Why does poverty exist in America?

• 17% of the population in the USA live in poverty. In some countries, as much as 97% of their population live in poverty. For over a century, we have been eliminating the roadblocks that have been keeping people in poverty in the USA. So why does it still exist? What keeps people living in poverty in the land of opportunity, bad judgement, shortcomings in character, addictions? The front running Democratic presidential candidates are claiming they will help the poor. Just what will these candidates do that hasn't already been done to help those people who can lift themselves out of poverty? Will they create federal handouts rather than a hand up? Do we want to travel the road of socialism in order to elinimate the 17% poverty rate in the USA? Or, is the USA already the ideal place where the common person can get ahead in life.

• Answer:

  Welfare is necessary in a nation that intentionally keeps a 5-6 percent unemployment rate. (When unemployment dips below this, inflation starts to grow, and the Federal Reserve contracts the money supply to bring both inflation and unemployment back in line). To tell welfare recipients therefore to just "get a job" is terrible economics, because it is literally impossible to reduce the unemployment rate to zero. In March 1987, the General Accounting Office released a report that summarized more than one hundred studies of welfare since 1975. It found that "research does not support the view that welfare encourages two-parent family breakup" or that welfare significantly reduces the incentive to work. Conservatives also accuse welfare of giving mothers an economic incentive to have more children. Ten major studies have been conducted on this issue in the last six years alone, and not one has found any connection between the level of payments offered and a woman's decision to bear children. The size of average welfare families is virtually the same as non-welfare families. Because the poor cannot afford well-funded lobbyists in Washington, they make easy targets for budget cuts. Between 1970 and 1991, individual AFDC payments have declined 42 percent in real terms. Today, AFDC takes up less than 1 percent of the combined government budgets. Meanwhile, corporate welfare is running $150 billion a year, three times the federal spending on AFDC and food stamps.