Charlie Leonard: Drawing the line on poverty
September 22, 2011
The U.S. Census Bureau reported last week that more than 46 million Americans are now “living in poverty.” That’s one out of every six or seven people in the entire country. If you think of this number in terms of households rather than individuals, that amounts to one out of every fourth or fifth family.
As someone who has traveled the length and breadth of this country, as well as many Third World countries, I immediately thought it’s simply not possible that 46 million Americans are “living in poverty.” And, after doing about 10 minutes of Internet research, my suspicions were confirmed.
It turns out the official “poverty rate” is based on “reported” household income. The official poverty scale makes no attempt to assess unreported income, goods and services exchanged through barter, or assistance provided by family members and charitable organizations.
The official poverty rate also fails to account for the approximately $1 trillion of “transfer payments” made by governments each year to assist people with income, housing, food, medical expenses, education and more.
For example, a family of four with a reported income of $22,000 would count as poor, even if they received housing subsidies, food stamps, free medical benefits and other forms of assistance that effectively lifted their annual income above $50,000 per year.
I sincerely believe most Americans, regardless of political affiliation, believe in a social “safety net” for the least fortunate among us. But I hardly think most Americans think that safety net should be extended to one in four or five of their neighbors.
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The fact of the matter is that we, as a country, are going broke. We are going broke either as a result of too much spending or not enough taxes – take your pick – but we are going broke just the same. Consequently, we need to have a real serious national conversation about who is really in need of government assistance, how much assistance they really need and how long they should be eligible for government help.
Two leading scholars at the Heritage Foundation, a conservative Washington, D.C., “think tank,” recently took a close look at the people the census concluded were “living in poverty,” and found that most had air conditioning, cable television, cell phones, DVD players, video games, automobiles, jewelry and other amenities that are more often associated with a middle-class lifestyle than an impoverished one.
What I concluded from this brief amount of research is that we need to develop a more realistic assessment of what genuinely constitutes poverty. The fact of the matter is that we do not have the resources to subsidize people who are actually living in poverty, as well as people who might be having trouble with the cable or air-conditioning bill. Moreover, we need to get the federal government out of the business of managing our anti-poverty efforts from Washington, D.C.
It is fundamentally wrong to say someone is living in poverty in the United States who has all of life’s basic necessities, plus a whole lot of modern amenities. Poverty should not be defined by a number you tell the IRS, it should be a measure of an individual or family’s ability to meet its basic needs (housing, food, medical), after accounting for government and charitable assistance.
I don’t know what the real poverty rate is in the United States, but I do know it’s much fewer than 46 million people. I also know that when we lump the actual poor in with people who have become part of an entitlement lifestyle, we lose focus and squander resources that should be going to people who are truly in need. I have no doubt, for instance, that if we redirected most of the current anti-poverty programs to disadvantaged children, the homeless and the disabled, we could actually improve lives rather than support lifestyles.
Last, it’s crystal clear to me that both measuring poverty and managing anti-poverty programs from Washington, D.C., is an abysmal failure. It’s simply impossible to measure the lifestyles of millions of Americans, or know what truly impoverished people really need, from a central bureaucracy in Washington, D.C. It’s time for the country to turn both tasks over to the states. By moving these government programs closer to the people, we would stand a much more realistic chance of actually figuring out who is truly deserving of help and what they genuinely need.
Charlie Leonard lives in Aspen. His column runs every other Thursday in The Aspen Times.
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