“Too many journalists seem unable to break free of their old assumptions, even when new evidence should cause some new thinking. Three articles in the Sept. 22 edition of the Washington Post endorsed the view that giving more money to poor people and poor countries can solve the problem of domestic and global poverty. It’s remarkable that so many smart people in our society are unaffected by the evidence that such transfer programs just don’t work.”

from Time for New Thinking About Poverty by David Boaz

read the whole article at the cato institute website. it has become conventional wisdom that throwing money at poverty would help to eradicate it. if only the U.S. wasn’t so “stingy” with our foreign aid, africa wouldn’t be suffering today. if only we cared more and sent more money to poor, depressed areas in this country, we could save the people from living in depressed neighborhoods or on the street. in fact, what we had always believed about poverty is wrong, as the rest of the article points out.

• we have spent over $10 billion(counting $3 billion in food stamps and other federal aid) in louisiana trying to fight poverty. how has that worked out? not well. we have seen the evidence of this.
• this article even suggests that there is a relationship between government dependence on welfare and illegitimacy rates. they make a convincing case here.
• we have spent over $1 trillion on foreign aid. according to boaz:
  

  “Government-to-government aid has tended to strengthen governments in poor countries at the expense of business and individuals and has made governments increasingly dependent on their rich lenders. Few countries have “graduated” from aid to self-sufficiency. After all that aid, according to a National Bureau of Economic Research study, sub-Saharan Africa is actually poorer than it was 30 years ago.”

why is that? it’s a distribution problem for some of those poor countries. some of these governments cannot be trusted to pass the aid along to their citizens instead of lining their own pockets. even when the money actually gets to the people, it doesn’t improve their lives simply by being there. this is true especially in this country. people with jobs are less likely to get caught in the cycle of poverty. that’s the right approach here: encouraging the creation of more jobs, not writing more big checks that ensure dependence on the government.

it’s worth the experiment. the current approach doesn’t appear to be working very well.

Technorati : foreign aid, poverty, welfare