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Fixing America’s lost “War on Poverty”

July 23, 2012

America is losing its “War on Poverty”, and the situation is rapidly reaching the crisis stage.

The Great Recession has increased unemployment and put more pressure on poverty programs while — at the same time — putting more pressure on government tax revenues.

So, the need for a safety net is increasing but governments — after years of reckless spending and making more people dependent on government handouts — aren’t equipped to handle it.

Could this be the time to revisit the War on Poverty and consider new approaches to

  • reduce dependency
  • provide incentives for individual initiative, and
  • provide a sustainable safety net for the truly needy?

According to a Cato Institute study, America’s federal and state governments spend nearly $1 trillion every year to fight poverty. That amounts to $20,610 for every poor person in America, or $61,830 per poor family of three.

But of course the poor don’t actually receive the money.  Much of it is chewed up by bureaucracy (126 separate and often overlapping federal anti-poverty programs) or given to people above the poverty level.

Could a brilliantly simple negative income tax — as envisioned by the late libertarian economist Milton Friedman — be an idea whose time has finally come?  Chapter 33 of Fixing America’s Broken Politics — — illustrates how it could work.

Your comments are welcome at the bottom of Chapter 33.  Please also click on “Follow” (near the top left corner of the book’s blog) to follow the discussion.

From → Poverty

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