Friday, October 22, 2004

Effect of Federal Spending on Poverty

Does government spending have any effect on poverty?

The associated chart shows that poverty was declining very well until, oh, about the time Johnson commenced the War on Poverty. It has been more or less flat since, mostly trending up and down with expansionary and recessionary periods. Or, more specifically, the percentage of people living under 125% of the government poverty threshhold have been fluctuating but mostly flat. Yet real, per capita government spending has been increasing during that entire period, and rather dramatically. To find the per capita costs, I divided by the entire population, but realistically the money is being spent on a much smaller group of people, so these are drastically understated figures (approximately $4840 per person spent in 2003).

The spending is a statistic tracked in the Statistical Abstract as "Human Resources" (HR), corrected with BLS data to 2004 dollars and divided by census population data, and the poverty numbers are from http://www.census.gov/hhes/poverty/histpov/hstpov6.html. These figures only reflect the quantity of spending and say nothing about the quality of the spending.

As you can see in the other charts, spending increases under both Bushes typically exceeds that under Clinton and Carter. In fact, it was flat under Carter, and the Clinton era looked like the Reagan era. And, as always, Congress is a primary factor to consider.

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