Standstill in the ‘War on Poverty’

Fifty years after President Johnson’s campaign to battle poverty, the “American dream” of modest prosperity remains unfulfillable for every sixth American.

In his first State of the Union address, Lyndon B. Johnson made a bold announcement: “This administration today, here and now, declares unconditional war on poverty in America. It will not be a short or easy struggle, no single weapon or strategy will suffice, but we shall not rest until that war is won. The richest nation on earth can afford to win it. We cannot afford to lose it.”

Half a century and more than $22 trillion in welfare spending later, one must — staying in the martial metaphor of Johnson — declare a standstill in trench warfare. Since 1964, the poverty rate has sunk from more than 20 percent to, most recently, around 16 percent. In spite of all the hardships, anyone who is poor in the U.S. today enjoys a higher standard of living than he would have in past decades. And differently from 1964, there is at least minimal nationwide medical care for the poor, chronically ill and elderly, thanks to Johnson’s sociopolitical reforms. Robert Rector, a researcher for the conservative Heritage Foundation, writes in a contribution to The Wall Street Journal that the public hand of the federal government and the 50 states spends 16 times more on social services (adjusted for inflation). Around 1 million Americans currently receive one form or another of social services, from tax credits for childcare to public housing.

Little Upward Mobility

No one on the left end of the political spectrum, however, speaks of a total success in the fight to open the door to at least modest prosperity for every American. Poverty in the U.S. is — as in all industrial nations — a persistent problem that in many places is passed from generation to generation. And upward mobility is becoming more and more difficult. The demise of numerous industries in manufacturing since the fall of the iron curtain and the real globalization of the economy has robbed poorly trained workers of the chance to work their way up to the middle class at an assembly line in Detroit or a furnace in Pittsburgh. But instead of increasing expenditures for education to arm Americans for the challenges of a globalized world, primarily Republican politicians have drastically cut spending for education since the mid-1970s.

Insidious Tax System

The “American dream” was always a cliché. Now it is practically unfulfillable for the poor. This is also due to the pitfalls of the American tax system. Cities and communities here are especially heavily dependent on income from property taxes. These are, however, different from those in Austria, for example, which are measured by current market value. If it drops in the course of a recession because the demand for real estate declines, the available budget resources shrink immediately in those communities that would need to invest heavily in schools, childcare and the training of the unemployed.

In addition, the most recent recession robbed millions of middle-class Americans of their jobs. To be sure, the unemployment rate is once again approaching the figure from before 2008 — but the employment rate is at the lowest level since the end of the ‘70s, and many of the new jobs are very poorly paid. It is inconceivable that America’s poverty rate will soon sink to the historic low point of just over 10 percent; that was last achieved in the boom years of the ‘90s.