OpinionPoverty Issues

Ways to Improve America’s War on Poverty

Leslee Kulba- Michael Tanner has long been arguing that government programs train people to be dependent instead of encouraging them to learn skills for success, like living within a budget, taking calculated risks, viewing oneself as a producer more than a consumer, making a commitment to never stop learning, and setting goals for flourishing instead of just surviving.

Tanner recently defined the problem and offered solutions at a Policy Perspectives seminar hosted by the Cato Institute in New York.

He’s been keeping track of government anti-poverty programs for several years, so he began with the latest statistics. “The federal government alone has more than 100 different anti-poverty programs – about 70 which provide benefits directly to individuals and the remainder which provide benefits to poor communities The federal government spent roughly $700 billion last year on these programs. State and local governments kick in another $300 billion, meaning we spent about a trillion dollars fighting poverty last year.”

The country has spent $26 trillion in 2018 dollars on anti-poverty programs since the War on Poverty was declared in 1965. So why do areas of concentrated, cross-generational poverty persist?

Tanner says there are two main beliefs about the root cause of poverty. Conservatives blame individuals, citing the “success sequence,” which claims if one graduates from high school, gets a job, and postpones having kids until after marriage, they probably won’t be poor. The poor, proponents argue, are making bad choices. Progressives, on the other hand, believe it’s society’s fault. They ask how a child is supposed to become independently wealthy when he gets hassled by the police all the time, goes to horrible schools, and doesn’t know hardly anybody with a real job.

Tanner says both schools of thought are true to a small degree, but the real problem is government. “If we really wanted to fight poverty in this country, what we should do is tell the government to stop [keeping] people poor.” He suggests five strategies that might make a change.

First, he advocates for criminal justice reform. He says too many young men get arrested for small crimes. Then, they can’t get a job because they have a criminal record, and it is harder to get a wife when one is either unemployable or unavailable, due to serving time. Tanner asks who the women in targeted communities are supposed to marry to follow the “success sequence.” A Vanderbilt University study estimated popular criminal justice reform efforts could reduce the national poverty rate by about 20%.

Secondly, he sees the government is doing the same thing with education that it is doing with poverty: throwing money at it. To illustrate, he said some of the worst school systems in the country have some of the highest per-pupil spending rates. As remedies, he proposes any of many suggestions that have been around awhile, like charter schools, vouchers, and tax credits; and adds parents, not government, should be the primary custodians of their own children.

Thirdly, he says government must reduce the cost of housing. Zoning and land use laws, by their restrictive natures, add costs of compliance to construction. Nationwide, zoning ordinances add, on average, 10% to housing costs. “If we really want to make housing affordable in this country, it’s not a matter of having more subsidies to chase ever-higher costs. It’s a mater of getting rid of those regulations to reduce the cost of housing, so the poor can have mobility and move into the areas where the jobs are.”

Fourthly, Tanner says banking laws are preventing the poor from saving money. “We’re so terrified of terrorism and drug-money laundering that we require all sorts of special rules and identification in order to open a bank account.” He said 20% of poor people in the country don’t have the ID banks require to open a bank account. So, they pay high fees at check-cashing places and, because they’re carrying “wads of money,” they get mugged or picked up by the police on suspicion of trafficking.

Lastly, he says throughout most of history, people have lived in abject poverty. That changed about 300 years ago, and he attributes the change to the rise of free-market capitalism. This is not the crony capitalism that is rightly demonized, but truly free markets where, simply, trade occurs at price points determined by those making the transaction. In a truly free market, people can get to work, finding fulfillment as they serve the needs of others, instead of facing prohibitive barriers to entering the market like certification laws, permitting fees, registrations, etc.

Tanner argues poverty is the natural state of mankind; but prosperity is manmade and only possible when government views itself as the defender of citizens’ rights to move about and transact business freely and honestly. Tanner was promoting his new book, The Inclusive Economy.

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