FROM ISSUE NUMBER 83 - SPRING 1986 GO TO TABLE OF CONTENTS

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Is welfare really the problem?

DAVID T. ELLWOOD and LAWRENCE H. SUMMERS

THE POVERTY ISSUE is gridlocked. No one is satisfied with current policy, but no alternative can generate much support. The sources of dissatisfaction are well-illustrated in two recent tracts on the poverty problem: Charles Murray’s Losing Ground and Michael Harrington’s The New American Poverty.  Murray notes that poverty has increased in the last fifteen years while federal social spending has ballooned. He argues for a poverty Laffer curve: Attempts to reduce poverty actually have made things worse. Harrington sees the problem of rising poverty as one caused by government inaction rather than action. He asserts that the War on Poverty was never really declared and argues that without a massive effort, there is no real chance of combatting poverty.  We have reviewed the existing policies and our national record in reducing poverty. Despite the haphazard evolution of these policies and their seeming lack of coherence, they function reasonably well. Our conclusion is that, given the resources devoted to fighting poverty, the policies have done as well as we could have hoped.

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