by Joseph Coletti
Senior Fellow, Fiscal Studies, John Locke Foundation
My colleague Jon Sanders wonders whether policies to help the poor actually help, finds that “policy is a small part of the overall social equation,” and concludes that the most effective ways to reduce poverty are free enterprise and voluntary action. Jon recommends ending policies that get in the way of private actions that can help somebody escape poverty.
Poverty has proven difficult to define and measure in a way that can help set a course for people to escape. There is general agreement that “poverty is not just a lack of money,” it is also a lack of autonomy and dignity, which point back to personal and social causes beyond the reach of law. Official measures of poverty focus on pretax earnings, and so provide a picture of economic self-sufficiency but miss the effect of government efforts, such as the earned-income tax credit (EITC), food stamps, and other programs to alleviate the symptoms of poverty, particularly for seniors and children. The EITC is the only program that provides actual cash to people, beyond that are separate in-kind services programs for housing, food, health care, child care, education, job training, and utilities.
Peter Schuck provides a terrific summary of the questions of poverty in the current issue of National Affairs [subscription]. A growing economy helps, but Schuck concludes, “Eliminating the entrenched poverty that remains…will require an honest discussion about what truly causes poverty and what it will take to further reduce it.” In addition, those who would remove government from providing assistance must endeavor first to replace government by providing assistance themselves.