Tapsearch Com EditorMore people relying on government assistance
March 3rd 2007 22:14
I've taken way too long to weigh in on this story, and for that I apologize. The Associated Press recently made a big deal out of the fact that a greater number of people are relying on government poverty programs than ever before.
First of all, their definition of "Associated Press analysis":
"About 44 million people - nearly one in six in the country - relied on government services for the poor in 2003, according to the most recent statistics compiled by the Census Bureau. That compares with about 39 million in 1996."
I'm not quite clear on where they got the numbers within the Census Bureau. What's odd to me is that, by this 2004 table, more than 1 in 6 households get means-tested assistance no matter what kind of household you look at. (I stress "no matter what kind" because, for example, in a household of "unrelated individuals" one person could "rely" on the assistance, another not, but in a married couple household if one relies they all do.) I believe this doesn't include the Medicaid payments the article points out is increasing.
But here's the most important thing. Contrary to the article's pronouncement that a decade's worth of policies has aimed to "wean" people off public assistance, the 1996 welfare reform was designed primarily to change the perverted incentives that kept people from working. As Charles Murray showed in Losing Ground, when you pay people who don't work, and then take away the payments when they start working, they tend not to work. Decreasing the welfare rolls, though pointed to as an indicator of success, was a secondary goal.
So the crucial bit of the story -- that working people are increasingly using government aid -- was part of the plan, as a government official in the story points out. Using a system loosely based on Milton Friedman's Negative Income Tax (where you give the poor money, even if they have jobs, and decrease it more slowly than their own earnings increase -- to make sure they have a reason to work and get promoted), the 1996 reform got people into the work force. Even if they still get some government aid, they set examples for their children, keep themselves out of trouble and start the path toward a self-sufficient career.
One thing the "Associated Press analysis" doesn't cover, interestingly -- the Census must not have asked it, and they didn't bother finding this Heritage Foundation graph -- is how much money the U.S. government is dispensing in aid for the poor, as compared to previous years. That has risen as well.
By Robert VerBruggen
First of all, their definition of "Associated Press analysis":
"About 44 million people - nearly one in six in the country - relied on government services for the poor in 2003, according to the most recent statistics compiled by the Census Bureau. That compares with about 39 million in 1996."
I'm not quite clear on where they got the numbers within the Census Bureau. What's odd to me is that, by this 2004 table, more than 1 in 6 households get means-tested assistance no matter what kind of household you look at. (I stress "no matter what kind" because, for example, in a household of "unrelated individuals" one person could "rely" on the assistance, another not, but in a married couple household if one relies they all do.) I believe this doesn't include the Medicaid payments the article points out is increasing.
But here's the most important thing. Contrary to the article's pronouncement that a decade's worth of policies has aimed to "wean" people off public assistance, the 1996 welfare reform was designed primarily to change the perverted incentives that kept people from working. As Charles Murray showed in Losing Ground, when you pay people who don't work, and then take away the payments when they start working, they tend not to work. Decreasing the welfare rolls, though pointed to as an indicator of success, was a secondary goal.
So the crucial bit of the story -- that working people are increasingly using government aid -- was part of the plan, as a government official in the story points out. Using a system loosely based on Milton Friedman's Negative Income Tax (where you give the poor money, even if they have jobs, and decrease it more slowly than their own earnings increase -- to make sure they have a reason to work and get promoted), the 1996 reform got people into the work force. Even if they still get some government aid, they set examples for their children, keep themselves out of trouble and start the path toward a self-sufficient career.
One thing the "Associated Press analysis" doesn't cover, interestingly -- the Census must not have asked it, and they didn't bother finding this Heritage Foundation graph -- is how much money the U.S. government is dispensing in aid for the poor, as compared to previous years. That has risen as well.
By Robert VerBruggen
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