NCPA - National Center for Policy Analysis

Poverty in the Richest Nation

September 24, 2015

Contrary to conventional wisdom, the United States is one of the biggest spenders per capita on social welfare benefits in the world. Despite having a poverty level comparable to other western nations, the U.S. still outspends nearly every other country on programs addressing poverty. This fact tends to be obscured mainly because U.S. social welfare spending contains a larger private-sector/non-governmental component.

  • Social welfare expenditures consist of spending on health care, education, retirement benefits and other government transfer payments.
  • When governmental and non-governmental spending are combined, social welfare absorbs around one-third of U.S. gross domestic product.
  • Setting aside the private sector, the United States still has a very large social welfare system. In fact, among affluent nations, the United States has the third highest level of per capita government social welfare spending.

The living standards of the American poor are much higher than are imagined. This is because the Census ignores the value of any social welfare benefits a family receives when calculating income. The government's own data show that the actual living conditions of the more than 45 million people who are deemed "poor" by the Census Bureau differ greatly from popular conceptions of poverty.

The key to improving self-sufficiency is to increase work and healthy marriages. Increased self-reliance will lead to an enhanced sense of self-achievement, a principal component of human well-being. Restoring healthy marriages will sharply reduce poverty, improve child outcomes and increase adult happiness.

Source: Robert Rector, "Poverty and the Social Welfare State in the United States and Other Nations," Heritage Foundation, September 16, 2015.

 

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