Tag: Income distribution

Back in 1996, when “welfare reform” was being debated, opponents of the bill warned that it would result in an upsurge the numbers of the profoundly destitute. Proponents scoffed.

Since then, the welfare-reformers have been crowing. Despite the vigilance of poverty researchers, they say, no one is finding the predicted horror stories. (That’s partly, some of them admit, because there was less to the bill than met the eye; the big non-cash programs such as housing and food stamps continued, and many people were able to move from AFDC &#8212 renamed TANF &#8212 onto the disability rolls.)

But official data show a steady increase since 2000 in the numbers of the “extremely” or “severely” poor, (below 50% of the income level that defines simple “poverty”) and the horror stories aren’t hidden from those willing to look.

Naturally, the Bush Administration is on the case: it has proposed to stop collecting the data.

I’d be interested in responses from my friends among the “welfare-reform” fans.

Update Doug Besharov’s thoughts, from 2002.

Second update A reader comments:

The relevant numbers for 1996, 2000 and 2005:

Percent of People By Ratio of Income to Poverty Level: 1970 to 2005

_____________________________________________________________

All people

______________________________________________

Year 0.50 0.75 1.00 1.25 1.50 1.75 2.00

_____________________________________________________________

2005…….. 5.4 8.6 12.6 16.8 21.5 26.1 31.0

2000 12/…. 4.5 7.5 11.3 15.6 20.2 24.9 29.3

1996…….. 5.4 9.3 13.7 18.5 23.4 28.5 33.5

I don’t think the welfare reformers have much of anything to apologize for. The 2000 numbers were very good. If you want a baseline, 1996 seems like a perfectly appropriate choice. It doesn’t show what McClatchey wants to show, so it doesn’t make the newspapers. The newspaper article is a fraud, and not a very good one.

Given that 1996-2006 was a pretty good decade economically (I can’t find the figures quickly, but GDP per capita must be up something like 30% over the period) I’m not sure that an unchanging number of people in severe poverty over that period counts as success. But judge for yourself.

It has long been said that in the 1960s we declared war on poverty, and poverty won.

Doug Besharov of the University of Maryland and AEI says: bull****. Poverty lost, big-time. That is, the proportion of the population living in severe material deprivation has declined sharply by almost any measure, but the official “poverty rate” calculation misses most of that progress. That leaves behind, of course, the problem of concentrated poverty and social dislocation in a few dozen neighborhoods around the country, and the growing problem of income insecurity among those not persistently poor.

(It’s an open question how much of the truly awful urban poverty of the 1960s is still with us; Besharov is much less concerned than I am with the separate issue of growing inequality of income and wealth among those who don’t have to worry where their next meal and their next month’s rent are coming from.)

In Besharov’s view, conflating the concentrated-deprivation problem and the income-insecurity problem into a single “poverty problem” is a mistake, and leads to misdirected policies. Today, in advance of the annual Census Bureau release of its estimate of the poverty rate and on the anniversary of the Katrina disaster, he joined with Nick Eberstadt of AEI and former Philadelphia mayor the Rev. Wilson Goode to review the facts and look to the future for an audience of journalists (plus me). The result will probably show up on C-SPAN at some point, and I’ll link to that when it’s available. In the meantime, here are Eberstadt’s slides.

I found the basic Besharov/Eberstadt thesis convincing, though my view isn’t really an expert one. But I was struck during the discussion by the extent to which basic facts &#8212 for example, of those in persistent material deprivation, how many are rural rather than urban? &#8212 simply weren’t available.

According to Eberstadt, the capacity of the Federal government to know what’s going on in domestic policy is being systematically dismantled as one data-collection effort after another is zero-funded. (In my own business, this happend to the DUF/ADAM arrestee drug-use measurement program; Eberstandt’s example is the Survey of Income and Program Participation, which was the only national study that provided evidence on income dynamics over time, thus allowing us to distinguish between the persistently poor and the transiently poor.)

This is driven at least in part by conservative ideology: the right seems to think that the less we know about problems the less we’ll be tempted to try to do something about them. If memory serves, sometime in the 1970s the Republican-Dixiecrat alliance actually passed an appropriations rider forbidding the development of “social indicators” to parallel the widely-published economic indicator series. That left us with unsatisfactory single numbers such as the poverty rate.

Eberstadt, in a conversation after the meeting, drew a parallel with the old conservative strategy of “starving the beast” by cutting taxes to make new social programs fiscally impossible. He summed up the apparent strategy of the Bush Administration as “feed the beast, but blind it.”

David Cay Johnston reports in Tuesday’s New York Times about fraudulent offshore tax shelters that cost the Treasury $70 billion a year. The story, based on a Senate report, has some interesting detail, including the role of a Cravath, Swaine partner who used to head the tax section of the ABA in issuing opinion letters that his clients could then use to demonstrate a good-faith belief that the activity was legal.

The question of who at the IRS has been asleep at the switch, or why the Bush Administration hasn’t moved resources into catching super-rich tax cheats, isn’t even mentioned.

The basic problem is that much of the Republican Party doesn’t actually disapprove of tax cheating, unless it involves the working poor and the Earned Income Tax Credit.

Class warfare is a fact of life, and the super rich are winning in a rout.

It’s been said before, but it can’t be said often enough. Ezra Klein has some numbers.