The Cycle of Poverty, Brought to You By the Government

The Obama administration wants to re-define poverty.

Under their new definition, the poverty line would be defined by reference to the income level of the bottom third of income earners.

This is deeply bizarre. So, if incomes went up dramatically, and EVERYBODY in that lower third made a million dollars a year, they would still be defined as “Poor”, so long as other people in the other two thirds made more.

In Obama’s world, objective reality does not count at all. The only thing that matters is where you stand vis-a-vis others. Clearly, this is just an excuse to redistribute wealth. They will take it away from the wealth creators and give it to the “poor”, no matter how wonderfully they are living.

Robert Samuelson in the Post:

…the administration’s proposal for a “supplemental poverty measure” in 2011 — to complement, not replace, the existing poverty line — goes beyond these changes. The new poverty number would compound public confusion. It also raises questions about whether the statistic is tailored to favor a political agenda.

The “supplemental measure” ties the poverty threshold to what the poorest third of Americans spend on food, housing, clothes and utilities. The actual threshold — not yet calculated — will almost certainly be higher than today’s poverty line. Moreover, the new definition has strange consequences. Suppose that all Americans doubled their incomes tomorrow, and suppose that their spending on food, clothing, housing and utilities also doubled. That would seem to signify less poverty — but not by the new poverty measure. It wouldn’t decline, because the poverty threshold would go up as spending went up. Many Americans would find this weird: People get richer but “poverty” stays stuck.

What produces this outcome is a different view of poverty. The present concept is an absolute one: The poverty threshold reflects the amount estimated to meet basic needs. By contrast, the supplemental measure embraces a relative notion of poverty: People are automatically poor if they’re a given distance from the top, even if their incomes are increasing. The idea is that they suffer psychological deprivation by being far outside the mainstream. The math of this relative definition makes it hard for people at the bottom ever to escape “poverty.”

The new indicator is a “propaganda device” to promote income redistribution by showing that poverty is stubborn or increasing, says the Heritage Foundation’s Robert Rector. He has a point. The Census Bureau has estimated statistics similar to the administration’s proposal. In 2008, the traditional poverty rate was 13.2 percent; estimates of the new statistic range up to 17 percent. The new poverty statistic exceeds the old, and the gap grows larger over time.

To paraphrase the late Sen. Daniel Patrick Moynihan: The administration is defining poverty up. It’s legitimate to debate how much we should aid the poor or try to reduce economic inequality. But the debate should not be skewed by misleading statistics that not one American in 100,000 could possibly understand. Government statistics should strive for political neutrality. This one fails.

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