Poverty in America

I was listening to the opening segment of Dave Ramsey’s radio program this morning when I heard him describe some criticism he has been receiving. These critics claim Ramsey is a fraud, hates poor people and is a tool of the “moneyed” people, whatever that is.

Their position is that capitalism is the root of the country’s ills, that capitalism purposely keeps people in poverty so that “moneyed” people can control everything. It was reminiscent of the union and socialist talking points that I’ve seen over the years.

My observations over the last forty plus years as an adult is contrary to those talking points. The Poverty Line didn’t exist when I was growing up. That was a creation of Lyndon Johnson’s War on Poverty. Since that time, the government has spent trillions, yes that’s right, trillions with a T, on poverty and it still exists in higher levels than before.

Why is this so?

To a very large extent, in my opinion, it is cultural. The history of this country, until the middle of the 20th Century, was based on entrepreneurship. People worked to acquire assets and capital that was, in turn, used to bootstrap a business, an enterprise, a homestead, a dream that lead to prosperity and increased wealth. Many, many were successful. Just look at the winners of the 19th and 20th centuries. They were, are numerous.

Many also failed.

Some, who chose to be homesteader, failed due to disease and weather. The drought and subsequent dust storms of the 1930s is one example. The blizzards covering the northern prairie states in the late 19th century ruined ranches large and small.

Some of those who failed, tried again and succeeded. The farmers who lost their farms in the Dust Bowl, migrated to California and other states and were known as “Okies,” migrant workers moving from one agricultural job to another.

Others, quit. With FDR’s New Deal, some realized they didn’t have to support themselves, others, the government, would do that and that realization was the beginning of America’s welfare state, a  shift in American Culture which fed today’s welfare state.

But, even today, those in poverty need not remain there. The tools exist to allow anyone, with sufficient motivation, to rise out of poverty and to succeed. The obvious tool is education. When I was young and in school, we were taught basics: reading and comprehension, writing and grammar including composition—writing clearly, arithmetic and math, history, geography and natural sciences. But most of all, we were taught how to teach ourselves.

As bad as our current education policies are, it is still possible for an individual to rise above their economic level and succeed—but now without work and personal investment. That is where our dependency culture is failing us.

When I was in school, we had a number of students whose parents were on “relief.” I personally knew some of them. I played with their children, visited them at their home, rode the same bus to school, I knew them and their entire family intimately. The differences between their families and mine were unbelievable to one who had not known both of us.

My family was average for that time and place. My father worked as a coal miner and part-time farmer (I did more farm work when in school than did he), my mother was an elementary school teach as was my older married sister. We also owned a small farm and raised most of our food. We weren’t rich, nor had a lot of money, but we did have something else—a desire to succeed. I was raised in that culture.

The other family was raised in a different culture. My school friends never took school work home. Their parents, outside of a small garden, had no income other than relief payments from the government. When their allotment of relief ended, they would find some job and keep it long enough to qualify for relief once again. It was a cyclic existence. If their children brought school work home, it was destroyed or if the parent found any school textbooks, those text books were sold for whatever value could be received. Their culture determined that education was a hindrance to life—on relief…welfare as we call it now.

That dependency culture has grown over the decades. It need not continue. The tools to fight it still exists—education, learning how to learn, teaching oneself new skills, skills that can lead to a job, the basis of economic freedom. The path is there.

How does this work? Basically, get a job. Acquire, through education, self-education, work, skills that youj will be paid a wage or salary for exercising those skills. Learn more skills, gain expertise, and find a better paying job, or create a new business with those skills. Then, as your business grows, with your hard work and enterprise, you hire employees who have skills you need. The cycle continues.

The critics scoff at this idea. “All the wealth is controlled by a few! No one new can join them.” That is the basis of Keynesian Economics: wealth cannot be created nor destroyed.” Wealth must be controlled for the betterment of all. Wealth must be taken from those who have it, and given to those who do not.

Later versions of Keynesian Theory were based on the Zero-sum game theory. Nothing, wealth, can be added nor removed from a system, just manipulated internally. Poverty is created because the wealthy have acquired all the wealth—a view of economics is easily refuted.

In the 19th and early 20th Century, our currency was based on gold and silver standards. Gold backed the currency. On the face of each bill was the statement, “Redeemable in gold/silver.” Our currency was not Federal Reserve notes, backed by the federal government, but Silver and Gold Certificates redeemable by the appropriate metal. If you didn’t have sufficient gold, or silver, you mined more. Wealth, actual wealth in silver and gold in this case, grew. The economy grew, people gained jobs, saved, and created new jobs. Poverty was diminished.

We no longer have a currency based on gold or silver. Our economy has outgrown the available quantities of gold and silver. We do have a currency based on work. We have the tools available to anyone with the will to use them. Poverty will not cease in America due to the dependency culture. But, we need not feed that culture. Poverty is not a lack of money, wealth, it is a cultural affliction.

