Subject: Welfare: Who REALLY Benefits? From: donblis160@aol.com (DonBlis160) Reply-To: donblis160@aol.com (DonBlis160) Newsgroups: alt.politics.economics Subject: Welfare: Who REALLY Benefits? Date: 1 Sep 1995 12:32:45 -0400 Organization: America Online, Inc. (1-800-827-6364) Message-ID: <427cjd$bn0@newsbf02.news.aol.com> Newsgroups: alt.politics.reform,alt.politics.economics Followup-To:alt.politics.reform The entire real-dollar increase in U.S. welfare costs since 1970 was used to pay administrators instead of to help the needy, a new study shows. Overall federal, state and local outlays for welfare rose 792 percent between 1970 and 1990. The cost of handouts and other real aid to recipients rose 149 percent. And as the poor fell deeper into poverty, a burgeoning welfare bureaucracy boosted administrative expenses by 5,390 percent, according to the study by a group called "Americans for Truth in Welfare Reform." It said annual per-capita costs of welfare went from $80 to $588 during the 20-year period, while the percentage of poor people in the total population remained almost constant. Although annual handouts increased 24 percent, government figures prove that the minimum amount needed to maintain a poverty-level standard of living rose 208 percent. "In terms of real dollars," the study concluded, welfare administrators actually doled out less money to welfare recipients in 1990 than was provided them in 1970. The report argued that public "outrage" about rising welfare costs, "though wholly justified, has been tragically misdirected" toward the welfare-dependent poor. Instead, it said, "The real 'welfare queens' -- those who use welfare to defraud taxpayers -- occupy welfare-bureaucracy executive suites rather than the roachy tenements or ratty hovels typical of the long-term poor..." The study was based on official government data in specific, identified tables from the 1973, 1983 and 1993 editions of the Statistical Abstract of the United States, an official publication of the Department of Commerce. The report included a detailed explanation of its calculations to make it easy for reviewers to evaluate. Americans for Truth in Welfare Reform said that although complete data was available for years through 1993, the 1970-1990 period was chosen as most representative, "and trends during those decades continue with little change." The report gave no address for its authors. I received a copy electronically from a private source after being told of its existence. Although the report begins with a presentation of raw official numbers from the Abstract, its analysis seemed most interesting and useful. Welfare spending, in the context of the report, is synonymous with what the Statistical Abstract calls "public aid," including Aid to Families with Dependent Children (AFDC), Supplemental Security Income (SSI), general assistance, and smaller programs to help the blind and aged. Findings: 1. Total federal, state and local spending for "public aid" was $16.4 billion in 1970. Through 1990 it rose to $147 billion, an increase of 792 percent. The numbers: 1970 $16,488,000,000 (a) ------ 1980 $73,000,000,000 (b) 343% 1990 $147,000,000,000 (c) 101% 1970 through 1990 792% Source: 1973 edition, table 460, page 286 and 1993 edition, table 578, page 368, abbreviated from now on as "73: tb.460, p.286; 93: tb.578, p.368." (Letters in parentheses at the end of each column key numbers used in calculations. To illustrate, $16,488,000,000 followed by (a) describes total welfare spending for 1970.) 2. The Abstract lists stipends and services (S&S) as a specific category of public aid including handouts, food stamps, medical care and drugs, psychiatric counseling, etc., actually delivered to recipients. Outlays for stipends and services rose 149 percent from 1970 to 1990. The data: 1970 $14,467,000,000 (d) --- 1980 $21,994,000,000 (e) 52% 1990 $36,047,000,000 (f) 64% 1970 through 1990 149% Source for spending data: 73: tb.498, p.308; 93: tb.605, p.381 3. In 1970, stipends and services (S&S) to recipients accounted for 87.7 percent of all welfare expenditures. In 1990, these amounted to 24.5 percent of total outlays. The data (000 omitted): Total S & S S & S Portion Pct 1970 $16,488,000 (a) $14,467,000 (d) 87.7% 1980 $73,000,000 (b) $21,994,000 (e) 30.0% 1990 $147,000,000 (c) $36,047,000 (f) 24.5% 4. Spending for administration was calculated by subtracting the costs of delivered stipends and services from total public-aid outlays. In 1970, administration was 12.3 percent of the total welfare