Tuesday, October 18, 2011

Unbreaking news: Poverty [update 8]

Unbreaking news, i.e., news that never changes:

UPDATE23 percent of NZ babies born in 2010 were reliant on a benefit by the end of that year. In April this year, NZ children reliant on the DPB numbered 180,845--75% of them, around 135,600, living below the poverty line. If the Child Poverty Action Group is to be believed, as recently as 2008 (before the Great Financial Crisis began) at least one in five children in New Zealand was living in poverty while 185,000 were living with severe or significant hardship. Things now are, presumably, much worse. “The underclass is still growing,” admits the PM.

It’s said “The poor will always be with us.” Why?

It’s not like there hasn’t been plenty of money, yours and mine, thrown at the problem. Welfare, including Super, accounts for one third of government expenditure. In 2006 Treasury forecast welfare expenses in 2010 would be $18.975 billion. They under-forecast by over $2 billion.

If all of the expenditure that relates to working age welfare is totalled the sum last year was $9.379 billion. Divide that by the number of working age beneficiaries at June 2010, 300,000, to get an average sum of $28,165…  Now I know I am labouring a point here but an average income of $519 per week does not describe abject poverty.

We have more people on benefits now that at any time in the country's history, more than 330,000 of them (largely due to the Welfare for Working Families package, which has suckered many middle class families into becoming beneficiaries). The welfare state, which was going to solve poverty, is bigger than it has ever been before. It has  been spending like there’s no tomorrow now for decades, and it obviously hasn't solved poverty at all.

Not, at least, as poverty is defined by the advocates of the welfare state.

What's to be done?  Beats the hell out of Paula Bennett, who massages new figures and re-announces old policies while judging her success by the extent her department keeps out of the headlines.  Beats the hell out of Labour spokesthings who, under their previous watch, increased both the numbers on welfare and numbers under the “poverty line.” It beats the hell out of the Child Poverty Action Group themselves, who tell us every year (against everything history and research should tell them) that all we need to do to beat poverty is to raise benefits; it beats the hell out of alleged economist Susan St John, who (with a straight face) continues to blames the problem on policies that "promote paid work as a way out of poverty" which are, she says, "a major reason for the widening gap between rich and poor"; and it sure beats the hell out of the rest of the poverty industry who've been fighting this “War On Poverty” since Methusaleh was born, yet after all that time they still find the scoreboard against them.

Shouldn't they be asking themselves some serious questions about now?  Or are the poverty industry and the politicians happy to accept that "the poor are always with us" simply because they're convenient voting fodder to keep the same old game going on.

Seventy years of just giving people more money has not made things better, it's made them worse. In the last ten years alone around $180 billion has been taken from taxpayers and spent in a war on poverty, that's one-hundred and eighty billion dollars on a war that no one is winning; not the government, not the taxpayer, not the 200-330,000 or so who've been the targets of this war over the last ten years.

That's $180,000,000,000 in ten years -- enough to have given every beneficiary in the country a massive half-million dollars each each to start their own war on poverty, and it still hasn't worked. And it won't. It never will. To paraphrase PJ O'Rourke,

the spending of this truly vast amount of money -- an amount more than half again the nation's entire gross national product in 2001 -- has left everybody just sitting around slack-jawed and dumbstruck, staring into the maw of that most extraordinary paradox: You can't get rid of poverty by giving people money.

When do we realise that government welfare doesn't work, least of all for those who it is supposed to help.

We are all worse off for this war—all worse off except for the politicians, for whom this massive sum spent on cheap lobby fodder amounts to very cheap and efficient vote-buying.

Let's try something else instead.

UPDATE 2:  Comment by “Rebecca” at Red Alert:

In 2006, $1.5 billion of Working for Families tax credits were paid out to 159,000 people. By 2009, this had risen to $2.7 billion paid out to 419,200 people. [Ref: http://www.treasury.govt.nz/budget/2011/fsr/b11-fsr.pdf]
In 2004 Child poverty was 23%. It dropped to 16% in 2007 then increased to 20% in 2008. All despite WFF. Any increases means it is not working. [Ref: http://www.everychildcounts.org.nz/]
There is only one reason for the majority of the poverty in this country: people have more children than they can afford to raise on their own merit.
The minimum wage is a liveable wage for a single person and the average wage most certainly covers the cost of living for the average person.
When people choose to bring children into the equation they choose to bring in children that they will not be able to provide the necessities of life for.
This is wrong….”

