What's The Best Way To Reduce Poverty?

What is the best way to reduce poverty in America?  Anyone who follows the subject at all will immediately know the answer: the best way to reduce poverty in America is to reduce government "anti-poverty" programs.  If that seems counter-intuitive to you, it can only be because you do not follow the subject at all.  Those who follow the subject know that government "anti-poverty" programs are universally designed and structured to keep the beneficiaries in poverty, because the benefits encourage dependency and discourage work, and also do not count as "income."  Keeping the poverty rate high is the first priority of the "anti-poverty" bureaucracies, who need large numbers of poor people to justify their staffs and their budgets.  Call them the "Welfare Blob."

The public got introduced to this subject by the mid-90s welfare reform enacted by the then-new Republican Congress and President Clinton.  When Congress in 1996 instituted work requirements and time limits for basic welfare, many on the left predicted soaring poverty and disaster for the poor; but instead measured poverty (particularly among the key population of black children) immediately and rapidly declined.  Here is a chart from the Heritage Foundation showing that decline in the late 90s:

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But the Welfare Blob was not so easily vanquished, and immediately went to work to re-establish itself.  Fortunately for them, they had 80 or more government dependency programs to work to expand silently and mostly out of sight from the public.  Here we are 20 or so years after the big welfare reform, and many of those other programs have exploded.  

As Exhibit A for today's lesson, we have what was once known as "Food Stamps," now "SNAP."  In 2000 it had 17 million beneficiaries and a budget of about $17 billion; by 2015 it was 46 million beneficiaries and a budget of over $74 billion.  That's some serious growth!  A big part of the growth came from changes after Obama's election, particularly loosening eligibility requirements and making it so that able-bodied single adults could get on food stamps and stay on them indefinitely without any work requirements.  The Obama administration also made a big push to promote food stamps and get as many people on them as possible.  (I reported on that here.)

Well, now food stamps are in the news, and for a very good reason.  A couple of states -- Kansas and Maine -- decided that they had had enough of indefinite work-free eligibility for able-bodied single adults, and so have reinstituted work requirements and time limits for people in that category.  And the result?  Of course, it is an immediate and dramatic decline not only of the number of program participants, but also in the poverty rate in the affected population.  Kansas started its program reductions in 2013, and now has three years of experience under its belt.  Here are some data from a Report from something called the Foundation for Accountability in Government:

The number of able-bodied adults who are in poverty has dropped significantly as more and more able-bodied adults have found work. Before Kansas’ welfare reforms, just 7 percent of the adults who left food stamps in December 2013 were above the poverty line.  They were not just in marginal poverty, either: nearly 84 percent were in severe poverty, earning less than half of the poverty line.  And even among those who were working, more than 80 percent were in poverty. . . .  Within a year of leaving food stamps, the number of able-bodied adults living in poverty dropped significantly and roughly half of those working climbed out of poverty entirely.  The average income among these working, able-bodied adults was just $6,730 per year prior to Kansas’ reforms.  But within a year of leaving food stamps, average income among workers grew to $13,304 per year.  This means that the average income among those working is now above the poverty line.     

OK, there is some naivete there, particularly failing to give any recognition to the possibility that many of the people may have worked in the illegal and/or underground economy while they were on food stamps.  Still, the results are dramatic.

In Maine, the time limit and work requirement changes came later, December 2014.  So there is only a year of experience, and I have not been able yet to find data on poverty reduction.  However, the number of able-bodied adults without dependents on food stamps experienced an immediate and drastic reduction, from 13,332 in December 2014 to 1,886 in September 2015, according to a Heritage Foundation report here.   A reasonable expectation would be that half or more of the people who lost the food stamp benefits will leave poverty within a year.

Needless to say, the Welfare Blob cannot abide the existential threat to its existence posed by these kinds of changes that reveal that the "anti-poverty" programs actually increase poverty.  In this post back in 2013 I compared the desperate campaigns of the Blob to maintain every last dollar of "anti-poverty" spending to the Brezhnev Doctrine, named after 60s-to-80s-era Soviet superthug Leonid Brezhnev.  The Brezhnev Doctrine held that any nation or territory that once fell within the communist orbit must never exit, the logic being that if anyone could escape then the whole house of cards would be in imminent danger of collapse. 

As the data from Kansas and Maine have started to come out, the Blob has sprung into action.  On April 1 the New York Times ran a big scare article with the title "Thousands Could Lose Food Stamps as States Restore Pre-Recession Requirements."  (Yes, it was April Fools' Day, but I think they were serious.)  The article contains quotes from advocates working for places with names like the Center on Budget and Policy Priorities and the Food Research and Action Center, and using words like "hard hit" and "cruel."  Of course the article does not mention the intentional cruelty of the Welfare Blob of trapping people in poverty in order to maintain jobs and perks for bureaucrats.  

And then we have the op-ed in yesterday's Wall Street Journal from former Treasury Secretary Robert Rubin and Diane Schanzenbach of something called the Hamilton Project, titled "In Defense of Federal Food Aid."  Rubin and Schanzenbach again fail to mention the effect of food stamps of trapping people for years in poverty.  Instead, they turn to perhaps the most fraudulent of all the fraudulent government statistics, the so-called "food insecurity" data, to justify maintaining the bloated current levels of food stamps:

The rate of food insecurity in the U.S. spiked during the Great Recession and it continues to remain unconscionably high in the world’s wealthiest nation. In 2014, according to the Agriculture Department, nearly one in five U.S. households with children—a total of 15.3 million children—were food insecure, which means at some point during the year they lacked adequate food.

Do you think that if Bob Rubin signs his name to something you can trust it?  In fact, this statement is blatantly false.  The government "food insecurity" statistic comes from the answer in a survey to this question:

“We worried whether our food would run out before we got money to buy more.” Was that often, sometimes, or never true for you in the last 12 months?   

"We worried whether our food would run out before we got money to buy more" is obviously not at all the same thing as "we lacked adequate food."  Indeed, the "food insecurity" question has been specifically designed to elicit a positive answer from most or all food stamp recipients (who are likely to "worry" that they might "run out" of food, since the design of the program requires that they manage a budgeted monthly amount) and thus to remain at a high and stable level no matter how much food aid is dispensed and how much money the taxpayers spend on the project.  The Wall Street Journal should be embarrassed that they ran this op-ed.

Meanwhile, the reductions in poverty from the reductions in the food stamp program are a very small piece of the puzzle.  Poverty could be hugely reduced through massive reduction in "anti-poverty" programs across the board, but that is not currently in the works.