Reagan administration, 1988.

  2. 27

    Bill

    @Greg:

    This from the side that ridiculed Michelle Obama’s Let’s Move initiative to address America’s childhood obesity epidemic?

    Who was critical of the initiative? It was the execution that was a failure.

    I also seem to recall all but 17 House Republicans voting against the Healthy, Hunger-Free Kids Act of 2010, which has resulted in much healthier elementary school lunches for a generation of American children.

    Much healthier, but all but inedible. Kids were throwing the food away rather than eat the crap. So, in your opinion, healthy food (paid for by taxpayers) in the garbage is better than less-healthy fare in the stomach? Typical liberal viewpoint; eat what I tell you to eat, or eat nothing at all.

    First, liberal policy failures keeps people in poverty, then liberal policies provide inedible crap to eat, then liberal policies prevents those they have relegated to perpetual poverty to stavation unless they hold their noses and eat the inedible food (which, by the way, Michelle does not exactly imbibe in). Meanwhile, sports are frowned upon, Boy Scouts (camping, hiking, execise) is banned unless it meets the political correctness standards and even going to a park unless parents can accompany is now forbidden, having been made potentially deadly by liberal policies promoting poverty and crime. See the problem with this scenario?

  3. 28

    retire05

    @Greg:

    Nope. I’m correct. The final year of the Reagan administration was 1988. George H. W. Bush was sworn in as President in January, 1989.

    Wrong. The 1989 tax rates were set by Congress in 1988, when Reagan was still in office.

    Give it up, Gullible Greggie. You’re not smart enough to debate anyone. You’re just a useful idiot and a mouthpiece for the Democrats.

  4. 29

    retire05

    @Bill:

    See the problem with this scenario?

    No, Gullible Greggie doesn’t see the obvious. He is only capable of being a parrot for the left wing taking heads. That’s why he is so familiar with sites like Mother Jones. If an original thought ever enters Gullible Greggie’s head, it is subject to explode.

  5. 30

    Greg

    Wrong. The 1989 tax rates were set by Congress in 1988, when Reagan was still in office.

    Yet you’ll argue ’til the cows come home that the Status of Forces Agreement troop withdrawal timetable, finalized by the GWB administration during it’s final months, is entirely the fault of the administration that followed it, not of the administration that actually did it. You seem to apply whatever rules are to your liking at the moment in assigning credit or blame.

    In any case, what I said, verbatim, was this:

    “The 28 percent rate applied through only one year of the Reagan administration, 1988.”

    That’s a totally accurate statement. Your response was not, and I’ll not waste any more of my time arguing about it.

  6. 31

    retire05

    @Greg:

    Yet you’ll argue ’til the cows come home that the Status of Forces Agreement troop withdrawal timetable, finalized by the GWB administration during it’s final months, is entirely the fault of the administration that followed it. You seem to apply whatever rules are to your liking at the moment in assigning credit or blame.

    Hey, dumass, you’re trying to argue apples and oranges. The Congress passed the 1989 tax rates. It was law. The SOFA was subject to being renegotiated, except you have already admitted that Obama was too inept to do any renegotiations. The SOFA was NOT law. It was an agreement between two nations that did, in fact, change with the entry of new leadership in both the U.S. and Iraq. Those, who, unlike you, were actually on the ground in Iraq at the time of discussions on the SOFA have already said that Obama was not interested in changing it. He wanted us out of Iraq, no matter the cost that he was warned about. We have now seen that cost come to fruition.

    As I have told you before, I feel sorry for you, Gullible Greggie. You have been so indoctrinated by your leftist handlers you are no longer capable of even hinting at the truth. You are a marionette, a joke, a useful idiot who dances to the tune of your progressive handlers. How sad.

  7. 32

    Aqua

    @Greg:

    I’m not so much in favor of “buying down poverty” as I am of dealing directly with the reality that 1 out of 5 children isn’t getting enough to eat in a nation where oblivious fat cats whine about high-end tax rates that are presently lower than they were when Ronald Reagan was in office.

    Taxes aren’t the problem Greg, they usually ever are. The problem is the federal government and the huge waste involved with having all the power consolidated in one location. They either need to block grant most of the money back to the States or lower taxes and allow the States to increase revenue for the problems.
    Here is the governments latest Waste Report. $294 Billion just on expired government programs. Even liberals can say “that’s just a drop in the bucket.”

    http://www.mccain.senate.gov/public/_cache/files/47c2a7c2-832f-4d35-91e9-bdddb5c819f6/americas-most-wasted-report.pdf

Leave a Reply

Your email address will not be published. Required fields are marked *