UPDATE 3: The poverty excuse is a cop-out – Lindsay Mitchell

UPDATE 4: How Prosperity Generates Poverty – Paul Trescott

“The occupants of the poverty cohort are a very diverse crowd. But there are two substantial components which, in very different ways, are in significant degree larger because the economy is more prosperous.

1. A significant fraction of the … poor are "in transition"… [Those with] a work ethic, look for work, and generally find work. As a result, most of them do not remain poor…
2. A very different component of the poverty cohort consists of the people whom Charles Murray has labeled "the underclass." These are people who make life-style choices which produce almost-certain poverty… The underclass are subsidized in many ways by our prosperous society…”

UPDATE 5: What’s Wrong with the Poverty Numbers – Robert Murphy

“There are dozens of plausible measures of income, each including some factors while excluding others, and differing in the treatment of medical expenses, child-care expenses, and so on. There is really no way to single out one of the measures as “correct,” and that’s the point: If one wants to paint a picture worse than the official statistics, one can construct measures that imply a higher rate of poverty…
”Perhaps our society would experience a tremendous reduction in poverty if only our government would stop spending billions of dollars subsidizing it. Currently the government tells its citizens: “Tell you what. If you agree to make under $10,000 or so a year, we’ll give you a bunch of money and other goodies.” As Murray Rothbard put it, we can have as many poor people as we’re willing to pay for.”

UPDATE 6The Poverty Hype – Walter Wiliams

“Despite claims that the rich get richer and the poor get poorer, poverty is nowhere near the problem it was yesteryear -- at least for those who want to work. Talk about the poor getting poorer tugs at the hearts of decent people and squares nicely with the agenda of big government advocates, but it doesn't square with the facts.”

UPDATE 7:

“Poverty is not a mortgage on the labor of others—misfortune is not a mortgage on achievement—failure is not a mortgage on success—suffering is not a claim check, and its relief is not the goal of existence—man is not a sacrificial animal on anyone’s altar nor for anyone’s cause—life is not one huge hospital.”
                          - Ayn Rand, “Apollo 11”

UPDATE 8:

“Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded -- here and there, now and then -- are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right thinking people. Whenever this tiny minority is kept from creating or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.”
                         - Robert A. Heinlein

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14 Comments:

Anonymous Hal Incandenza said...

So there IS poverty now! In the previous post you admitted the welfare state had eliminated it. God, make your minds up. Can't have it both ways (as much as you would like that). Either the welfare state has created poverty or it's created wealthy bludgers. You guys need to get your talking points sorted.

10/18/2011 06:19:00 pm  
Anonymous Craig said...

The welfare state has transferred enormous amounts of wealth, so there is no poverty of resources. There is however, a social poverty caused by the welfare state. All the symptoms of a welfare state are predictably awful among welfare beneficiaries - poor education results, 3rd world diseases, high crime rates, high rates of single teen parenthood and high rates of child abuse.

The welfare state also keeps people relatively poor (which is the left's definition of poverty) as it reduces their options to improve their lot.

If there is a contradiction, it is because the left define poverty as a relative measure (meaning if a billionaire moved to New Zealand it would increase poverty by this measure). Whereas real (not relative) poverty is something you will not find in New Zealand.

But this point was clearly made in the original post. Something Hal seems determined to ignore.

10/18/2011 08:09:00 pm  
Anonymous Hal Incandenza said...

"The welfare state also keeps people relatively poor (which is the left's definition of poverty) as it reduces their options to improve their lot."

You present no evidence to demonstrate this. Facts suggest the opposite.

"Whereas real (not relative) poverty is something you will not find in New Zealand."

So the welfare state HAS eliminated poverty then! Is that your final answer? I hope you guys are going to campaign on bringing it back!

10/18/2011 08:42:00 pm  
Anonymous Craig said...

Crime, teen single parents, poor educational outcomes, 3rd world diseases and high rates of child abuse are the result of years of state welfare. These are researched facts that are all over Lindsay Mitchell's blog so I won't repeat them here. People in employment on lower incomes than beneficiaries don't have these same outcomes.

If you are actually concerned with outcomes for people, the welfare system is an absolute disaster. There is also no suggestion that removing the welfare system will bring about poverty. It will however, mean people will have to start taking responsibility for their life decisions. It will also free up the productive sector to actually produce more which is the only way to actually raise the standard of living.

