Blessed are the Poor

What ARE implications of the Republican vision of individualism that is at the core of the current Republican campaign for the White House.

Let’s look at government programs to help the poor.

Social Safety Net

The Republican claim is that the social safety net put in place after the Great Depression and expanded by Medicare passed during the Johnson administration and other programs since has exacerbated the problem of poverty in this country rather than reducing it. Florida Senator Marco Rubio summarized that view in a speech at the Reagan Library.

These programs actually weakened us as a people. You see, almost forever, it was institutions in society that assumed the role of taking care of one another. If someone was sick in your family, you took care of them. If a neighbor met misfortune, you took care of them. You saved for your retirement and your future because you had to. We took these things upon ourselves in our communities, our families, and our homes, and our churches and our synagogues. But all that changed when the government began to assume those responsibilities. All of a sudden, for an increasing number of people in our nation, it was no longer necessary to worry about saving for security because that was the government’s job.

This line of reasoning is based on two assumptions.

  1. Social Safety Net money is wasted because it doesn’t reduce poverty and creates a culture of dependency.
  2. The private sector can do a better job than the government in administering these programs, so handing this over the private sector will reduce the costs to taxpayers who can then use that savings to more efficiently help those in need. This will eliminate the culture of dependency.

Let’s look at each claim.

The first one is simple.

Government programs to reduce poverty are working.

The poverty rate among the elderly was 25% before Social Security and Medicare. These programs alone have reduced elderly poverty to 14%. When you include all the other safety net programs, the elderly have the lowest poverty percentage of any age group in the country at 9%.

The Earned Income Tax Credit reduced the number of poor people by 6M, half of them children. Food Stamps come in a close second at 5M.

This table shows how all of the other programs have affected the poor.

Effect of Specific Adjustments to Income on Poverty Counts, 2010, in Millions
  Age Group
  All Under 18 18-64 65+
EITC -6.1 -3.1 -2.9 -0.1
SNAP (food stamps) -5.2 -2.2 -2.5 -0.4
Housing subsidy -2.8 -1.0 -1.3 -0.5
School lunch -1.2 -0.6 -0.4 0.0
WIC -0.3 -0.1 -0.2 0.0
LIHEAP (energy assistance) -0.3 -0.1 -0.2 0.0
Child support paid 0.3 0.1 0.4 0.0
Federal income tax before credits 1.2 0.2 1.0 0.1
FICA 4.3 1.4 2.9 0.1
Work expense 4.6 1.5 2.9 0.1
Medical out-of-pocket expenses 10.1 2.1 5.4 2.9
         
Number of People in Poverty 49.1 13.6 29.2 6.2

 

You can see that the table also lists those things that exacerbate the problems of the poor. Those include FICA deductions, childcare expenses, and that largest contributor to the ranks of the poor, uninsured medical expenses. The Affordable Care Act will provide a very high percentage of these people insurance coverage that they can’t afford today. The net effect is that 32M who don’t have insurance today will be insured and be able to afford care.

This graph also demonstrates the effects of commitment at the federal to reduce poverty.

People Living in Poverty

 

The other side of the equation is easy too because it is just math.

The question is can the private sector really take up the slack and provide better services to care for those in need than what is available at the federal level? The graph demonstrated that before the social safety net was expanded and charitable institutions were bearing more of the load, the poverty level was at 23%.

There are currently 45M people in poverty.

There are currently an estimated 335,000 churches in this country.  Roughly 59M people attend church regularly and the average size of a congregation is 75 people.

Here’s how the math works out.

If we depended on churches to deliver the same level of support that the government current provides, each church would be responsible either directly or indirectly for 137 people.

If you assume that the average household size in country applies to those who attend church regularly that means that there are 22M households where church going is a regular activity. Each household would be responsible to support two more people. How much would they have to pay?

The cost for our social safety net (excluding unemployment) in 2010 was $365B. As this graph shows, the majority of that increase as for Medicare.

