Real poverty in the United States is largely confined to those individuals who suffer from mental illness or are habitual criminals. Research shows that the U.S. has effectively eliminated true poverty.
The problem is that politicians still support the welfare state and the Democratic Party wants to dramatically expand the welfare state. Voters need to say "no more welfare." Tear down the welfare walls that trap generations in cultures of poverty. Welfare perpetuates poverty.
This month, three new papers from the National Bureau of Economic Research reached the same conclusion: more welfare does not break the poverty cycle. The papers also demolish the arguments for universal basic income programs which would take from the most productive and give to the most slothful.
Researchers examined the effects of a guaranteed income of $1,000 a month. The recipients of the guaranteed income worked less, earned less income, engaged in more leisure time, and did not pursue educational or vocational programs that might improve their long-term economic prospects. Importantly, the guaranteed income also caused the partners of recipients to engage in economically detrimental behavior. In effect, a guaranteed income reinforced personal sloth for the individual and the household. The authors said "we observe no significant effects on investment in human capital."
Working with the same dataset, economists looked at how a guaranteed income affected health outcomes. Again, a guaranteed income had zero effect on health outcomes. The researchers found "no effect" across several measures of physical health. The academics ruled out even very small improvements in physical health. Moreover, after two years, for the recipients of free money, there was no improvement in mental health. Very importantly, the guaranteed income did not produce more responsible physical behavior: exercise did not increase, quality of sleep did not improve, and overall behaviors remained the same.
In a separate NBER paper , economists found similar behavior patterns among elderly homeowners who experienced the wealth effect from rising house prices. The elderly beneficiaries of the housing boom did not consume some portion of that additional wealth to improve their overall physical well-being.
The research papers suggest that people caught in low-income circumstances do not strive to escape. Individuals with poor personal health do not make necessary changes to improve their overall well-being.
Yet it's also clear that many households remain stuck in low-income neighborhoods where opportunities are limited and crime is elevated. The federal government should focus on helping responsible families to move from failing communities to vibrant neighborhoods by encouraging zoning reform which would not be a drain on the federal budget.
Still, data from the papers support the position that the federal government’s welfare programs should be slashed, at least for adults in the prime working ages of 18-65. The U.S. cannot afford to spend money on programs that produce null or minimal positive returns.
CLICK HERE TO READ MORE FROM RESTORING AMERICA
Professor Thomas Sowell is a giant in the field of economics. He should have been awarded a Nobel Prize. He was not, probably because he speaks the language of truth , not woke. Sowell said people are poor because they don’t produce, and not for any other reason.
The federal government should not subsidize the lifestyles of the nonproductive population. Every person has a responsibility to demonstrate grit and produce.
James Rogan is a former U.S. foreign service officer who later worked in finance and law for 30 years. He writes a daily note on the markets, politics, and society.
Most Popular
Comments / 0