cost. In 1990, administration took 75.5 percent. The next three tables show what this meant in budgetary terms. The data (000 omitted): Total Admin Portion Admin Pct 1970 $16,488,000 (a) $2,021,000 (g) 12.3% 1980 $73,000,000 (b) $51,006,000 (h) 70.0% 1990 $147,000,000 (c) $110,953,000 (i) 75.5% Admin Portion Admin Pct Increase 1970 $2,021,000 (g) ------ 1980 $51,006,000 (h) 2,424% 1990 $110,953,000 (i) 118% 1970 through 1990 5,390% 5. The ratio of administrative costs to stipends and services (S&S) rose from 1 to 7, where needy recipients received $7 for every $1 spent on administration, to 3 to 1, where bureaucracy got $3 for every $1 in delivered stipends and services. (000 omitted): Admin Costs S & S Ratio 1970 $2,021,000 $14,467,000 1 to 7 1980 $51,006,000 $21,994,000 2 to 1 1990 $110,953,000 $36,047,000 3 to 1 6. Average annual stipends were $1,061 per recipient in 1970 and $1,315 in 1990. The report calculated annual figures from monthly data in the Abstract: 1970 $88.40 x 12 months = $1,060.80 (j) 1980 $89.93 x 12 months = $1,077.96 (k) 1990 $109.60 x 12 months = $1,315.20 (l) Source for monthly data: 73: tb.498, p.308; 93: tb.604, p.381 The greater portion of the 149 percent increase in stipends and services was in services which the report said may be primarily intended to provide jobs for more social workers "or to increase the authority of the welfare establishment in realms of gender conflict, matrimonial disputes and childcare." 7. Although the number of public aid recipients rose 36 percent during the period, their percentage in the total population remained virtually constant. Recipients Increase Pct of Population 1970 13,304,000 (m) --- 6% (p) 1980 16,079,000 (n) 21% 7% (q) 1990 18,023,000 (o) 12% 7% (r) 1970 through 1990 36% Source for data on recipients: 73: tb.498, p.308: 93; tb.604, p.381. Total population data is at 93: tb.2, p.8 8. In 1970, U.S. welfare costs amounted to $80 for every American man, woman and child. By 1990, the per capita cost was $588. Spending on things other than stipends and services rose from $9.48 per capita to $443.94. Total Cost Admin Admin S & S Per Capita Share Cost Share 1970 $ 80 (s) 12.3% $9.84 $70.16 1980 $321 (t) 70% $224.70 $96.30 1990 $588 (u) 75.5% $443.94 $144.06 9. Welfare recipients in 1990 actually got less -- in real dollars for stipends and services (S&S) -- than in 1970. The next few tables show soaring bureaucratic expenses kept the poor from staying even with adjustments in the government's own definition of minimal subsistence. (The definition of minimal subsistence, the annual "poverty index," is sort of a Consumer Price Index (CPI) for the poor. Unlike the CPI, the poverty index "market basket" holds only basic necessities such as food and housing.) Stipends and services vs. the poverty index: Poverty Index Pov Index S & S Family of 4 Increase Increase 1970 $ 3,986 ---- ---- 1980 $ 7,719 94% 52% 1990 $12,293 59% 64% 1970 through 1990 208% 149% Source for definition of poverty: 73: tb.547, pg335; 93: tb.746, pg.474 Comparing stipends alone with poverty index increases shows more vividly how the poor fared as administrative costs soared: Stipend Stipend Poverty Index Increase Increase 1970 $1,061 (j) ---- ---- 1980 $1,078 (k) 2% 94% 1990 $1,315 (l) 22% 59% 1970 through 1990 24% 208% As bureaucracy bloomed and the poverty index rose, individuals, as well as families, also were pushed deeper into dependency. Poverty Index Stipend Differential Unrelated Individuals 1970 $1,954 $1,061 (j) 84% 1980 $3,843 $1,078 (k) 257% 1990 $6,121 $1,315 (l) 365% Source for definition of poverty: 73: tb.547, pg335; 93: tb.746, pg.474 Between the beginning of 1970 and the end of 1990, the poverty level climbed 208 percent. This means the price of an essential item that cost $1 in 1970 rose to $3.08 by 1991. Meanwhile, welfare stipends were increased by 149 percent. Thus, a welfare recipient would have had $2.49 in real dollars to purchase an item that cost $1 in 1970 at its 1991 cost of $3.08. (For the mathematically inclined, the formula for calculating the impact of inflation on prices is: original cost plus the inflationary factor times the original cost; in the foregoing, this would be $1 plus 208 percent times $1, or $3.08.) 