Troy Senik
Staff Writer
“For ye have the poor always with you” said Christ to his disciples in Bethany. Two thousand years later, it’s hard to argue the point. The United States, bathing in the radiance of the most robust economy seen in human history, knows both homelessness and hunger. More than 40 years have passed since President Lyndon Johnson’s promise of an “unconditional war on poverty” as part of his broader Great Society agenda. The result: $9 trillion in federal spending and no significant change in national poverty rates.
Reflexively partisan solutions to the problems of poverty do not offer much hope either. Most conservatives end the discussion at dismantling the welfare state.
To the extent that Republicans entertain ideas of actually aiding the indigent, it generally feels like a capitulation to a socially acceptable standard of compassion. Think of it as the “Love Always” closer on a Dear John letter.
Liberals, on the other hand, live out what Alcoholics Anonymous posits as the very definition of insanity: doing the same thing over and over again and expecting different results. With a generation’s worth of government largesse having failed to keep the heads of the impoverished above water, more spending and more government programs are held onto as the Democrats’ leaky lifejacket of choice.
The primary policy solution extended by 2007’s incoming class of Democratic leaders is an increase in the federal minimum wage, a plan with rhetorical nobility that is outflanked only by its pragmatic failures. By increasing the costs of labor to business, a minimum wage invites cost-cutting by pruning a company’s least productive employees.
The usual victims of such financial triage, of course, happen to be those same minimum-wage laborers. Moreover, those who survive the purge tend to be those least likely to stay in minimum wage positions for long, namely teenagers from middle to upper class families, usually working at their first jobs.
Thankfully, the federal government has not proven totally inadequate. Two programs in place genuinely help the disadvantaged. First among them is the Earned Income Tax Credit, which acts as an annual government stipend to the poor. The EITC rights two of the wrongs of the welfare system, through a structure that actually allows for higher payments for more work (thus eliminating the perverse incentives of welfare) and through bypassing the leviathan of welfare’s bureaucratic construction (which actually costs three times more annually than cutting checks to bring every American above the poverty line).
The second helpful policy is government-provided job training that allows workers who are displaced by the dynamics of a market economy to reenter the work force with the skill set necessary to find stable employment.
Two new solutions, however, could increase the standing of the poor even more. The first would be to eradicate what is known as the “Warranty of Implied Habitability.”
Translated from its native legalese, this is simply a common law policy that requires apartment owners to provide certain standards of living, without giving renters an opportunity to opt out of the government criteria. By artificially increasing the price of housing, the warranty provides one of the foundational sources of homelessness in America.
Finally, the Earned Income Tax credit should be replaced with a “negative income tax.” This system, combined with a federal flat tax, would have every American receive the same flat amount from the government annually (say $15,000) and then pay a percentage of their pre-benefit income in taxes. Thus if someone earned only $20,000 a year, and the flat tax rate was 25 percent, they would pay $5,000 in taxes, but still end up with a post-tax income of $30,000 because of the credit, leaving them $10,000 better off on balance.
This system would aid the poor, have virtually no effect on the wealthy and allow the nation to help the poor without the complicated labyrinth of the welfare bureaucracy.
The poor may always be with us, but a society that joins a warm heart with a discerning mind possesses the potential to make their burden the least onerous in history.
11-02-2006