Growth in Safety Net Programs

Math again comes to our aide. The amount of money we are spending per poor person is a little over $8K. Using our previous figures, every church would need to come up with an additional $1M a year. On a per family basis, every family would need to come up with an additional $16K.

Where is that money going to come from?

The conservative claim is that tax rates would go down and the private sector would give more.

However, simple math can help us with this claim too since we have already determined that the average family would have to contribute an additional $16K a year to make up for the support currently coming from the government. The average individual tax (federal, state, and local) paid in 2010 was $10,549. The social safety net spending represents roughly .3% of the federal budget.   So even if we extrapolate that savings to the total tax burden rather than just the federal tax, the reduction each individual would see is $31.64. With that savings comes the burden providing the equivalent of $16K in services to the two poor people they are responsible for.

Why the Math Doesn’t Work

The math doesn’t work because in a tax system, the government receives contributions from everyone.

In a private sector system, contributions only come from those who are motivated to contribute. There just aren’t enough willing to contribute to cover the gap. Today, the average charitable contributions are shown in the following graph. You can see they are all in the mid to low single digits. Adding another $31.64 in tax relief isn’t going to dramatically increase this contribution.

Dependency Culture

Conservative logic is faulty on this count too.

Their claim is based on a simplistic view of the situation.

Because they are looking at this through the prism of conservative values, conservatives have a difficult time understanding why anyone would take money from the government rather than taking the initiative to improve their lives themselves.

Rather than go into the details of why people are poor, or cycle in and out of poverty; let’s just address the question of dependence.

The key question here isn’t even whether dependency exists because the data also doesn’t necessarily support that bit of common wisdom either.

The only real question that conservatives are raising is whether dependency is a function of getting help from the government rather than the private sector because in both cases the poor are getting services they didn’t pay for. If anyone has had any personal experience with the challenges of getting money from the government, you know that it is infinitely more complicated to satisfy government requirements than it is to get help from a charitable organization.

So if there is a culture of dependency that exists among the poor, changing the source to one that is easier to deal with would logically INCREASE dependence.

Yet Paul Ryan and others claim that this is the problem. In a speech to the American Enterprise Institute he said our safety net, “lulls able-bodied people into lives of complacency and dependency, which drains them of their very will and incentive to make the most of their lives. It’s demeaning.”

Conclusion

And therein is the rub.

The bottom line when you deconstruct this whole argument is that conservative Republicans object to the very CONCEPT of providing assistance to the poor.

Mitt Romney summarized the current conservative Republican view when he said, “I said I’m not concerned about the very poor that have the safety net, but if it has holes in it, I will repair them…The – the challenge right now – we will hear from the Democrat Party, the plight of the poor, and – and there’s no question, it’s not good being poor and we have a safety net to help those that are very poor.”

But when you look at the Ryan Budget, which Romney also supports, it does not repair the safety net. In fact it includes steep cuts to food stamps, school lunches, crop subsidies, Supplemental Security Income for very poor seniors and disabled people, unemployment insurance, veterans’ pensions and refundable tax credits to the working poor. Even the US Conference of Catholic Bishops, though they are unhappy with the current administration over health care reform, wrote a series of letters objecting to the Ryan budget. They reiterated our national responsibility to protect the poor and said the proposed GOP budget “fails to meet these moral criteria.”

The bottom line is that government through the tax code is able to step in and spread the cost of programs for the poor over the whole taxpaying population.

The program generates positive results at a cost of approximately $30 per tax payer.

Without these programs the number of people in poverty would increase and the cost for those willing to provide services for those in need would increase dramatically from what they are paying today.

Those are the facts.

What we have from the Republicans is a thinly veiled attack on the poor. They feel that the poverty is the appropriate punishment for those unwilling to work for a living and any attempt to help those in need only encourages those who have already made bad decisions to continue their pattern. Since the poor clearly have earned their condition, Republicans feel perfectly justified in turning their back on them in the interests of debt reduction.