10. In 1980 -- figures for 1970 were not available -- there was one social service worker for every 10 recipients. By 1990, it was one for every eight recipients. Workers Ratio 1970 not available 1980 16,079,000 (n) 10:1 (n/v) 1990 18,023,000 (o) 8:1 (o/w) The report said the Statistical Abstract has a fuzzy definition of "human services work" and does not distinguish between social service workers in government and those working in private agencies; thus the true ratio of public welfare workers to recipients could be one to four or one to five. 11. If 1980 administrative costs of public aid had been divided equally among all social service workers in the civilian economy, each would have received $32,079.25. If 1990 administrative costs had been similarly apportioned, each social service worker would have received $49,754.70. Welfare work -- what the federal government terms "human services work" -- is the fifth fastest growing occupation in the United States. Employment in this field is expected to grow by as much as 82 percent during the next 10 years. Social service workers employed in the U.S. economy: 1970 not available 1980 1,590,000 (v) 1990 2,234,000 (w) Source: 93: tb.647, p.409 Percentage of anticipated increase, 1990-2005: Minimum 59% Maximum 82% Source: 93: tb.645, p.408 Increase in the average annual compensation package of government employees in the 1970-90 period (included as an index to salary increases in the period when the cost of administering public aid rose by 5,390 percent): Compensation Pct Rise 1970 $ 8,813 (x) ------ 1980 $19,634 (y) 123% 1990 $35,501 (z) 80.8% Source for data on compensation: 83: tb.664, p.400; 93: tb.666, p.424 Increase in the number of social service workers during 1970-90: Number Increase 1970 not available ---- 1980 1,590,000 (v) ---- 1990 2,234,000 (w) 40.5% (See note at end of Item (17).) Public-aid administrative costs apportioned equally among social service workers: Total Per Worker 1970 not available 1980 $51,006,000,000 (h) $32,079.25 1990 $110,953,000,000 (i) $49,754.70 12. One can get some idea of a welfare system that might be recommended by Americans for Truth in Welfare Reform from the following data also included in the report: If all public aid expenditures were handed directly to welfare recipients, each would have received: 1970 $1,239.33 (a/m) 1980 $4,540.08 (b/n) 1990 $8,156.24 (c/o). If expenditures for stipends and services were paid directly to welfare recipients in cash each would get: 1970 $1,087.41 (d/m) 1980 $1,367.87 (e/n) 1990 $2,000.06 (f/o). Hypothetical direct payments to recipients compared with actual annual average welfare stipends: Actual Direct Direct Stipend Pmt of S&S Pmt of Total 1970 $1,060.80 (j) $1,087.41 $1,239.33 1980 $1,077.96 (k) $1,367.87 $4,540.08 1990 $1,315.20 (l) $2,000.06 $8,156.24 Considering the wide availability of the Statistical Abstracts in public libraries throughout the country, the report's authors speculated that the absence of news media or other reportage on the data was due to "political considerations." It referred to what it called a "disinformation campaign" aimed at blaming welfare cost increases on recipients. "Speculation as to the...objectives of such a campaign is beyond the scope of this report; (however) the identities of its immediate beneficiaries are fairly obvious:" welfare bureaucrats, elected officials, and the political organizations with which both are allied. "For the welfare establishment -- despite the dwindling real-dollar value of stipends and services to welfare recipients -- exploitation of the poor in the name of more taxpayer-funded jobs and fatter paychecks is a genuine growth industry, Big Business by any standard of judgment." A REPLY Edward C. Wood: ... Only a True Believer could have missed the absurdity of the WELFARE file you put on your web page. (..and did I check the figures myself?) donblis160@aol.com ewood@ix.netcom.com Re: My web page WELFARE file Hi, A True Believer in the figures printed in the Statistical Abstract of the U.S.? I realize that it must be difficult for you to encounter a lot of figures from the Statistical Abstract that undermine some of your most closely held misconceptions and prejudices. But that does open up the possibility of learning something new. To answer your question: did I check out all of these figures my self. No. Because when I came across this post I saw it as an update of the work done by Milton Friedman (Nobel laureate economist). In chapter 12 of his 1962 book "CAPITALISM & FREEDOM", he estimates the total amount of money spent in by governments in the US (federal, state and local) on programs that were justified because they were to alleviate poverty for the year 1961. The figure was something like $33 billion, on direct welfare payments, old age assistance payments, social security