There are many ways in which the vast army of D.C. ideologues torture the truth, but one I find uniquely misleading is to claim that “we fought a war on poverty and lost.” Our own WaPo Fact Checker dinged Rep. Paul Ryan for his “slick use” of this argument on last Sunday’s talk shows, but it’s been a pretty constant mantra since President Ronald Reagan first got it wrong lo those many years ago.
In fact, a new study by Arloc Sherman and Danilo Trisi (S&T) finds that our anti-poverty programs reduce poverty by more than half, from about 29 percent to about 14 percent, and even more so for kids (see figure above). These programs lift 48 million people above the poverty line, including 12 million children.
First, a slight bit of wonkiness re poverty measurement. The new study brings two important innovations to the measurement of poverty and the question of programmatic impacts. First, it corrects serious shortcomings in the official poverty measure, which fails to count the impact of the very anti-poverty programs that have expanded most in recent years, like pro-work wage subsidies delivered through tax credits. Second, it corrects the survey data by which we measure poverty for under-reporting of these benefits.
To be clear, the first correction noted above — including the poverty-reducing impacts of measures left out of the official rate — has been readily accessible for years. Estimates by our own Census Bureau are but a mouse click away. So there’s no excuse for continuing to cite the misleading official rates.
Both the Earned Income Tax Credit and the Child Tax Credit are good examples of what’s in play here. They’ve both expanded considerably in recent years, often with bipartisan support, and yet their impact is omitted in the official rate. S&T show that they lift 10 million people, including 5 million kids, out of poverty. Food stamps (SNAP) has a similar impact.
Social Security benefits are counted in the official rate, but they’re undercounted. Once they correct for the undercount, S&T find that more than 27 million Americans are lifted out of poverty by Social Security.
I’ve been in this town a long time, and can go to the cynical place as quickly as the next econo-politico-analyst-operative. But in the face of numbers like these, it is unconscionable to argue that our anti-poverty interventions fail.
And yes, I know that facts are on the run these days. But the reason this issue is uniquely important is that we’ve actually applied social science and tried to do something useful in this space. That is, scholars in poverty and tax policy have documented the benefits of these (and other safety net) programs, and have worked to expand them with the predicted results. So to ignore such results and claim “government doesn’t work!” is willful ignorance.
To be clear, none of this is to say we’ve solved poverty. Events and subsequent analysis of developments up the road in Baltimore in recent weeks will quickly disabuse you of any such ideas. In fact, we need to learn more about “what works,” specifically in the space of helping distressed areas.
One thing we know works is to help people get out of those areas, but no one believes that is sufficient. What I’d like to see us try is direct job creation. When the credit and financial markets fails, it’s widely accepted that the Federal Reserve is the lender of last resort. So how about when the job market persistently fails to provide gainful, living-wage opportunities, the government steps in as employer of last resort?
In the meantime, when you hear someone assert that we’ve lost the “war on poverty,” please tell them that you know the facts, and they’ve just lost the war on truth.