This page was last updated on January 17, 2014.
A true war on poverty; Bruce F. Simmeth, Executive Director - United Way of Beaver County; Beaver County Times; January 16, 2014.
This is the at least the 33rd letter from Mr. Simmeth since June 2005 lobbying for more government redistribution of income/wealth. If you look at some of my previous critiques of his letters (here, here, here, here, here, here, here, here, here, here, here, here, and here), you’ll find Mr. Simmeth tends to overstate alleged cuts and requests huge increases. In one case, Mr. Simmeth appeared to request a spending increase of from five to 10 times. In January 2006, Mr. Simmeth wanted federal taxpayers to increase their funding of the Low Income Heating Assistance Program (LIHEAP) by $2,000,000,000. I did not critique that letter (“Hike LIHEAP funding”; January 24, 2006) and it is no longer on the BCT website.
While I applaud Mr. Simmeth’s efforts to help the less fortunate among us, I oppose the use of taxpayer dollars to fund any of these efforts. It’s wrong to confiscate income/wealth from one person and give it to another, regardless of good intentions. Further, it can be the difference between a family remaining self-sufficient and requiring assistance.
Below is a detailed critique of the subject letter.
“On the 50th Anniversary of the War on Poverty, our nation must rededicate itself to fighting the rising tide of poverty in our country. Today we have almost 50 million people living in poverty in the United States. We have also seen an increase in the number of our citizens who are the ‘working poor’ and who struggle every day to try to make ends meet for their families.”
[RWC] The following are several years old, but I suggest you read the following papers.
Understanding Poverty in the United States: Surprising Facts About America's Poor (Backgrounder #2606); Robert E. Rector and Rachel Sheffield; The Heritage Foundation; September 13, 2011.
Understanding Poverty in America (Backgrounder #1713); Robert E. Rector and Kirk A. Johnson, Ph.D.; The Heritage Foundation; January 5, 2004.
Understanding Poverty in America: What the Census Bureau doesn’t count; Robert E. Rector; The Heritage Foundation; September 11, 2009.
Poverty and Inequality; The Heritage Foundation.
The Data on Poverty and Health Insurance You’re Not Reading (WebMemo #556); Kirk A. Johnson, Ph.D.; The Heritage Foundation; August 27, 2004.
“The loss of good paying jobs has caused many more Americans to turn to safety net programs for assistance. However, many of these emergency assistance programs have actually seen their funding cut in recent years. Instead of cutting these vital programs, such as the Emergency Food and Shelter Program (EFSP), the Low Income Home Energy Assistance Program (LIHEAP) and the Supplemental Nutrition Assistance Program (SNAP), their funding should be increased to help meet the increasing needs of our low-income citizens.
[RWC] The Food Stamp program was renamed SNAP by the 2008 “farm” bill.
“As a nation, we should fully engage our emergency assistance programs in a true war against poverty on behalf of all of our citizens who find themselves living in poverty.”
[RWC] What is the exit strategy for “the War on Poverty?” What is in Mr. Simmeth’s “true war against poverty?”
There is nothing compassionate about the government taking from one family’s paycheck to give to someone who didn’t earn it. There is nothing altruistic or charitable about telling government to rob from Peter to pay Paul. Compassion is when a person freely chooses to use his own paycheck to help someone in need. Should people in need get help? Of course, but from private charities funded by voluntary contributions, not by confiscated earnings.
The remainder of this critique covers two comments on the BCT website.
“getajob” wrote (1/16/14 @ 6:40am), “Notice you want to improve choice number two. How about we get these people back to work to get them out of poverty in stead of increasing there government dependency.”
