Home Class Politics The Easy Way To Halve, No, Slash, American Poverty

The Easy Way To Halve, No, Slash, American Poverty

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One of the problems with this bright new media landscape is that all too many people are writing about things they have no background, no bottom, in. Adherence to woke tropes and memes up the wazoo but not enough knowledge of the actual subject under discussion.

A useful example being this from Vox. The problem is in not knowing enough about poverty to be able to make the useful little intellectual leap:

Joe Biden just launched the second war on poverty
The first war on poverty cut it in half. Joe Biden could do it again.

Well, actually, that first war on poverty didn’t cut it in half. Not the way the Americans count it that is and that’s the bit that isn’t being noted.

The legislation that grew out of President Lyndon B. Johnson’s declaration had no marquee program. Instead, the war on poverty was a collection of new initiatives that have stood the test of time: Medicare; Medicaid; food stamps (now known as the Supplemental Nutrition Assistance Program); aid for women, infants, and children (WIC); school breakfasts; Pell Grants; Head Start; and Section 8 housing vouchers, to name a few. It was a landmark passel of legislation that reshaped American life in the decades that followed.

The problem being that except for WIC none of those are being counted as reducing poverty.

But poverty didn’t win the war. When two economists tried to construct a more accurate measure of American poverty between 1960 and 2010, they found that Johnson presided over a massive decline in poverty. In 1960, the rate of consumption poverty in the US was 30.8 percent. By 1972, it had declined to 16.4 percent. Johnson’s efforts appeared to be the main lever cutting the poverty rate nearly in half.

Entirely so, it all reduced consumption poverty but it didn’t do all that much for the poverty rate.

This is because of the weird way that the US measures poverty. It is market income plus cash transfers. Further, the poverty line is not a relative one, like over here in Europe. It’s an absolute one. What was a cheap but nutritious food budget for a family of that size in 1962? Triple that – on the grounds that food was about 30% of a household budget at the time – and we’ve out poverty level. Upgrade for inflation since and we’re done. This was only ever meant to be a quick rule of thumb and Mollie Orshansky, the inventor, wasn’t best pleased that it became the one true measure.

After all, a certain relativity is true about poverty. Holding that only those living below the poverty level of 1863 as being poor would clearly not be true of today. More than this though is that problem of only market income plus cash transfers. For the reason that only the WIC is recorded as reducing poverty by the usual measure is because that’s the only cash transfer there. The others are goods and services in kind or through the tax system – neither of which are counted.

Those non-cash methods of poverty alleviation are also the major ones in use. The American poverty line is thus, really, a measure of who would be in poverty before government help, not who is after it. That’s also why the poverty line measure and the consumption one give such wildly disparate results. The official estimation has 20% of American children below the poverty line. The consumption measure perhaps 2%.

This poses a problem. For it says that the easiest way of halving – nay, slashing – American poverty is simply to abolish the entire welfare system send everyone who needs one a check instead. The cash gets recorded as reducing poverty and therefore poverty is reduced, more, for the same spending.

This also causes a problem for the proposed manner to use now:

The Biden child allowance converts the existing child tax credit into a near-universal benefit of up to $3,600 annually for kids 5 and younger and $3,000 annually for those ages 6 to 17, a portion of which will be paid out monthly from July through December. The expanded credit is not only more generous

It’s a tax credit, it doesn’t reduce poverty…..

Lesser-known provisions also largely benefit the poor: huge expansions of Obamacare subsidies (so uninsured people in non-Medicaid-expansion states can better afford insurance on the marketplace), expanded food stamp benefits, emergency rental assistance and expanded Section 8 housing vouchers, an expanded child and dependent care credit, and aid to help shore up states’ welfare programs.

All goods and services in kind – they don’t reduce poverty….

During her presidential bid, Harris touted a plan called the LIFT the Middle Class Act. The LIFT Act would expand the EITC by adding a new benefit for low-income people who work, which phases in dollar for dollar.

Through the tax system, it doesn’t reduce poverty…..

This is all well known so why is it that the cheerleaders for these policies don’t say so? Because to do so would be to insist that there’s less poverty around that needs alleviating. They’re stuck in a cleft stick here.

OK, so let’s agree that goods and services in kind, that aid through the tax system, reduce poverty. Cool, they do, obviously. So, let’s measure how much poverty there is after the goods and services in kind, after the tax credits, there is that still needs alleviating. Which means that child poverty is some 2.5% of all children.

Ah, d’ye see the problem? How can we have a gargantuan societal campaign against, war upon, something that we’ve pretty much already solved? And then where would be the justification for taxing the rich, for employing The Swamp?

A site that takes as its mission to explain the news – as Vox does – might want to do a little more work on explaining perhaps….

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3 COMMENTS

  1. Why are people like Harris so obsessed with helping the middle classes – they don’t need any help, it’s the poor that need help.

    I know they like and will advocate and implement policies that benefit the middle classes, ‘cos they’re benefiting themselves and their pals. But there’s no need to be so blatant about it as to actually physically put it in your campaigning.

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