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What’s Driving High Poverty Numbers?

Wednesday, September 12, 2012

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Today, the U.S. Census Bureau released its annual poverty numbers. It reports that 46.2 million Americans remain poor; the figure was unchanged from last year. The percentage of Americans who were poor remained at a near-record 15 percent.

What we are sure to hear now is a cry from big-government advocates for increased government welfare spending.

But record poverty is not the result of insufficient welfare spending. Last year, the government spent $927 billion on means-tested welfare aid, which breaks down to about $9,000 per lower-income person in the United States. The Census Bureau counts only about 3 percent of this as income when calculating poverty. This flawed measure is a crucial reason why poverty in the U.S. looks very different from the vision most people have of it.

A more accurate way to think of the Census Bureau’s official poverty measure is as a report of “self-sufficiency”: the ability of Americans to sustain an income above poverty without reliance on welfare. The U.S. has record-high poverty (or rather, lack of self-sufficiency) in the short term because of bad policies that have damaged the economy and failed to create jobs. In the long term, the lack of self-sufficiency has been caused by a massive welfare state that discourages work and penalizes marriage.

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