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Government’s War on Poverty: Helping or Hurting?

(Photo by Mario Tama/Getty Images)

In the 1960’s President Lynden Johnson came up with the idea, for what he called, “The Great Society.” It was partially modeled after John Kennedy’s “New Frontier” program that stalled during his term.

The principle goals of the Great Society were the elimination of poverty and racial injustice. Following the assassination of President John Kennedy, Johnson was swept into office along with the most liberal House of Representatives since the New Deal, post depression year of 1938.

Voters at the time were fed up with spending money on the Vietnam War and felt the money spent there could be better used here at home. Sound familiar? So a host of programs were introduced to fight the injustices Americans were experiencing during that time frame.

Tax Cuts for the Rich to help the poor

Kennedy had proposed a 20% tax cut of the top rate from 90% to 71% and Johnson got it passed in 1964. In 1965 there were 25 tax brackets. Starting at 14% for earnings up to $1,000 to 70% on income above $200,000. If you were lucky enough to make $12,000 in 1965 you owed about ¼ of that income to Uncle Sam.

The plan also reduced the income tax rates for lower incomes and the middle class as well as American corporate rates. The results of those early tax cuts were pretty amazing. The US experienced a 10% increase in GDP the first year of the cuts along with a 4.5% increase in economic growth from 1961 to 1968. Since the populous had more money in their pockets instead of IRS’s pocket, disposable income rose 15% in 1966. Don’t feel too bad for the IRS — they made out too.

More Taxes or More Taxpayers?

Lower taxes and lower corporate tax rates were proven to provide prosperity for both government and the average worker. Between 1961 and 1967, federal revenues jumped from $94 billion to $150 billion. Between 1965 and 1980 more than two and a half times more Americans joined the labor force than the 15 pervious years. Things were going so well that both Ford and Nixon continued the programs.

So what happened?

Fast forward 30 years or so to the 1990’s and what do we find? More people than ever are relying on some form of public assistance. Welfare families are starting to collect for the third generation. For the first time in history, children grew up in families knowing only welfare. Long forgotten is JFK’s famous, “Ask not what your country can do for you… quote” We have officially entered the entitlement age. “Brother can you spare a dime,” has given way to “Brother you OWE me a dime.” Government, in spite of their good intentions, has created a society that now looks to government for the answer to any of life’s many problems. Fortunately, private enterprise and personal responsibility offer a much better solution.

Community Organization Done The Right Way

Here is an example of how things can be done without government handouts from a local Bozeman community volunteer:

“I volunteer at a charity with this exact thought. (Family Promise in Bozeman) The homeless families are given everything they need (via charity, not government), food, housing (church basements), haircuts, phones, gas cards, used cars in some cases, job help, resume’ help, budgeting, child care, etc. — The catch? It’s only for 12 weeks.

They have to save every penny they make (they are living free for 12 weeks), both parents get jobs, and at the end of 12 weeks you have enough saved for your deposit, first months rent, some savings, a job, budgeting skills, family skills, and a new outlook on life. The families are grateful, but at the 11-week point they are ready to be on their own (move to a new church each week).

It ensures they get the skills they need without getting comfortable in their homelessness/joblessness. You get rid of poverty by educating people — oh, and this program — all volunteer run and paid for by community members with giving hearts. No government needed. Rest my case.”

More Local Efforts

A vacant restaurant in Bozeman has been turned into a free eating establishment for anyone who wants to go there. No government cards to show, no qualifying income, just come on in and grab a seat. Volunteer servers will see to your meal that has been donated by other restaurants and local super markets. Food that might ordinarily be thrown is being used — thanks to the efforts of a few unelected people who just want to help out.

Tax or Subsidize?

One of the earliest rules of government says, “If you want more of something, subsidize it; if you want less of something tax it.” We are currently entering our 50th year in the War on Poverty. Are we better off than we were 50 years ago? So far we’ve managed to cut poverty by how much??

Billions of dollars, millions of people, countless congressional votes and promises, with little to no negligible change in the poverty rate. Government has been given every chance to help the poor and underprivileged and failed miserably. I think it’s time for them to take their ball and go home. The grownups will take it from here.

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