Government

“70% of Americans use Medicaid or SNAP at one point in their lives” 😳 Say what?

Safety nets are and should be just that. They are not intended to be a way of life nor are they able to lift anyone out of poverty, but instead enable them to exist in poverty.

Rep. Ryan’s report vastly understates the success of the War on Poverty. The report points out that the official poverty rate has declined just a small percentage—from 17.3 percent in 1965 to 15 percent in 2012—suggesting that the poverty rate has changed very little since the start of the War on Poverty. But the official poverty rate measures income before taxes and does not include capital gains or noncash benefits such as public housing, Medicaid, and SNAP benefits.

As a result, families who benefit from tax measures, such as the EITC, or income supports, such as SNAP, appear to be no better off than families who are not enrolled in these programs. In other words, the report makes a claim on the effectiveness of federal anti-poverty policies using a measure of poverty that explicitly ignores the impact of those same policies.

An analysis by the Council of Economic Advisers shows that when safety net programs are taken into account, the poverty rate actually fell from 26 percent in 1967 to 16 percent in 2012—a reduction of more than one-third. This is important because it demonstrates that the safety net succeeds in raising people out of poverty, not trapping them in poverty. Source: americanprogress.org

It could have dire consequences for the social safety net—and for the 70 percent of us who will turn to a means-tested program like Medicaid or the Supplemental Nutrition Assistance Program (SNAP) at some point in our lives. And it could impact millions who expect to rely later in life on Medicare and Social Security. Source: talkpoverty.org

What about when safety net programs are not taken into account?

So, I am uneducated and barely employable, I am unmarried with several children, I am married and have been poor all my life and my wife and I have several children, but we are no longer “poor” because we have housing subsidies, SNAP, childcare and school meals; Medicaid and CHIP❓

The fact is I am still uneducated and still can never get a good paying job, I have no understanding of economics or finances and cannot impart much hope to my children. THE SAFETY NETS HAVE NOT RAISED ME OUT OF POVERTY, they have enabled me to barely survive in it. I feel trapped because as far as I can see, I am trapped.

Or, I am a high school or college graduate. I had a good job and supported my family, but I have fallen in hard times. Maybe I lost my job or I became disabled. Perhaps my wife became ill and I needed to care for her. Safety nets saved my family during these times. That’s what they are supposed to do and when these times passed, I got back to work and again took care of my family … because I have the tools, skills and drive to do so.

The thinking expressed above by americanprogress.org represents the great divide in America. It expresses a point of view that dependence on government and hence on a declining number of other tax-paying citizens is somehow a good thing. It’s not.

While the government has helped keep poverty at bay, the economy by itself has failed to improve the lives of the very poor over the past 50 years. Without taking into account the role of government policy, more Americans — 29 percent — would be in poverty today, compared with 27 percent in 1967. Source: The Washington Post December 2013

30.2% of American households earn less than $35,000 a year. The federal poverty level for a family of four is $24,600 and Medicaid eligibility is $33,948. Where is the real economic or individual progress for these Americans?

Safety nets are essential to be sure, but like any safety device they are to be used only as needed in time of crisis, not for years. And if you don’t have the skills and tools to make a permanent change in your life, you will likely always be very low income if not poor. If your philosophy is that more dependence on government reduces poverty, then we have no chance of actually lifting people from poverty … because we don’t understand how to.

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2 replies »

  1. Maybe the solution to the fight against poverty is to lower the expectation of what poverty is and the standard of living required not to be in “poverty”. According to a report by http://www.heritage.org the typical American poor household, as defined by the government, has a car and air conditioning, two color televisions, cable or satellite TV, a DVD player, and a VCR. Now I admit that internet access might be important in order to do government and other business today like a telephone once was but two TVs?

    There are 23 counties that have a population with average annual income of less than $1500 (data from 2103). Now, I am not saying Americans should be living in grass huts, but Americans do have access to clean water and other government support services. We need to fix the definition of what poverty really is and apply our resources to address that. The other social safety net services are useful to prevent people from falling permanently into poverty from short term setbacks such as illness or job loss but to claim that people need to be on welfare year after year when they are subsidized with housing, food, medical to the tune of more that of a family making $35k is wrong.

    There will always be a portion of the US population that due to mental illness or substance abuse will always be homeless but their conditions cause their poverty and solution must address their demons. They are in a different situation and are not a result of the lack of education, job skills or opportunity.