Those who are mired in it, can escape. All it takes is the will to do so, and by doing so, escape the trap of dependency created by progressive, socialistic economic thought and policies.

 

Tidbits

The saga of the Casa Crucis siding project continues.  Last Friday, there was an issue with the scaffolding around the house.  The decision by the crew was to replace it with a different style.  The front of Casa Crucis is not a flat, smooth wall like the north and south sides.  Down came the scaffolding and today a new one is to be erected.

There is snow and freezing rain forecasted for overnight with 1″-2″ accumulation. I’m glad I’m not working outside.

***

I was surfin’ over the weekend and came across this article.  I’m not at all surprised at the results of the poll.

Gallup: Gingrich Leads Romney by 20 Points Among Conservatives; Romney Leads Gingrich by 10 Among Liberals, Moderates

December 15, 2011
(CNSNews.com) – Former House Speaker Newt Gingrich of Georgia is leading former Massachusetts Gov. Mitt Romney in the Republican presidential race by 20 points—41 percent to 21 percent–among self-professed conservatives, according to a new Gallup poll released Thursday.
By contrast, Romney is leading Gingrich by 10 points—27 percent to 17 percent—among self-professed liberals and moderates in the poll.
The poll, conducted Dec. 5-11, surveyed 1,665 Republicans and Republican-leaning independents who are registered voters. Among all poll respondents, Gingrich led Romney 33 percent to 23 percent, with Rep. Ron Paul of Texas at 9 percent, Rep. Michele Bachmann of Minnesota at 6 percent, and Texas Gov. Rick Perry at 6 percent.
Gingrich led among most sub-groups in the poll—except for self-professed liberals and moderates, those 18 to 34 years of age, and those living in the East.
Among the Republican-leaning independents, Gingrich and Romney were tied at 23 percent, with Paul at 14 percent.
Among the Republicans, Gingrich had 38 percent, Romney had 23 percent, and Paul had 7 percent.

Among the conservatives, Gingrich had 41 percent, Romney 21 percent, and Paul had 7 percent.
Among the liberals and moderates, Romney had 27 percent, Gingrich had 17 percent, and Paul had 13 percent.
You can find the complete article with more poll data here.
I’m not at all surprised that liberal and “moderates” prefer Romney.  After all, he’s one of them.
***
Want to help make sure your children aren’t growing up in poverty?  Get, and stay, married.  According to a Heritage Foundation study, being in a stable, married household has a much, much better probability of staying out of poverty.  In the study, single parents were compared against married families and their income levels.  This study compared single parent white, black and hispanic families with their married counterparts using census data from 2010.

The married families at or below the poverty level comprised only 4-9% of the population.  The single parent groups varied from 40% and up.

 
Interesting, is it not?

***

The Missouri budget is projected to be several hundred million dollars in the red this fiscal year according to forecasts.  Democrat Governor Jay Nixon has a plan. He wants to “barrow” money from the state’s universities and repay the “loan” over a seven year period at zero percent interest.

Why am I concerned about this plan.  He wants to take money from the universities’ reserve funds, money they earned through various enterprises, from alumni donations and other income sources, keep it for seven years and then give it back with no interest.  The result, since there is no compensation for inflation is that if the plan worked as stated, the universities would end up with less than they had in the beginning.

It’s the same as theft. 

Nixon considers asking 5 Missouri universities to lend money to state

BY VIRGINIA YOUNG • vyoung@post-dispatch.com > 573-635-6178  

STLtoday.com
Friday, December 16, 2011 8:30 am

JEFFERSON CITY • Gov. Jay Nixon is asking five state universities to consider lending the state more than $100 million next year to help balance the state’s budget, a proposal that is drawing fire from key legislators unhappy with both its secrecy and its impact.
Nixon’s proposal, which his budget director termed preliminary, calls for the University of Missouri to chip in $63 million and four other schools to come up with lesser amounts, for a total of $107 million. The money would come from their reserve funds.
The state would roll the money into the $850 million higher education budget that covers operating expenses at all of Missouri’s four-year institutions and community colleges. The goal: to avoid a cut that could otherwise equal at least 13 percent across the board.
Universities making the interest-free loans would look to be repaid over a seven-year period with money diverted from the state’s college loan authority, known as the Missouri Higher Education Loan Authority, or MOHELA.

In addition, Nixon proposes cutting the schools scholarship funds in half and telling the universities to make up the difference out of their remaining reserve funds. As you can expect, the legislature is not pleased.

House Budget Committee Chairman Ryan Silvey, R-Kansas City, called the plan ridiculous. “The governor is looking for this scheme that avoids making tough decisions on cuts,” he said. “Rather than balance the state’s budget, he wants to dream up new revenue sources which happen to be interest-free loans from our universities.”
Senate Appropriations Committee Chairman Kurt Schaefer, R-Columbia, said the universities would have no guarantee that they would get their money back.
“If the proposal is a Bernie Madoff-type Ponzi scheme to make it look like something’s being funded that isn’t really being funded, that’s not acceptable,” Schaefer said.

