Tuesday, August 28, 2007

Just give them the money?

How much does the Federal government spend on programs to help poor people every year?

According to the National Priorities Project, 14% on "income security" and 4% on "education, training, employment and social services."

18% of 2 trillion dollars (the total Federal budget) is 360 billion dollars.

That's a darn convenient number-- the total number of people below the poverty line is about 36 million (according to the census bureau). Divide dollars by people and you get a nice, even $10,000 spent for every man, woman, and child under the poverty line. $40,000 for a family of 4, $30,000 for a family of 3, $20,000 for a family of 2.

Which is pretty astounding, considering:
the weighted average poverty threshold for a family of four in 2006 was $20,614; for a family of three, $16,079; for a family of two, $13,167; and for unrelated individuals, $10,294.
Why isn't it as simple as:
1. Everybody fills out an income tax form.
2. If your income is below the poverty line, then the IRS sends you a check to make up the difference, including any taxes you had to pay.

Then we can argue about where the poverty line should be drawn, and whether it's moral to increase the poverty line for people lucky enough to be born US Citizens (or lucky enough to manage to immigrate here) from $10,000 to $12,000 when most of the world's population survives on less than $1,000 per year.
UPDATE: I asked the National Priorities Project what "Income Security" means, and it is NOT all for helping poor people. It's:
Income security is a 'function area' defined by the federal government that includes general retirement and disability insurance (excluding social security); federal employee retirement and disability; unemployment compensation; housing assistance; food and nutrition assistance; and some other stuff (e.g. TANF, child care, foster and adoption services, supplemental security income).

1 comment:

Gavin Andresen said...

Before somebody else says it: we don't just give them the money because that would create huge disincentives to actually do any productive work. Why earn $8,000 per year and get $2,000 for free if you could instead earn $0 and get $10,000 ?

Still, it seems like we should be able to come up with a more efficient way of getting money to the people who really and truly need it...