The word is circulating that the massive COVID relief spending of the past year and a half has pulled the poverty rate down, lifting millions out of poverty. Ricardo Alonso-Zaldivar reports for the Associated Press:
Massive government relief passed in response to the COVID-19 pandemic moved millions of Americans out of poverty last year, even as the official poverty rate increased slightly, the Census Bureau reported Tuesday.
The official poverty measure rose 1 percentage point in 2020, with 11.4% of Americans living in poverty, or more than 37 million people. It was the first increase in poverty after five consecutive annual declines.
But the Census Bureau’s supplemental measure of poverty, which takes into account government benefit programs and stimulus payments, showed that the share of people in poverty dropped significantly after the aid was factored in.
The supplemental poverty measure was 2.6 percentage points lower than its pre-pandemic level in 2019. Stimulus payments moved 11.7 million people out of poverty, while expanded unemployment benefits kept 5.5 million from falling into poverty. Social Security continued to be the nation’s most effective anti-poverty program.
And it is being cited by the Democrats as justification for its drive to massively increase and expand the welfare dependency state. The New York Times front page headlines U.S. Poverty Rate Falls To a Record Low as Aid Helps Offset Job Losses. Success of Pandemic Relief Could Bolster Democrats’ Bid for an Expansion.
But how does one define “success?” If it means giving people a temporary financial lifeline after the mostly government-imposed shutdowns crushed their livelihoods, then I guess in that sense one can call that successful. But actually lifting people out of poverty?
True, forced government wealth transfers from people who earned it to people who didn't can create a statistical illusion of alleviating poverty. But so can any common looter.
And since these transfer programs are funded by seizing earnings from productive people, all they do is pull more people down into poverty, properly defined. As Ayn Rand, in her eloquently understandable way, foresaw in the onset of the welfare state 5 decades ago:
Morally and economically, the welfare state creates an ever accelerating downward pull. Morally, the chance to satisfy demands by force spreads the demands wider and wider, with less and less pretense at justification. Economically, the forced demands of one group create hardships for all others, thus producing an inextricable mixture of actual victims and plain parasites. Since need, not achievement, is held as the criterion of rewards, the government necessarily keeps sacrificing the more productive groups to the less productive, gradually chaining the top level of the economy, then the next level, then the next. (How else are unachieved rewards to be provided?).5
My emphasis. The failed history of the 1960s Great Society "War on Poverty" is proof of that. Even by proponents own standards, the welfare state—aka, “social safety net”— has failed. Said Andre Perry, senior fellow in the Metropolitan Policy Program at the Left-leaning Brookings Institution,
“We haven’t seen a shift like this [Democrats Covid relief bill] since FDR. It’s saying families are too big to fail, children are too big to fail, the elderly are too big to fail. It’s a recognition that the social safety net is not working and was not working prior to the pandemic.”
My emphasis. If it hasn’t failed, then why, after more than half a century and untold $trillions in welfare spending, is poverty still near the top of the political agenda, especially of the Left. Worse, why do Democrats’ welfare schemes keep climbing the economic ladder, cutting ever deeper into what we once called “the middle class?” If it has failed, then what’s the logic of doubling down on a 55-year failure?
Why, indeed?
Properly defined, in my view, poverty is the state of not earning enough to provide for one's basic necessities and well-being. The only true way to alleviate poverty is to work your way out of it. Those millions may have been "moved" out of poverty, statistically. But they didn't work their way out. Without continued dependence on those who still produce, they are right back to where they started—poor—because poverty is a state that they never really left.
The greatest champions of the poor are business entrepreneurs and innovators who make the investments in machines and work processes that raise worker productivity. They are the heroes—if I can use that overused word accurately—creating opportunities for people to rise out of poverty with honor and dignity.
The welfare statists are not interested in alleviating poverty, of course -- if they ever were. If they were, they would expand the opportunities for such innovation by reducing the regulatory burden on business and entrepreneurship and the tax burden on all workers at every income level—including the indirect tax on workers and consumers that is the corporate income tax—thus minimizing the “need” for transfer payments.*
They won't, because their aim is to expand the permanent welfare poverty class to as many as possible, and keep doing so until dependence poverty swallows up the middle class. As Ayn Rand has observed, “The politicians who implement the welfare state and the intellectuals who advise them are the crucial invisible profiteers on this system, because of the power over others it gives them.
Universal poverty is the only societal state that can result from steadily disincentivizing productive work and expanding parasitism. This, of course, is the economic history of socialism.
* [“Minimizing” from the welfare state perspective. In fact, forced government wealth transfer, sometimes called “redistribution,” is immoral and never justified by need.]
Related Reading:
From Middle Class to Welfare Class
‘We’ Did Not Create the ‘Mighty Middle Class’: ‘I’ Did
Governor Murphy’s Plan to ‘Make New Jersey Great Again’
From ‘You Didn’t Build That’ to ‘The Nation's Wealth’
Ayn Rand Anticipated Obama's "You Didn't Build That" Outrage
Productivity, Not Labor unions, Created the Middle Class
Great Society: A New History by Amity Shlaes
The "Relative" Poverty Gimmick
The "Relative Poverty Gimmick" Revisited
Redefining Poverty to Reignite Big Government Expansion
"Shared Prosperity" Another Name for Failed Policies
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