Sunday, September 21, 2014

The War on Poverty Has Been a Colossal Flop
...Since its beginning, U.S. taxpayers have spent $22 trillion on Johnson’s War on Poverty (in constant 2012 dollars). Adjusting for inflation, that’s three times more than was spent on all military wars since the American Revolution.

One third of the U.S. population received aid from at least one welfare program at an average cost of $9,000 per recipient in 2013.

The federal government currently runs more than 80 means-tested welfare programs. These programs provide cash, food, housing and medical care to low-income Americans. Federal and state spending on these programs last year was $943 billion. (These figures do not include Social Security, Medicare, or Unemployment Insurance.)

Over 100 million people, about one third of the U.S. population, received aid from at least one welfare program at an average cost of $9,000 per recipient in 2013. If converted into cash, current means-tested spending is five times the amount needed to eliminate all poverty in the U.S....

...How is this possible? How can the taxpayers spend $22 trillion on welfare while poverty gets worse?

The typical family that Census identifies as poor has air conditioning, cable or satellite TV, and a computer in its home.

The answer is it isn’t possible. Census counts a family as poor if its income falls below specified thresholds. But in counting family “income,” Census ignores nearly the entire $943 billion welfare state....

America's new class system
...Once a state where the middle class reigned supreme, the apotheosis of the American Dream, California now has the wealth distribution — and, in some disturbing ways, the political underpinnings — of a Third World country. In Silicon Valley, a group of super-wealthy tech oligarchs live lives of almost unimaginable wealth, while only a few miles away, illegal immigrants live in squalor.

The oligarchs feel free, and even entitled, to choose the direction of society in the name of a greater good, but somehow their policies seem mostly to make the oligarchs richer and more powerful....

...The oligarchs are assisted in their control by what Kotkin calls the "clerisy" class — an amalgam of academics, media and government employees who play the role that medieval clergy once played in legitimizing the powerful, and in implementing their policies while quelling resistance from the masses. The clerisy isn't as rich as the oligarchs, but it does pretty well for itself and is compensated in part by status, its positions allowing even its lower-paid members to feel superior to the hoi polloi.

Because it doesn't have to work in competitive industries, the clerisy favors regulations, land-use rules and environmental restrictions that make things worse for businesses — especially the small "yeoman" businesses that traditionally sustained much of the middle class — thus further hollowing out the middle of the income distribution. But the lower classes, sustained by government handouts and by rhetoric from the clerisy, provide enough votes to keep the machine running, at least for a while....