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J. Scott Applewhite, Associated Press
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Paul Ryan declares war on poverty a bust, says programs create a trap

Federal health care, nutrition and education programs have been a failure over the last 50 years, says House Budget Committee Chairman Paul Ryan in a statement earlier this week that critiqued Lyndon B. Johnson's landmark program.

The country's poverty rate has fallen only 2.3 percentage points since 1965, according to the report, based on information from the Congressional Budget Office. Ryan's report lists what it says are 92 redundant federal programs for food aid, housing and education that have cost a total of $799 billion. It says that the Head Start program, an Obama administration priority, "is vulnerable to fraud," and that Medicaid has "little effect on patients' health." Food stamps have a "modest effect" on poverty, it says, and discourage work.

"Washington is making the poverty trap that much worse" by giving people incentives to stay at home or cut back their hours, keeping them from the "ladder" to economic success. “The effect will be severe — as if 2.5 million people had stopped working full-time by 2024,” Ryan said.

Democrats say that the GOP has misread the information. House Budget Committee ranking member Rep. Chris Van Hollen was visibly angered by Ryan's argument, reported thehill.com. Van Hollen said the CBO report really finds that workers will have increased choices with the health care act.

“That is not a bad thing. It’s a good thing,” he said. “What is bad is the lack of available jobs today.” Van Hollen then attacked House Republicans for not extending federal unemployment benefits that expired late last year. He said Congress should take steps to stimulate the economy, both by extending the benefits and boosting infrastructure spending. Evidence suggests that welfare-state programs enhance social mobility, says Paul Krugman of the New York Times. Safety-net programs provide things like poor children having adequate food and medical care. "I mean, think about it," writes Krugman. "Do you really believe that making conditions harsh enough that poor women must work while pregnant or while they still have young children actually makes it more likely that those children will succeed in life?"

1. The so-called “war on poverty” has gone better than most of this document would appear to suggest, although this ends up being acknowledged in the appendix on poverty measures.

2. High implicit marginal tax rates are a problem for poor families, but they receive too much attention in this report. Those same high implicit rates never stopped higher earners, who at some point were (often) much poorer themselves. Furthermore, without some assumption of dysfunctional behavior, high implicit marginal tax rates will hurt society but should not hurt lower earners per se.

3. There is an implicit ranking of programs as good or bad. If a program is ranked as bad, there is a cataloging of its cost, but this is not compared to potential benefits, even granting that net cost is positive.

4. Two things that work to cure poverty are immigration and cash transfers. These points should be stressed more. More generally, not much of an analytical framework is imposed on the material. And the discussion of barriers to advancement is extremely thin. Collapsing families surely constitute an important issue, but reading the discussion of that topic yields precious little knowledge, not even “false knowledge.”

- See more at: http://marginalrevolution.com/marginalrevolution/2014/03/the-new-paul-ryan-report-on-poverty-and-safety-net-programs.html#sthash.g6bqYohv.dpuf

1. The so-called “war on poverty” has gone better than most of this document would appear to suggest, although this ends up being acknowledged in the appendix on poverty measures.

2. High implicit marginal tax rates are a problem for poor families, but they receive too much attention in this report. Those same high implicit rates never stopped higher earners, who at some point were (often) much poorer themselves. Furthermore, without some assumption of dysfunctional behavior, high implicit marginal tax rates will hurt society but should not hurt lower earners per se.

3. There is an implicit ranking of programs as good or bad. If a program is ranked as bad, there is a cataloging of its cost, but this is not compared to potential benefits, even granting that net cost is positive.

4. Two things that work to cure poverty are immigration and cash transfers. These points should be stressed more. More generally, not much of an analytical framework is imposed on the material. And the discussion of barriers to advancement is extremely thin. Collapsing families surely constitute an important issue, but reading the discussion of that topic yields precious little knowledge, not even “false knowledge.”

- See more at: http://marginalrevolution.com/marginalrevolution/2014/03/the-new-paul-ryan-report-on-poverty-and-safety-net-programs.html#sthash.g6bqYohv.dpuf

Email: laneanderson@deseretnews.com