But that doesn’t make sense either, because when you take out Medicare, poverty programs represent only .3% of the federal budget.

So why bother?

It’s because Republicans are terrified of taking on the REAL problem of Medicare and jobs. Instead they are trying to convince voters that liberals have been running up the deficit by wasting money on poor people who don’t deserve it.

This “big lie” politics is a method of distraction that Republicans appear to be much better at that Democrats.  In future posts we’ll try to figure out why.

Next let’s deconstruct the Ryan budget and determine how effective it is in reducing debt.

 

10 Responses to “Blessed are the Poor”

  1. Keith says:

    Jeff,

    Quickly,

    YS) If we depended on churches to deliver the same level of support that the government current provides, each church would be responsible either directly or indirectly for 137 people.

    MR) You have made the fatal mistake of equating what it costs the gov’t to do “good” verse locals with their own money can do.
    i.e. eliminating the federal burocracy to deliver the services is the real saver…. (can you say GSA?)

    You certianly see conservitives in a light I simply don’t. (hope you were sitting when you read that startling news :-) ) Sorry responsise have been hurried lately and not well done. Major travel the last three weeks with more to come.

    For you consideration – Romney wraped up the nomanation, it appears, much faster then did Obama. Hillary wouldn’t get out of the way. The mainstream media foever set out to cast Romney as the candidate no one wanted. Mnay news stories were broadcast about however the repubs wanted ANYONE but Romnay and who the latest “anyone but Romney” was. Clearly trying to cast the eventual nomine in a bad light. Now watch how they will talk about the likablity factor. Obama is likable and Romney not so much. This will be done to deflect from Obama’s record.

    Also Ronmy said the kind of thing he needs to say that Obama has missed recently. (Obama was great at this in 2008) Romney said, “and we’ll build that pipeline if I have to go out there and build it MYSELF.” to much applause. I thought that was a gret line. Yes Obama will build the stupid thing. But he’s caught up looking like he isn’t, WHY? See the graphic there?

    Obamas EPA guy is out there saying the is going to war with the oil and gas guys like the romans use to treat conqued countries….all the while we’re paying $4.00 a gallon??????

    Gsa, Secret service guys, (not his fault)

    He needs to stop declaring war on so many and get WITH US!!!!!

    Now the NY Times says they need to vet him…..

    I would still give him the edge as its pretty hard to beat a sitting president. Bush #2 was pretty weak and Clinton was even weaker and they won. Only two president in my life time have lost, Carter, have we ever found ourselves in such horrible shape and Bush #1, and he was doing a good job.

    I’m beginning to think this one won’t be close. It Romney is accepted personally hell win comfortable as his message will carry FLA, Ohio, Penn and NC. If he is rejected personally, the Obama will win in a landslide. Obama will not win on points, Romney will. Obama will not win on issues, Romney will, Obama will win personality, Romney won’t. It its the last one then it will be over early. Just a thought today… (I reserve the right to change my mind at any time and not have it held against me)

  2. keith says:

    http://www.theblaze.com/stories/you-havent-even-thought-this-out-bill-oreilly-confronts-drop-the-i-word-spokesman-monica-novoa/

    Jeff, I saw this live. Very little bothers me. This is comical and stunning at the same time. I googled the movement. Like Bill O I refuse to let someone define the langue and tell me I’m racist or speak hate. This is what they are trying to accomplish. More stunning, and Bill didn’t get there, was the appearnt unspoken posession the young lady take’s of the word illegal alien. Possivie as in the only people she seems to think it applys to are mexicans. Bill asked “should we have open boarders?” To which the crickets chriped. I would love to have heard her answer………

    The young lady has no clue as to what is legal and illegal appearntly. Can you imagine the lawlwssness that woud insue if we all got to decide what words mean and what “hunam” laws should be??? Stunning.

