In response to my article What is the Supplemental Poverty Measure?, a comment was left by a reader (Cai Phillips-Jones) who asked me the following question: "... the official overall poverty number was most recently 14.5% in 2013. So what data are you using that says that the poverty rate was below 14.5% in 1964?"
Actually, if one reads the top of the article, I did not say there was less poverty in 1964 than today - what I wrote is this precisely: "After spending more than 15 trillion dollars on the poor in America, we do not have less people in poverty, as a percentage, than before the War on Poverty started." Although the War on Poverty was indeed declared in 1964, not a single program was initiated that same day. It took years to implement even a few of them.
But first a little background and then we'll return to my statement.
From 1961 to 1969, the United States entered into the most vigorous economic expansion in her history. The unemployment rate fell dramatically from 6.7% at the beginning of the decade to 3.5% by the end (1). The GDP annual growth rate went from a negative rate in 1961 to a robust 8+% by 1966 (2). As well, the poverty rate entering the decade was over 20% and ended in 1969 at 13.7% before any of the programs of the War on Poverty had a chance to stop the natural decline that was occurring regardless of liberal good intentions.
This economic boom can be directly attributed to two massive tax cuts by JFK and his commitment to be pro-business (3).
More revealing is the steep decline in the poverty rate in the years before the initiation of a single one of President Johnson's poverty programs (4). That is to say, JFK's tax cuts were helping the poor just fine without any need for government handouts.
Now back to that poverty rate for 2013, which was 14.5 percent. In 1968, just as the Great Society programs actually started working, the poverty rate was below 14% and falling, eventually hitting 11.1% in 1973 - the lowest it has ever been. The median poverty rate from 1965 to 1973 is about 12.5%, see chart below.
Now draw a line at 12.5% from 1965 to 2011. You will now note that the poverty rates during the decades from 1975 to 1984, 1985 to 1994, 1995 to 2004, and 2005-2011 more often than not, lie above that line.
I want to make clear that it doesn't make sense to compare one year against one other year. I was not talking about one particular year 1964 or even 1965. I was talking about the period when the War on Poverty started, not the day it started. Nothing happened on the day it started.
As for the year you picked, 2013, the rate was 14.5; however it doesn't bother me that you ignored the year before when the rate was 15%. So what? I am not interested in one year being high and another being low. Look at that chart again. Look at it in the big picture. Show it to any statistician and ask him what he sees from 1965 to 2011. The correct answer is a statistical straight line with insignificant deviations from year to year but pretty average over each decade. Even adding in the years 2012 and 2013.
Now tell the truth, if this were a chart of your pet turtle's weight over the years 1965 through 2011 and you showed it to any intelligent person, would anyone conclude that your pet lost a lot of weight since 1965? I think you know the answer: hardly any weight that matters has changed over the decades in your pet's weight. Especially not 15 trillion dollars worth of change.
One will note that after 1973 the poverty rate never again came close to 11.1% until Clinton made welfare more restrictive and less of an incentive for women to have children. But eventually it went up again, especially now in the Obama years where there is even less of an incentive to work.
However, if I have to be absolutely, anal-retentively accurate, let me say that since 1973 we have not had a single year where the poverty rate was lower than that year. In other words, after 15 trillion dollars, we do not have less people in poverty, today, as a percentage, than what it was more than 4 decades ago. Absolutely, positively, without a doubt. That better for you bubbele?
U.S. Bureau of Labor Statistics, Labor Force Statistics
Year Annual Unemployment Rate 1961 6.7 1962 5.5 1963 5.7 1964 5.2 1965 4.5 1966 3.8 1967 3.8 1968 3.6 1969 3.5
U.S. Bureau of Economic Analysis, United States GDP Annual Growth Rate
National Review, 16 Aug 2013, Obama Skips the Kennedy Tax Cuts
But then came the 1960s, the decade liberals love to hate. Why? Because the path-breaking supply-side tax cuts of John F. Kennedy generated one of the greatest booms in economic history.
Actually, according to Domitrovic, it was two big tax cuts. The first was a business tax cut put in place in 1962, and the second was an across-the-board personal tax cut that began in early 1964.
The result? Domitrovic reminds us that the eight-year expansion from 1961 to 1969 saw growth of 48 percent — a third more in an eight-year period than in the 16 years ending in 1960.
US Dept of Commerce, Revision in Poverty Statistics, 1959 to 1968 PDF