Archive for the ‘2e. Why People Are Still Poor’ Category.

Cure For Poverty

Cure For Poverty

Watch three very short videos that explain how to reform welfare and reduce poverty

Welfare Can And Must Be Reformed

Here are the main points of the video:

In 1964 President Lyndon B. Johnson announced a War on Poverty. He pledged to prevent poverty by eliminating its causes. He promised to shrink future welfare dependence.

But, that never happened. The cost has skyrocketed 1300% and the poor are more dependent on the government than ever before. Over the past 46 years we have spent $15.9 trillion on welfare. We will spend $1 trillion in 2011 alone. Without reform, welfare will bankrupt America.In 1996, reform put 2.8 million households back to work. We can do that again. Here’s what we need to do:

  1. Get spending under control by returning welfare spending to pre-recession levels after the recession ends.
  2. Move from welfare to jobs by requiring anyone seeking aid who can work to have a job or be looking
  3. Limit low-skilled immigration because 15% of all welfare toes to households headed by low-skilled immigrants.
  4. Reduce rewards for dependence by treating portions of welfare as loans to be repaid.
  5. Promote healthy marriage by ending the marriage penalty, which reduces aid to couples who get married.

ReducE Poverty by Revitalizing Marriage: Advice for Obama

Here are the main points of the video:

Robert Rector, Senior Research Fellow Heritage Foundation, says that the decline of marriage is the principle cause of child poverty and welfare dependence. Children who do not have a father in the home are more likely to fail at school, be involved in crime, and suffer from other problems.

Today roughly 4 out of 10 children are born outside of marriage to low income and low educated white, black and Hispanics. These people do not understand the importance of marriage before bringing children into the world. We need to give them resources to think more logically about the choices they make about marriage and having children. Being married before having children is the most effective way to reduce poverty.

Walter E Williams – Cure for Poverty

Here are the main points of the video:

Economics professor Walter E Williams explains how not to be poor. The cure for poverty contains the following four items. This is a written guarantee that you will not be poor:

  1. Graduate from high school
  2. Don’t have children until you are married.
  3. Stay married.
  4. Take any kind of job and stay out of jail.

According to the Census, only 8% of Blacks with those characteristics are poor.

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Poverty Cure

Poverty Cure

It’s time to set the developing world free. It’s time to start asking what creates wealth.  Watch this video and find out why $2 trillion in economic aid has merely created dependency. Entrepreneurship creates wealth. Business is the way that people rise out of poverty.

Here are the main points of the video:

The reason there will be no change in the poor through distribution of aid is that the people who stand to lose by change (U.N. and foreign governments) have all the power. The people who stand to gain by change (the poor) have none of the power.

Why is half the planet still stuck in poverty? Over $2 trillion has been spent on foreign aid. However, aid creates dependency. It subsidizes dictators. It encourages inefficiency. Most of the money for aid doesn’t even get to the poor.

Aid has delayed the formation of businesses in Africa. It has kept Africa behind. It imposes a system of economic slavery. These are the strategies of the last 50 years, which have failed.

The question to ask is what creates wealth? If the African nations refuse aid, they will begin to grow. Economic transformation comes from locally run, locally owned businesses. Entrepreneurship is the answer. Business is the way that people rise out of poverty, not state-to-state aid.

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John Stossel – Alleviating World Poverty

John Stossel – Alleviating World Poverty

In this short video, John Stossel discusses the dynamics of world poverty and ways to help with guests Andrew Mwenda and Karol Boudreaux.

Here are the main points of the video:

How should we help people in poor countries? Every year governments give billions in aid to Africa. Does it make a difference? $500 billion later, Africa is still poor.

50 years ago countries such as South Korea, Hong Kong, and Singapore were as poor as Africa. Now they are rich as we are, while the countries in Africa are poorer than before they received aid. Why?

Andrew Mwenda, Ugandan journalist, says that foreign aid is often stolen by government bureaucrats. Karol Boudreaux, Mercatus Center, agrees and says that aid makes government bureaucrats accountable to people other than the citizens who need the aid. Bureaucrats are also accountable to the governments who gave the aid.

Mwenda said that if the aid was in the form of venture capital to start businesses, it would be more effective. However, celebrities such as Bono who support foreign aid, think they know more about what Africans need than Africans themselves.

Bono claims that Ireland prospered because of the aid it received. However, he didn’t say that Ireland has dramatically changed its economic policies, lowering taxes and making the country more business friendly. If African countries did the same thing, they would succeed like Ireland has. The Fraser Institute’s Economic Freedom of the World index for the first time has listed an African country as being one of the most free countries in the world. Tiny Mauritius in the Indian Ocean ranked 8 out of 144 countries.

Mwenda thinks that Bill Gates should provide venture capital to Africans so they can start Microsofts of their own. African’s don’t need handouts; they need opportunities through investment and trade to earn high incomes.

One method is called microfinance. Poor people do not own much that can be used as collateral, so they can’t get loans. Microfinance is a way for the poor to get small loans of $50 and less. It seems to work, and the loans typically get paid back. At this link  John Stossel provides several companies that provide microfinance.

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Free Markets Not Redistribution Is Best Way to Reduce Poverty

Free Markets, Not Redistribution, Is Best Way to Reduce Poverty

Watch this short video to see how the War on Poverty has failed. The welfare state has been a disaster for the less fortunate, creating a flypaper effect that makes it difficult for people to lead independent and self-reliant lives. This Center for Freedom and Prosperity Foundation video shows how the poverty rate was falling after World War II but stopped after the government declared a War on Poverty.