    Incert into this whole theme the thought if you dis-agree with her you are ANTI-IMIGRATION!!!!!! What do any of her thoughts have to do with someone being ANTI-IMAGRATION!!!! Her thoughts are lawless..

  3. keith says:

    http://www.gcorrdropstheiword.org/

    Jeff,
    These people are so delusional, so wrong, and sooo miss-guided. Its amazing one can arrive at the point of view the writer has. It incrediable. Simply read Mexicos imagrations laws and compare them to ours. Then over lay on that what Mexico would do with these…. Its amazing!!!!

  4. Jeff Beamsley says:

    Keith,

    The differences here are staggering.

    I know that it is a common assumption that the government is inefficient, but in many cases it simply is not true.

    If you feel that local care is going to be DRAMATICALLY more efficient, please produce your data. Otherwise, whatever inefficiencies (imagined or real) the government may, the scale of care that the government provides simply overwhelms the CAPABILITY of local sources to replace.

    The math just doesn’t work.

  5. Jeff Beamsley says:

    As far as Romney, the press didn’t have to invent anything. The republican primary voters both in their votes and in the exit polls pretty much created the scenario that you described.

    Bottom line is the Romney is the nominee and now he will have to see whether he can sell his story to the whole country, rather than just those who were never going to vote for Obama anyway.

    Ultimately, the election is likely to turn on some fairly simple themes.

    If the economy continues to improve, Romney will likely lose because his claim that he could have done better will only play with those who weren’t going to vote for Obama anyway.

    If the economy takes a turn for the worse because of a deepening crisis in Europe or some other factor, Obama will lose because people who might have voted for him will have lost faith in his ability to manage this fundamental issue.

    All of the rest, will likely turn out to be window dressing.

  6. Jeff Beamsley says:

    As far as Bill O’Reilly is concerned. I don’t watch his program nor do I regard him as any sort of reliable source of information.

    Nor do I regard his guest any credible representative of liberal or progressive points of view.

    The fact that he was able to beat this person up in public doesn’t mean that his point of view is credible.

    It is sort of like prize fighters who only rarely actually have competitive fights. They recognize that they are able to make their money beating inferior fighters and only rarely is one of their fights actually a contest where the outcome is in doubt.

  7. keith says:

    http://www.humanevents.com/article.php?id=16860

    The attached is an arguement the war on Poverty has failed.
    From all sources I’ve found, LBJ’s war reduced the rate of poverty.
    But it has not elinimated it, far from it, and it is no longer being effetive in reducing it. It is time for a redirection of the effort.

  8. keith says:

    And as an aside the bible does not say “blessed are the poor” rather it says “Blessed are the poor in spirit….” A difference.

  9. Jeff Beamsley says:

    “And he lifted up his eyes on his disciples, and said, Blessed be ye poor: for yours is the kingdom of God.” Luke 6:20

    Wasn’t referencing the Beatitudes, but rather the bulk of the new testament where Jesus tasked his followers with responsibility for the poor.

  10. Jeff Beamsley says:

    With regard to poverty, I think that we all agree, including the author that you cited, that the current set of programs have significantly reduced poverty.

    Jumping to the conclusion that the failure of the current programs to eradicate poverty are justification to stop treating the condition is similar to suggesting that we should stop treating a communicable disease like malaria because efforts to eradicate the disease have so far failed.

    The Republican argument is that we need to do less because the current programs have created a culture of dependence does not survive more careful analysis. The argument falls apart rather quickly because it essentially says that getting help from the government creates a culture of dependence, but getting same help from a church or a charity which supposedly can provide that help more efficiently (presumably with less paperwork and regulation) somehow avoids creating dependency.

    It is simply a convenient way to blame the poor for their condition and as a result absolve everyone else from what we hopefully both agree is a God-given responsibility.

    I agree that the current programs don’t address all the needs of the poor. My conclusion is that this is evidence that more, rather than less, needs to be done.

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