10/18/2011 09:07:00 pm  
Anonymous Hal Incandenza said...

"Crime, teen single parents, poor educational outcomes, 3rd world diseases and high rates of child abuse are the result of years of state welfare."

Or reductions in welfare provision during periods of right wing governments and high unemployment.

"There is also no suggestion that removing the welfare system will bring about poverty."

Dear oh dear. How do you know this? Where is you evidence? Where has this occurred successfully before? I thought you people were supposed to accept the facts of reality?

10/18/2011 09:51:00 pm  
Anonymous Craig said...

"Or reductions in welfare provision during periods of right wing governments and high unemployment."

Why is it that people on lower incomes (than people on benefits) who are in paid employment do not have these levels of negative social statistics? It is not about income, it is about welfare.

10/18/2011 10:51:00 pm  
Blogger Callum said...

"Or reductions in welfare provision during periods of right wing governments and high unemployment."

So giving people money, regardless of what it is spent on, regardless of whether there is genuine need for the money, and regardless of individual efforts to get themselves out of poverty, mysterious makes these problems disappear?

The fact is, (as has already been said) these stats are far better for poor people from working homes than those on wealthy, even if the working people are poorer; and this cannot be explained by "poverty". It is a very naive and wrongheaded assumption to assume that just throwing money at a problem is going to make it go away, and, even with ample government resources available, clearly these problems remain. While the left claims that poverty is the problem in NZ that leads to all others, it is clear that enough resources are used to make it a thing of the past. So why does it still remain?

Oh, right. "Right-wing governments", as though they actually made genuine cuts.

10/18/2011 11:10:00 pm  
Anonymous Craig said...

"Dear oh dear. How do you know this? Where is you evidence? Where has this occurred successfully before?"

Dear oh dear. It's not up to me to prove a negative. You are the one making the claim that removing welfare will result in massive poverty - prove it.

What I will claim is that an economy needs to unshackle the productive so they can produce more and this will raise the overall standard of living in an economy. Evidence: Singapore - low tax, low welfare, growing economy.

10/18/2011 11:15:00 pm  
Anonymous Hal Incandenza said...

"It's not up to me to prove a negative."

You're saying that abolishing welfare will not result in poverty. I'm not asking you to prove a negative, just asking you for evidence of why this is so. Obviously you can't provide any.

In this welfare-free nirvana will there be any gun control? When you abolish taxation how will you pay for law enforcement and prisons? Just trying to get a picture of how this world is going to look.

"...it is clear that enough resources are used to make it a thing of the past. So why does it still remain?"

A false premise there my friend. In answer to your question, you're getting in a terrible muddle over correlation and causation. I think you get taught the difference in high school.

10/19/2011 07:26:00 am  
Anonymous Hal Incandenza said...

"You are the one making the claim that removing welfare will result in massive poverty - prove it."

Well Craig, to quote you:

"The welfare state has transferred enormous amounts of wealth, so there is no poverty of resources. "

Please try to keep up.

10/19/2011 07:45:00 am  
Blogger twr said...

There's no point continuing to try and argue logically with Hal, or Jol, or Judge, or whatever the troll is calling itself this week. It doesn't give a flying fuck about the "poor", all it wants to do is punish others for being successful, and suck the life out of those who actually want to get ahead. Just ignore it, it'll go away.

10/19/2011 01:31:00 pm  
Blogger Callum said...

"A false premise there my friend. In answer to your question, you're getting in a terrible muddle over correlation and causation. I think you get taught the difference in high school."

Oh, I see. So the left now accepts that spending billions of dollars in welfare each year has no effect on the level of poverty?

10/19/2011 01:43:00 pm  
Anonymous Hal Incandenza said...

"So the left now accepts that spending billions of dollars in welfare each year has no effect on the level of poverty?"

Ah nope. What gave you that idea. I'm not "the left" anyway, whatever that is. That's an odd thing to say.

Poor twr, you're very whiny. It's really most unattractive.

10/19/2011 06:25:00 pm  
Anonymous Mort said...

playing the man instead of the ball again Judge, perhaps you need to actually get an argument that makes sense, and will result in some form of overall improvement in outcomes.

10/19/2011 06:43:00 pm  

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