All those programs cost taxpayers more than $668 billion last year. That’s an increase of more than $193 billion since Barack Obama became president. It’s roughly 2½ times greater than any previous increase over a similar time frame in U.S. history and will increase means‐tested welfare spending by about 2.4 percent of gross domestic product.
Moreover, if one includes state and local welfare spending, government at all levels will spend more than $952 billion this year to fight poverty.
The Obama administration obviously believes that one measures compassion by inputs. The more money we spend on welfare programs, it argues, the more people receive benefits from those programs, the better job we do fighting poverty. By those measures, we are indeed doing a better job.
Since President Lyndon B. Johnson first declared a “war on poverty” in 1964, federal, state and local governments have spent roughly $15 trillion fighting poverty. In constant dollars, federal spending on welfare and anti‐poverty programs has jumped from $178 billion to $668 billion — a 375 percent increase in constant 2011 dollars. Total welfare spending — including state and local funds — has increased from $256 billion to $908 billion, a 355 percent increase.
Or look at it a different way: As a percentage of GDP, federal spending on welfare programs has increased more than fourfold, from just 0.83 percent of GDP to 4.4 percent. Total welfare spending at both the federal and state levels nearly tripled, from 2.19 percent of GDP to 6 percent. On a per capita basis — or rather per poor person — federal welfare spending has risen by more than 900 percent, from $1,625 to $14,848, while combined federal and state welfare spending increased by a smaller but still substantial 651 percent, from $3,032 to $19,743.
Indeed, federal welfare spending actually totals more than $14,848 for every poor man, woman and child in this country. For a typical poor family of three, that amounts to more than $44,500. Combined with state and local spending, government spends $20,610 for every poor person in America — or $61,830 per poor family of three.
Given that the poverty line for that family is just $18,530, we should have theoretically wiped out poverty in America many times over.
But we have not only failed to end poverty, it’s getting worse. In fact, the poverty rate has recently increased to 15.1 percent of Americans, the highest level in nearly a decade and nearly the level it was soon after the “war on poverty” began.
Judged by outputs — how few people are poor and therefore how few people need welfare — we are not doing nearly so well.
This is all the more tragic because we actually have a pretty good idea of what the keys are to getting out of or staying out of poverty: (1) finish school; (2) do not get pregnant outside marriage; and (3) get a job, any job, and stick with it.
None of this has anything to do with getting more people to sign up for welfare benefits.
This means that instead of trying to expand welfare, we should end those government policies — high taxes and regulatory excess — that inhibit growth and job creation. We should protect capital investment and give people the opportunity to start new businesses. We should reform our failed public school system to encourage competition and choice. We should encourage the poor to save and invest.
Unfortunately, on policy after policy — from health care reform to the stimulus — Obama has been content to simply throw money at a problem with little regard for results.
In this case, sadly, it’s the poor who suffer the most.