Here are the main points made in the video:

The Left contends that government should help the poor with “means tested programs” that redistribute wealth to the “have-nots.” They claim that those who oppose such policies are uncompassionate toward the poor. However, these government polices actually hurt the people they are designed to help, as this video will show. Free market capitalism is the most compassionate policy to help the “have-nots.”

Who are the poor? Please see Top Reasons People Go on Welfare below. The top two reasons: Divorce and out of wedlock births. Losing a job (earnings fall) is not that high on the list.

Top Reasons People Go On Welfare

What is poverty? Poverty is defined by federal bureaucrats as shown below:

Poverty Guidelines

It’s relative however. Poor people today would be considered middle class in the 1950s as shown below:

US Per Capita GDP Over Time

And our poor are actually well-off compared to other countries in the world as shown below:

GDP Per Capita For Select Countries

Poor people have access to consumer goods as shown below that used to be considered luxuries in the past:

Poor People Ownership of Consumer Goods

They have more living space than most people in Europe.

Living Space of US Poor Versus Europe

What drives poverty? The poverty rate had been steadily falling from 1940 to 1969, as you can see below: Then in 1969 the War on Poverty began. Since then, the poverty rate has remained roughly the same. Why? Government provides a safety net that subsidizes poverty and creates dependence. Like fly paper, it makes it hard to get unstuck. The money you earn less taxes does not outweigh the government handouts you receive. Unfortunately welfare spending and poverty is increasing.

Poverty Rate Was Falling Until the War on Poverty began

What can fix poverty? We need to break the dependency and create economic freedom to create jobs. Milton Friedman, said, “There has never in history been a more effective machine for eliminating poverty than the free enterprise system and the free market.” Unfortunately, we are drifting in the wrong direction.

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Star Parker Welfare dependency destroys black families

Star Parker: Welfare dependency destroys black families

Star Parker is the founder and president of CURE, the Center for Urban Renewal and Education , an organization that promotes market based public policy to fight poverty.  She is also the author of Uncle Sam’s Plantation. Parker grew up poor in East St Louis and on welfare. She lifted herself out of welfare and today promotes free enterprise solutions to poverty. Watch her interview on Varney & Co. – Fox Business.

Here are the points that Star Parker makes :

When she was on welfare, everything was paid for by the government, items such as food stamps, rent, medical treatment, etc. However, she says that people get addicted to it like a drug and become dependent.

Welfare recipients are not only destroyed, their personal dignity is destroyed, and the whole community is destroyed as well. The impact of this entitlement mentality and government dependency on the black community has been devastating.

It began after the War on Poverty in the 60s. That’s when we began to see the unraveling of the entire black community as the family collapsed. Before the 60s, the black family was pretty healthy. Seventy-eight percent of husbands were in their homes with their wives raising their children. But after the government said “you don’t have to work, you don’t have to save, you don’t have to get married,” over time marriage stopped. Now seventy percent of husbands are absent from the home. Seventy percent of black children are born outside of marriage.  This has destroyed the family.

Parker says that she receives death threats from some people but others want to learn more. That is why she wrote the book Uncle Sam’s Plantation, to help people understand they don’t have to live in dependency on the government.

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Why the War on Poverty Failed and People Are Poor

Why the War on Poverty Failed and People Are Poor

This week’s lesson will provide a short video each day explaining why the War on Poverty failed and people are poor and how to solve the problem. Today, watch this short video by Robert Rector, Senior Research Fellow Heritage Foundation, that reveals the size of welfare programs and provides the single most important way to reduce poverty.

Here are the main points that Rector makes:

The great secret is the cost of welfare. People consider Social Security and Medicare as huge programs that will bankrupt us. However, most people are unaware that for every $1 we spend on Social Security and Medicare, we spend 75 cents on welfare (means-tested programs available only to low income people).

You don’t hear about this because there are 70 of these programs. Every committee in the House and Senate has their own welfare programs. Families usually obtain benefits from 10 programs, like Medicaid, food stamps, earned income tax credit, child care subsidies, etc. In total the typical family is receiving over $25,000 per year, not including free K-12 education. This brings the total to around $45,000 for families in the bottom third of the population in income.

In total we have spent over $16 trillion on the poor since the War on Poverty began in the 1960s. By contrast, all the wars in US history from the Revolutionary War to the present cost about $4 trillion.

The Obama administration has increased this spending by 40%, and the US is now spending $1 trillion per year. The Left justifies this because of the recession. The problem is they never reduce it after the recovery. The spending continues unabated forever.

The other great secret is how to reduce poverty. The number 1 way to reduce child poverty is a married father. As the chart below shows, about 30-40% of single mothers in the US are poor. However, if they are married to the father of the child, only 6% are poor. This is an 80% drop.

Percentage of Families with Children That are Poor

Source: The Heritage Foundation

What government program encourages marriage? None.  Plus, there would be no cost to the taxpayer!  The number 1 way to reduce poverty is to encourage women to marry the father of the child.

Marriage is more effective reducing poverty than education. Marriage is equivalent to adding six years of education. However, all you hear is that poor people must graduate from high school and go to college. You never hear in any school, any welfare office, any public service announcement that the number 1 way to avoid poverty is to be in a stable marriage before having children.

Why don’t you hear it? It is massively politically incorrect. For the Left there is nothing so politically incorrect than to promote the marriage between a man and a woman.

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