January 17, 2021

Gen Z Conservative

The thoughts of a young conservative on political issues relevant to all ages

the war on poverty failed miserably

The War on Poverty Failed Miserably

Introduction

Many of our friends on the left hold up the war on poverty, which was Lyndon Johnson’s attempt to use the power of Big Government spending to erase poverty in America, as a terrific program. Sure, there’s still poverty, but in the view of the socialist left, a delusional force that young conservatives, especially college conservatives like me, have much experience dealing with, that failure is due to capitalism, not the failure of the war on poverty programs.

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Of course, that is absolutely absurd. The war on poverty failed miserably not because of capitalism, but because Big Government spending and welfare programs encourage poverty rather than eradicate it.




Sadly, few Americans are willing to openly acknowledge that the war on poverty was a failure. They’d prefer to believe in the myth of Big Government excellence. However, one journalist is willing to accept the obvious truth about the war on poverty; Daniel Mitchell of the Foundation for Economic Education recently penned an article entitled “Poverty in the U.S. Was Plummeting—Until Lyndon Johnson Declared War On It.” It’s a great article on the war on poverty and one that I highly recommend that you read.

capitalism is better than Big Government
Everything works better than Big Government programs like the war on poverty.

Summary of Why the War on Poverty Failed:

First, Mitchell describes how government policies such as high spending, high taxes, and minimum wage laws are bad for the economy. They stifle productivity, hiring, and investment because they are constraints on the market. If America is to have a culture of innovation, entrepreneurship, and steadily rising productivity, then it needs a free market. It does not need more regulations and taxes, both of which weigh heavily on the economy:

One of the more elementary observations about economics is that a nation’s prosperity is determined in part by the quantity and quality of labor and capital. These “factors of production” are combined to generate national income…

Bad tax laws also discourage labor. High marginal tax rates penalize people for being productive, and this can be especially counterproductive for entrepreneurship and innovation.

From: The War on Poverty Failed

Next, Mitchell quotes from a WSJ article on the war on poverty to show how President Johnson and Big Government hurt, rather than helped, the poverty problem. LBJ’s programs did not make society richer (I know, big surprise:

During the 20 years before the War on Poverty was funded, the portion of the nation living in poverty had dropped to 14.7% from 32.1%. Since 1966, the first year with a significant increase in antipoverty spending, the poverty rate reported by the Census Bureau has been virtually unchanged…

From: The War on Poverty Failed

Finally, Mitchell describes how the lesson from the war on poverty should be that federalism and capitalism should be used to combat poverty, not top-down solutions from Washington. Welfare programs, as they currently stand, seem designed to punish those that want to break free from the talons of government programs. That’s the exact opposite of what should be the case and it is destroying American society because it means that the welfare rolls are growing ever larger:

Folks on the left think the solution to high implicit tax rates (i.e., the dependency trap) is to make benefits more widely available. In other words, don’t reduce handouts as income increases.

The other alternative is to make benefits less generous, which will simultaneously reduce implicit tax rates and encourage more work.

From: From: The War on Poverty Failed




My Take on the Failure of the War on Poverty

I only have one thing to add to the excellent points Mitchell made in his article. That point is that Americans seem to have forgotten that capitalism will solve our problems, especially poverty, if only we let it.

Whereas the socialist left supports compulsion, capitalism and its defenders on the right recognize that consent and incentives are all that is necessary to build a better society. With capitalism, a rising tide lifts all boats as profits and entrepreneurial spirit incentivize people of every station to work harder and produce more. That’s the virtue of capitalism and is what was working before the war on poverty; it was working excellently.

the rising tide of capitalism
Adam Smith on the Rising Tide of Capitalism, aka the solution to poverty

Then Johnson stepped in with the war on poverty and all that progress was undone. Now our finances are buried under a massive welfare state and a huge portion of the populace is dependent on government aid, as described in Free Market Revolution.

If Americans want to ever have a balanced budget and start decreasing the tremendously large national debt, then we will need to find ways to decrease our welfare rolls. Starting to roll back (no pun intended) the failed Great Society programs from the LBJ era are the best way to do that. Those programs suck up immense amounts of money and, even worse, keep people stuck on the rolls rather than encouraging them to get back into the workforce. We need more productive citizens, and thus more taxpayers, not more moochers and looters that remain firmly attached to the federal teat.




Conclusion

The war on poverty failed miserably because it threw the capitalist economic handbook as described by Adam Smith in the Wealth of Nations, Milton Friedman in Capitalism and Freedom, and Hayek in The Road to Serfdom out the window and replaced it with ever-growing spending and Big Government programs. Capitalism is the solution to poverty. It works because it creates wealth. Big Government policies just spend that wealth in an unproductive and often incomprehensibly idiotic manner.

By: Gen Z Conservative


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