benefit payments, AFDC, farm price supports, public housing, etc. He excluded veteran's benefits, and made no allowance for indirect costs such as the impact of minimum wage laws. Then he estimated what it would cost to bring the entire lower 20% of families up to the income level of the rest of the population. It was less than one half of that figure. So, have thing changed much since then? If anything, they have probably gone in the other direction. The percent of total GNP spent on programs that are justified because they help the "poor" (or keep people from being poor) is even higher now than then, while the percent of the population that is classified as being poor is about the same or lower. I recall seeing figures showing that since the 1960's, military spending is down while government transfer payments are up (as a percent of GNP). In case we have all lost track, transfer payments were intended originally to transfer money mostly from the "rich" to the "poor" and not the reverse. But for example, in Wisconsin, there is a state program established to help low income people afford housing. It provides rent subsidies and helps first time home buyers borrow to make down payments on a house. But lately it has been used to provide a loan to a professional sports team: the owner is hardly a pauper, and the player payroll averages close to a million dollars a year per player. (SEE my web page file "BREWERS" in the Economics section. Farm price supports, passed with images of the poor family farmer, pays the big bucks to rich farmers, etc. So I think the thesis of my "WELFARE" file (Web page Econ section) is correct: most of the money being spent in the US to "help the poor" is going to people who are not poor by any standard. And that a far more efficient way to alleviate poverty is to expand EITC, the "negative income tax". Do you dispute this? Edward C. Wood: So, your answer to the question I *did* ask -- "Now how do you propose to collect the money to be passed out?" (by EITC) -- has shifted from -- "Use a part of the very large amount of money that now goes to the high paid administrators of the various welfare/poverty programs." -- to *Use a part of the money that is now being passed out in other ways* -- to paraphrase Friedman. That still doesn't answer unless we assume that the budget is never balanced; so that you advocate collecting the money the same way it is being collected now. (Don't bother. I've read Friedman, too; and I know what he said about it.) --ECW Well yes, both Milton and I would like simpler taxes. But the question of how the government COLLECTS money is really not the issue here; this has to do with how to SPEND it.--jeb >[snip] I recall seeing figures showing that since the >1960's, military spending is down while government transfer payments >are up (as a percent of GNP).--jeb > >In case we have all lost track, transfer payments were intended >originally to transfer money mostly from the "rich" to the "poor" and >not the reverse. But for example, in Wisconsin, there is a state >program established to help low income people afford housing. It >provides rent subsidies and helps first time home buyers borrow to >make down payments on a house. But lately it has been used to provide >a loan to a professional sports team: the owner is hardly a pauper, >and the player payroll averages close to a million dollars a year per >player. (SEE my web page file "BREWERS" in the Economics section.--jeb > Even if that story were true as you tell it -- which I will not check -- it is merely anecdotal and not proof of the general proposition that all, or a significant part, of welfare funds have been diverted from their intended targets.--ECW This is not exactly "anecdotal"; it is happening all over the country. Did you see the recent editorial in USA TODAY? I wanted to get an online copy but could not. Anyway the point was that cities all over the country are using tax money to build sports complexes to lease to pro-sports teams: football, baseball & basketball. Milwaukee's Miller Park (now under construction) is hardly unique. But this comes down to taxing the general population to provide money to the team owners and professional athletes. People who are not poor by any standard. Just what do you mean by "intended targets"?--jeb >Farm price supports, passed with images of the poor family farmer, >pays the big bucks to rich farmers, etc. > >So I think the thesis of my "WELFARE" file (Web page Econ section) is >correct: most of the money being spent in the US to "help the poor" >is going to people who are not poor by any standard. And that a far >more efficient way to alleviate poverty is to expand EITC, the >"negative income tax". Do you dispute this?