Ah yes, your democrat pols at work.  If they can’t tax and spend, they’ll just steal money…and spend.  Cutting all that spending in the first place isn’t an option for them.

 
When your revenue projections are undercut by reality, sane people cut their spending to match their income.  Government, on the other hand, can’t imagine spending less.  They prefer to come up with schemes to get around our state’s balanced budget requirement.
 
Tax and spend. Steal and spend. The only difference is semantics.

Culture of Poverty

Social theories come and go.  Theoretically, those proved false are the ones to go, but not when it contradicts the agenda of the liberals in academia. Social liberals have long said that poverty creates dysfunction. That it is poverty that destroys families and creates the need for welfare.

They are wrong.  Dysfunction, personal, familial, and cultural, causes poverty and drives the welfare state.  It’s a positive feed-back loop.  The more the welfare state grows, the more dysfunction that is created that causes more poverty and needs more welfare that…well, you know where this is going.

I’m not alone. The Heritage Foundation agrees.
    

‘Culture of Poverty’ Makes a Comeback reads the headline from this past Sunday’s New York Times. Patricia Cohen goes on to report: “[I]n the overwhelmingly liberal ranks of academic sociology and anthropology the word ‘culture’ became a live grenade, and the idea that attitudes and behavior patterns kept people poor was shunned. Now, after decades of silence, these scholars are speaking openly about you-know-what, conceding that culture and persistent poverty are enmeshed.”

At first, this may seem like the left is finally ready to make a major concession to reality about their decades-long War on Poverty. But a closer reading of Cohen’s source materials, a recent symposium on poverty in The Annals of the American Academy of Political and Social Science, shows the opposite is true. The left is just as clueless about poverty as it has ever been. Heritage Foundation Senior Research Fellow in Domestic Policy Studies Robert Rector writes at National Review Online:

One might imagine that experts researching the “culture of poverty” would examine how marital collapse, eroded work ethic, and indifference to academic study contribute to financial poverty. Guess again.

Instead, editors of The Annals firmly declare that the main cause of poverty is “material deprivation itself.” In other words, the cause of poverty is poverty: The cure for poverty is to artificially boost the incomes of the poor through welfare payments, free food, housing, medical care, and so on.

This is nothing new. Liberals always have insisted that poverty causes dysfunctional behaviors rather than vice versa. But, if having a low income caused problem behaviors (such as illegitimate births and eroded work ethic), then most Americans in the 19th and early 20th centuries (whose incomes were far lower than those of today’s poor) should have been drowning in dysfunctional behaviors. Of course, they were not.

As Rector has amply documented before, the left’s continued blindness to the cultural underpinnings of poverty have undermined civil society and bloated our federal budget. Since 1964, the U.S. has spent $15.9 trillion on means-tested welfare programs. After adjusting for inflation, welfare spending is 13 times higher today than it was in 1965. Welfare spending has grown more rapidly than Social Security, Medicare, education, and defense. And what do we have to show for these efforts? According to the Census Bureau, a record high 3.7 million Americans fell into poverty in 2009. The out-of-wedlock birthrate is now 40% and the African American out-of-wedlock birthrate is 72%. When the War on Poverty began the out-of-wedlock birthrate was just 7%.

The collapse of marriage is the root cause of child poverty in the U.S. today . It is far past time to reboot our poverty programs to promote work and encourage marriage in order to control costs and promote greater self-reliance. Among Rector’s recommendations:

  • Slowing the growth of the welfare state: Congress needs to establish reasonable fiscal constraints within the welfare system. Once the current recession ends, aggregate welfare spending should be rolled back to pre-recession levels. After this rollback has been completed, the growth of welfare spending should be capped at the rate of inflation.
  • Promoting personal responsibility and work: Able-bodied welfare recipients should be required to work or to prepare for work as a condition of receiving aid. Food stamps and housing assistance, two of the largest programs for the needy, should be aligned with the TANF program to require able-bodied adults to work or to prepare for work for a minimum of 30 hours per week.
  • Ending the welfare marriage penalty and encouraging marriage in low-income communities: Current means-tested welfare programs penalize low-income recipients who get married; these anti-marriage penalties should be reduced or eliminated.

During the administration of President Bill Clinton, conservatives successfully reformed one welfare program in the 1990s: replacing the old Aid to Families with Dependent Children (AFDC) with the new Temporary Assistance to Needy Families (TANF). But President Barack Obama’s failed economic stimulus gutted those reforms. And his budget proposal would spend $10.3 trillion on means-tested welfare over the next decade. Before the current rise in poverty, that was enough to give $250,000 to each person currently living in poverty in the U.S., or $1 million for a poor family of four. Our nation can’t afford another 10 years of failed War on Poverty thinking.

The Welfare State and entitlements are destroying this country from within.  It’s time to stop.