Poverty in the U.S. Was Plummeting—Until Lyndon Johnson Declared War On It
Too frequently, government intervention hurts those it is intended to help.
by Daniel J. Mitchell
October 20, 2018
One of the more elementary observations about economics is that a nation’s prosperity is determined in part by the quantity and quality of labor and capital. These “factors of production” are combined to generate national income.
I frequently grouse that punitive tax policies discourage capital. There’s less incentive to invest, after all, if the government imposes extra layers of tax on income that is saved and invested.
Bad tax laws also discourage labor. High marginal tax rates penalize people for being productive, and this can be especially counterproductive for entrepreneurship and innovation.
Still, we shouldn’t overlook how government discourages low-income people from being productively employed. But the problem is more on the spending side of the fiscal equation.
The Welfare State's Effect on the Poor
In Thursday's Wall Street Journal, John Early and Phil Gramm share some depressing numbers about growing dependency in the United States:
During t…
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