--jeb > There are two propositions there. I have already expressed my opinion of the first. As to the second, it is possible that EITC would be better than present welfare distribution methods. I know no more about its details than I learned yesterday from reading the 1996 Income Tax instruction booklet. It meets the criterion of the righteous orthodox that welfare recipients must work; though, like AFDC, it offers substantial benefits for having at least one child. Mark Witte's comments concerning its efficiency in reaching the 'target' population are well taken, as is his remark that Friedman, in the work you cited, "... is engaging is a bit of economic slight of hand to advance his ideological leanings." I would add that Friedman (who may, I think, be fairly categorized as 'orthodox') labors under the orthodox delusion that the Invisible Hand will automatically furnish the employment the erstwhile welfare recipients need to qualify for EITC. Regards, Ed Edward C. Wood ewood@ix.netcom.com Hi, I wish Friedman's ideas would become the "orthodox" approach to economic policy. But, alas, we are some distance from that :-( On EITC I am advocating what it COULD BECOME, not the limited and distorted program that exists today. I agree that today (and mostly because of the House Republicans) it does not amount to much. On farm subsidies, there was an interesting article recently in a local paper about the local people who collect the largest payments from the agriculture department. They are not "farmers" in any normal use of that term. They don't plant or harvest any crops for example. The really BIG payments go to (mostly) lawyers who were smart enough to form corporate farms, that then get payments to not grow food. Do you really think that is what the farm price support programs are for? On jobs, the high unemployment is in Europe and 3rd world countries. The US is currently on the edge of a labor shortage. One new worker in 3 is an immigrant, and HELP WANTED signs are all over. The usual claim is the sure there are LOTS of jobs, but they just don't pay enough. But improving EITC would deal with that. ,,,,,,, _______________ooo___( O O )___ooo_______________ (_) jim blair (jeblair@facstaff.wisc.edu) For a good time call http://www.geocities.com/capitolhill/4834 Attached is a recent letter from Don Bliss, a newspaper reporter who wrote my that "Welfare" file From: Date: Mon, 23 Jun 1997 12:35:38 -0400 (EDT) To: jeblair@facstaff.wisc.edu Subject: Re: My Web page WELFARE file You said, "ewood complained about the lack of documentation." The data is all in the 1993 edition of the Statistical Abstract of the United States, which is about as unbiased and credible as U.S. Government data ever gets, and is also generally accepted as an original source. I don't know what additional documentation anyone can justifiably seek without a basis to challenge the agency cited in the Abstract. I thought my summary cited that the Abstract -- I apologize if it did not -- and believed you or anyone questioning the report could easily check such a widely available and reliable original source. Of course, ewood'll have to do a lot of math to verify the conclusions in the report that I summarized. (This chore is the sort of thing that good newspapers used to do for us and I resent the fact that none did it for us before this private group saw the need.) I have one caveat to add here: The information I'm sending today comes from an earlier version of the study. I no longer have the final paper [I was surprised to find I kept this version so long; it was among stored papers I was culling only this past week]. I have the impression that one and maybe two figures in the article I digested for my summary may differ, but not significantly so, from the data here due to correction of a mathematical error that may have been in this earlier version. If so, ewood will no doubt find it for him or herself. If ewood plans to use this study in some official capacity, I am certainly willing to to go back to my source and try to get a hard copy. But note that I exercised my own editorial judgment to excise as irrelevant to my summary and also inadequately documented what I felt was a somewhat windy diatribe in the report alleging a present-day feminist bias discriminating against males who need welfare. Anyway, here are