Carl Davidson (CD) responded (1/16/14 @ 3:35pm), “Good idea, GAJ. The Congressional Progressive Caucus has a ‘Back to Work Budget’ pending in Congress, but blocked, naturally, but the GOP and Blue Dog allies. It would make county government the ‘employer of last resort’ if no private sector jobs exist. It would be funded by a financial transaction tax on Wall St--half the revenue would go to hire the unemployed directly at a living wage on local infrastructure, the other half into a pot to launch new business start-ups, private, cooperative, or mixed. So far, Congressman Roefus is avoiding it. Get on his case. It’s the most serious jobs program out there, one that could drastically reduce welfare and unemployment. All the GOP stuff is just teeny tweaks around the edges of the problem, not to be taken seriously.”
[RWC] “getajob” wrote that he wants the poor “out of poverty in stead of increasing there government dependency.” CD responded, “Good idea, GAJ,” then immediately proposed a plan that would do exactly the opposite. The Congressional CommunistProgressive Caucus (CPC) Back to Work Budget (BWB) would increase the poor’s “government dependency” and government control over the rest of us. CD knows this and has been pushing the BWB since at least April 2013. Read a CPC summary of the BWB and you’ll find it’s much more ambitious than CD disclosed and pushes a litany of lefty policies involving the environment, medical care, national defense, taxation, and so on. The U.S. already has “a financial transaction tax on Wall St” used to fund the operation of the U.S. Securities and Exchange Commission. By not mentioning any other taxes, CD implies the only tax in the BWB is a higher “financial transaction tax on Wall St.” The CPC summary itself shows this to be false.
Here’s an excerpt on this topic from my paper “Economics:”
“The ‘Back to Work Budget’ is more or less the fiscal-year 2014 version of what the FDR administration unsuccessfully tried throughout the Great Depression. In summary, this budget increases tax rates and government spending. As for the Economic Policy Institute Policy Center (EPI) ‘analysis’ of the CPC budget, the EPI is a leftist advocacy organization that actually helped develop the proposal it then ‘analyzes.’
“So, how did the CPC approach work when FDR tried it 70+ years ago? Consider the following quote from Henry Morgenthau, FDR’s Treasury Secretary during the Great Depression. Testifying before the House Ways and Means Committee in May 1939, Sec. Morgenthau said, ‘We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong … somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises … I say after eight years of this Administration we have just as much unemployment as when we started … And an enormous debt to boot.’ Further, unemployment never got below 9.9% before the U.S. entered World War II. Sound familiar?”
CD wants half of his new tax to go “into a pot to launch new business start-ups, private, cooperative, or mixed.” Pittsburgh is a poster child for this kind of thinking. Let’s take a look at how well government picks economic winners. Among recent failures were the taxpayer-subsidized Lazarus and Lord & Taylor department stores in downtown. When a business won’t build a department store in downtown Pittsburgh with its own money, most of us would pay attention. Unfortunately that wasn’t the case for government officials spending someone else’s money (our taxes).
In the realm of “green energy,” we had Solyndra, A123 Systems, Ener1, Abound Solar, et cetera. As a reminder, these four companies eventually filed for bankruptcy after receiving hundreds of millions of dollars in grants/subsidies/loan guarantees paid for by local, state, and federal taxpayers. It appears Solyndra alone will cost federal taxpayers about $528 million and tax-credit sweeteners thrown in to attract private investors could cost us a few hundred million dollars more. Adding insult to injury, A123 Systems (Red Chinese) and Ener1 (Russian) went under foreign ownership as part of their bankruptcy proceedings.
I’m sure someone will ask, “what about when the government saved Chrysler and GM?” Remember, Chrysler and GM did declare bankruptcy. Just as happens all the time, however, Chrysler and GM would not have gone out of business had Messrs. Bush and Obama stayed out and left our traditional bankruptcy laws play out without his interference. According to CNN, when the feds sold our remaining GM stock in December 2013, we taxpayers lost in excess of $10 billion. This loss was on top of the $1.3 billion we lost in the Chrysler bailout. Ford didn’t participate in the bailout scam, though it did accept a $5.9 billion loan “to transform factories across Illinois, Kentucky, Michigan, Missouri, and Ohio to produce 13 more fuel efficient models.” Nissan ($1.6 billion) and Tesla ($465 million) also received loans from this program.
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