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Liberal Democracy

Liberal Democracy
The Free State

Monday, October 25, 2010

Brittle 13: Milton Friedman- Responsibility to the Poor





Source: Brittle 13- Professor Milton Friedman-
Source: Brittle 13: Milton Friedman- Responsibility To The Poor


In the 1930's, the FDR Administration had an agenda called the New Deal.  They passed a lot, if not most, of it.  It included legislation designed to help the lower and middle classes in America.  Before this, America didn't have a safety net, assistance for people who fell through the cracks of American capitalism and needed temporary financial assistance. It included legislation like Social Security so people who were too old or no longer physically and mentally capable of working would have a source of Income that they could rely on.  It also had welfare to provide financial assistance to people who didn't have the skills to support themselves.

In 1965, when over 1 in 4 Americans lived in poverty, President Lyndon Johnson announced the "War on Poverty."   It had an  agenda for a 
Great Society with legislation like Medicare which guaranteed senior Americans medical insurance, public housing so low-income people could afford housing, Medicaid so low-income people would be guaranteed some medical insurance,  aid to public education such as Head Start and other social welfare programs for the needy in American society.

Almost eighty-years later, after the New Deal, Great Society, and every other social welfare program created by the Federal Government, poverty is still a big issue in America.  Today, almost 1 in 5 Americans lives in poverty.  The so-called War on Poverty and its forbears have come well short, despite all of the good intentions behind them.  They haven't solved the problems because these social welfare programs were  improperly designed. They subsidized low-income people indefinitely (hoping their low-income would go away) instead of dealing with the causes of their low-income. 

Government's responsibility to the poor is pretty simple (though poverty as an issue is as simple as the Middle East peace process) but the problems can be handled simply by empowering the poor to get themselves out of poverty and into the middle class so that they are self-sufficient. 

The only viable path out of poverty is temporary, not indefinite, financial assistance so that people have income while  making the transition to self-sufficiency. 

Education is key so that people can finish their high school education and get a diploma or GED.  Beyond that,  college and vocational schools provide skills for good jobs and self-sufficiency.  Then, assistance with job placement can move low-income people from the welfare class to the working class.

The good news is that there's experience in empowering low-income people to be self-sufficient. In 1996 the 104th Republican Congress and President Clinton, back when Republicans and Democrats actually worked together for "the good of the country," passed Temporary Assistance for Needy Families (
TANF), better known as "Welfare to Work"  It took this approach by reforming welfare, transforming it to a temporary, instead of indefinite, financial assistance program.

No longer are low-income people  stuck in a "Culture of Dependency."  People on Welfare are 
provided an opportunity to get themselves an education and job training to get the skills they need to get a good job. TANF also provides job placement assistance.  Almost fifteen-years later the results are in and look very good. Millions of people who were once on welfare have moved from the welfare class to the working class. 

Poverty is not a simple issue but it can be reduced by simple solutions and investments that might seem expensive at the time but pay off in the long term by moving people from the welfare class to the working class and making them taxpayers, perhaps, for the first time in their lives. We need to go back to the future and return to this approach, especially, now, when almost 1 in 5 Americans live in Poverty.