A Laffer-Curve Relationship between Welfare Spending and Poverty

It should be fairly obvious that most of the relationships like taxation and relief distribution are not linear. You don’t get less poverty for the more money you spend and after a point tax revenue declines as the rate down. This should be evident in the fact that in spite of massive manipulations of both relief and welfare neither has been able to create massive increases of revenue or free us from poverty. Yet there is the constant drumbeat to increase taxes and welfare in spite of the obvious destruction that taxes and welfare have created.

They say that insanity is repeating the same things over and over again and expecting a different result. Yet here we are.
As far as a I am concerned, victory in the war on poverty would be nobody needing the relief programs and the programs being shut down. Instead the programs expand and consume ever larger sums of money and effort, with little change in the results.

International Liberty

The welfare state is bad news. It’s bad for taxpayers and it’s bad for recipients.

It’s also bad for the economy since prosperity is in part a function of the quantity of labor that is productively employed. As such, government programs that lure people into dependency obviously reduce national economic output.

We can get a sense of how the nation is being hurt by reviewing some of the scholarly literature.

Writing for the Cato Journal, Lowell Gallaway and Daniel Garrett explore the relationship between redistribution spending and poverty reduction.

They start by pointing out that more welfare spending used to be associated with reductions in poverty. But when President Johnson launched his so-called War on Poverty and dramatically increased the level of redistribution, the link between welfare spending and poverty reduction substantially weakened.

…the real per capita cost in the United States of federal public aid rose…

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