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  2. Your post states: “… While the government has helped keep poverty at bay, the economy by itself has failed to improve the lives of the very poor over the past 50 years. Without taking into account the role of government policy, more Americans — 29 percent — would be in poverty today, compared with 27 percent in 1967. Source: The Washington Post December 2013 …”

    I’m sorry, let me a couple of facts.

    See: http://www.heritage.org/poverty-and-inequality/report/the-war-poverty-after-50-years

    ” … (Since declaring the war on poverty), U.S. taxpayers have spent over $22 trillion on anti-poverty programs (in constant 2012 dollars). Adjusted for inflation, this spending (which does not include Social Security or Medicare) is three times the cost of all military wars in U.S. history since the American Revolution. this straight. …”

    The poverty rate was already declining substantially when the government declared war on poverty in 1964 (compared to rates in the late 1940’s).

    See: https://www.census.gov/library/publications/2017/demo/p60-259.html

    “… Between 2015 and 2016, the poverty rate for children under age 18 declined from 19.7 to 18.0 percent. The poverty rate for adults aged 18-64 declined from 12.4 to 11.6 percent. The poverty rate for adults aged 65 and older was 9.3 percent in 2016, not statistically different from the rate in 2015. …”

    29%, 27%????? Assuming her data is somehow true, it would mean that the dramatic decline in poverty among elderly Americans as a result of Social Security and Medicare (not counted in the $22 Trillion shown above), has been all but offset by increased in poverty elsewhere.

    But, the Census Bureau data don’t confirm her comments. Similarly, her arguments about economic activity are all correct, assuming that behavior would be exactly the same without these government subsidies. Unfortunately for her, when reviewing the 1996 change in welfare, the data confirm that people DO change their behavior.

    See: https://www.acf.hhs.gov/sites/default/files/opre/consequences_of_welfare_reform.pdf

    The following key findings emerge from our synthesis of the research literature:
    • Over a dozen econometric studies have attempted to estimate the effects of welfare reform taken as a whole, and all but a few report that reform had substantial effects on reducing the (welfare) caseload. …
    • Most of the reforms that were introduced in the 1990’s had positive effects on employment
    and earnings. Thus, it seems likely that welfare reform is responsible for a portion of the
    increase in work and earnings among single mothers during the last decade. …
    • There is little information available about the effects of welfare reform on the use of other
    government programs….
    • The evidence from both experimental and econometric studies is insufficient to draw any
    firm conclusions about the effects of welfare reform on marriage or fertility. Evidence from
    the Minnesota Family Investment Program (MFIP) suggests that providing generous
    financial work incentives, either alone or with work requirements, may increase marriage or
    keep existing marriages intact. …
    • Some welfare reform components can raise incomes and reduce poverty, although this
    result is not associated with all policy components and there is reason to believe that some
    of the initially favorable effects will not persist over time. Generous financial work
    incentives—high earned income disregards inside the welfare system or earnings
    supplements outside the welfare system—generate the strongest income gains and antipoverty
    effects. …
    • There is evidence of both positive and negative effects on child well-being of various
    components of welfare reform. Positive and negative effects were observed for indicators
    that capture socio-emotional behavior, academic performance, and health. The most
    favorable effects are associated with financial work incentives, most likely because of the
    increase in family income that results from combining work and welfare. But even for these
    programs, there is some evidence of unfavorable impacts for some subgroups of
    participants, particularly for adolescent children and for younger children of parents who
    do not experience large income gains. Work requirements do not appear to have strong
    impacts on children, either favorable or unfavorable, although again there is evidence of
    unfavorable impacts for adolescents, especially in school performance.

    See: https://fns-prod.azureedge.net/sites/default/files/pd/34SNAPmonthly.pdf

    Finally, as we saw during the Obama Administration, loosening the rules made more people eligible and we saw dramatic increases in SNAP and other program usage. As of July 7, 2017 42.6 million Americans were receiving SNAP benefits during the current fiscal year, down from 44.2 million in 2016. The 2017 figure is the lowest since 2010, when 40.3 million people were on food stamps. The number peaked in 2013, at 47.6 million.

    Seems like we should make another attempt at welfare reform, based on what we have learned –
    expand eligibility you get more dependency, reduce eligibility (with work incentives), you get less.

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