page and table references (Further, deponent knoweth not.): Total U.S. spending for welfare, which the abstract labels "public aid, increased 101.4 percent. Table 578; page 14. State and local spending for welfare increased by 127.3 percent. Federal spending for welfare increased 87.5 percent. Table 579, pages 14 and 15. The number of public-aid recipients increased by only 12 percent. Table 604, page 15. Non-administrative welfare expenditures -- the sum of Supplemental Security Income for the aged, blind and disabled plus welfare stipends, food stamps, medicaid fees and monies paid out under several smaller programs rose 63.8 percent. Table 605, pages 15 and 16. The average annual welfare stipend $1077.96 in 1980 and $1315.20 in 1990, increased by only 22 percent. Table 604 , page 15. Administraticve costs per welfare recipient increased 80.6 percent. In 1980, welfare recipients got $1 in stipends and services for every $32 spent on administration. In $1990, welfare recipients got $1 in stipends and services for every $40 spent on administration. Tables 578, 604 and 605, pages 14-17. In 1980, if expenditures for stipends and services had been divided equally among all welfare recipients, each would have received about $137. In 1990, if expenditures for stipends and services were divided equally among all welfare recipients, each would have received about $200. (Tables 604 and 605, page 15 and item 3, page 18. In 1980, administrative costs consumed 97 percent of a total welfare expenditure of $73 billion, leaving 3 percent to pay for stipends and services. By 1990-, administrative costs had risen to 98 percent of $!47 billion, leaving 2 percent for stipends and services. Tables 578, 604 and 605, pages 14-17. In 1980, if the administrative costs of welfare had been divided equally among all social service workers in the civilian economy, each would have received about $45,000. In 1990, if the administrative costs had been likewise divided, each social servcice worker would have received about $64,000. Compared with the previous figures, these sums reveal the identity of the real beneficiaries of the U.S. welfare system. Tables 578, 605, 647, pages 14-16 and item 6, page 19. In 1980, if all public aid expenditures had been shared equally by welfare recipients, each would have received about $4540. In 1990, if all public aid expenditures had been likewise disbursed, each recipient would have received about $8158. Tables 578 and 604, pages 14-15, and item 5, page 18. In 1980, if only administrative expenditures had been divided equally for payment to welfare recipients, each would have received about $4403. In 1990, if all administrative expenses had been likedwise disbursed, each recipient would have received about $7956. Tables 578 and 605, pages 14-17 and item 2, page 18. In 1980, there were 1,590,000 social service workers for 16,079,000 welfare recipients. In 1990, there were 2,234,000 social service workers for 18,023,000 welfare recipients. This is an increase of 40 percent to cope with a caseload increase of only 12 percent. Tables 604 and 647, Pages 15-16 and item 7, page 19. In 1980 the ratio of social service workers to welfare recipients was 1:10. In 1990, the ratio was 1:8. By comparison, the 1990 nation teacher-pupil ratio, grades K-12 was 1:17. Tables 239, 604 and 647, pages 15-16 and Item 7 page 19. In 1980, the U.S. per-capita expenditure on welfare was $322. In 1990, the per-capita expenditure was $591. Tables 14 and 578, page 14 and item 8 page 19. Hi, Me again. So is it my "welfare" file that is absurd, or the situation? AND LATER THIS: Subject: Why not bring back the WPA? Date: 2 Feb 1999 23:36:58 GMT From: Richard Clark Organization: Technical Editing Services CC: jb@jerrybrown.org, Andy Caffrey , Florence Windfall , Karen Clark , shipmateKC@aol.com, Richard Moore Newsgroups: alt.politics.economics, sci.economics, alt.journalism According to author and researcher Martin L. Gross, we could pay every poor family in America $14,700 per year, by way of WPA jobs that include health insurance, and still *SAVE* $210 billion a year! That's a $210 billion savings over what we're currently spending on (81 different kinds of) welfare programs which government now administers. Martin bases these figures on information that is found in a catalog put out by the Congressional Research Service called _Cash & Non-cash Benefits for People of Limited Income_. He calculates that we're currently spending $360 billion/yr on welfare. He says the cost of giving one job per family