Monday, January 27, 2014

The Real War on the Poor

There is a war being waged on the poor in America. Here are some key attacks:

1.) Create high implicit marginal tax rates through means tested programs that were, ironically, created to reduce poverty.

2.) Create barriers to low wage, entry level employment like high minimum wages and employer health benefit mandates.

3.) Create barriers to business creation by implementing draconian occupational licensing laws that create a huge barrier to entry for poor people.

4.) Wage a war on drugs that unfairly targets poor people. The same poor people who have an extremely difficult time navigating the court system if they are a victim of this war.

5.) Instead of using anti poverty public dollars to give direct cash transfers to the poor on the condition that they are either working or seeking employment, direct the dollars towards "feel good", paternalistic programs for things like health care and education that require nothing in terms of work and are proven to do nothing to actually improve health or educational outcomes in the long term (Head Start and Medicaid).

These policies, not modest reductions in the growth rate of anti poverty programs that actually don't do much to help the poor, are the real public policies that are hurting the poor. Remember that next time you hear a politician talking about anti poverty policy.

Update: In case my implication wasn't clear, President Obama is guilty of hurting the poor by worsening #1 (expanding Medicaid and creating means tested subsidies through Obamacare), #2 (mandating health insraunce with employment and proposing raising the minimum wage), and #5 (expanding Medicaid, SCHIP, and trying to create new education programs).

President Obama has also been similar to previous administrations in doing nothing to change #4. I'll give him a break on #3 where state and local governments deserve most of the blame.
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