to the 7.7 million families who live below the poverty line would be $150 billion/yr. This would include the cost of health insurance for all of them. $150 billion is $210 billion less than the $360 billion we're spending right now. My guess is that there are quite a few people, among the 7.7 million folks which the Census Bureau counts as "poor," who would be happy to take a job that paid $14,700 per year. The administration costs could be next to nothing; simply let most of these folks go to work for organizations like Habitat for Humanity, which already puts thousands of people to work every year, constructing affordable new housing all over the country, using public contributions and volunteer help & guidance. So how many folks here would hope that our country could make such a transition, from the encouragement of welfare dependency to something like the WPA? Who would not support such a transition, and why? No doubt that a lot of people who had WPA jobs wouldn't be very productive. A lot of them would simply be kept busy taking care of the children, so that other mothers and fathers could work. But if the $360 billion welfare bureaucracy could be virtually replaced, so what? WPA workers who _were_ productive could be paid quite a bit more than $14.7 K, and we'd _still_ be spending less than we're now forking over to feed the massive welfare bureaucracy and the ever growing prison & criminal justice bureaucracies. Is it better to spend many tens of Billions of dollars on the new prisons that will be required to house the ever growing "three-strikes-&-your - out" crowd, or would it be better to give work and paychecks to everyone who wants a job? If more prisons, a massive welfare bureaucracy, and a growing culture of poverty-and-idleness are better, why are they better? Why are more prisons better than more jobs? Is it really any surprise that the cities with the highest chronic unemployment rates also have the highest crime rates? If we did provide WPA-type job opportunities to everyone who today lives under the poverty line, and if the salaries ranged from $14,700 to, say, $20,000/yr. it occurs to me that this might very well have a rather pushy/inflationary effect on wages and wage demands, generally. Could that be the real reason that we need to maintain poverty and the resultant welfare and criminal justice/prison bureaucracies? In other words, do we _need_ a certain amount of poverty in order to keep effective wage demands down? Are poverty and high crime rates simply the price that must be paid for a system whose profit and business opportunities are as large as those in this country? If the negative income tax "freed up" a lot of idealistic and highly energetic young people to do "community building types of work," and if anyone who wanted a job repairing streets and rundown buildings could get paid well above the minimum wage (say $14,700 to $20,000 per year), we would have a radically transformed society on our hands. And I don't think it would be one that the power elite and high rollers would be happy with. First of all their profit margins would be eaten up by the much higher wages they would be forced to pay, in order to compete with the high wages and income that people could now get from the government, either through Negative Income Tax, or through WPA work. If they were forced to pay their workers a lot more, they would have to charge more for their product, and sales would fall. Then too, what if all this community building work by new legions of idealistic and innovative young people happened to result in beautiful new ecologically designed communities that were to an alarming degree economically self-sufficient? (I just heard this morning on NPR that a new manufacturing process for solar cell electrical panels will soon reduce their cost by half.) What would happen to the real estate market if the larger part of a whole generation of young people began building eco-communities which enabled people to live without much reliance on the corporate shit-jobs (temp work, mandatory long hours and the like) that were being offered? What if, by this means, large numbers of people were finally able to step off the hyperproduction, hyperconsumption treadmill on which the US economy seems to be based? For these reasons, lots of people with vested interests in the established order may actually favor the maintenance of poverty and joblessness for those at the bottom, in spite of the horrendous social and psychological costs of mass poverty and joblessness.