The Real Tragedy of the Welfare State | 5-Minute Videos | PragerU

It’s not. America’s “poverty crisis” is fiction—a myth manufactured to make us feel like we’re not doing enough to help “the unfortunate.” We should feel bad about our treatment of the poor. We are doing them a terrible disservice. But not for the reason you think. So, where does the myth come from? It comes from an accounting trick. Ready for this? The official measure of poverty does not include 88% of the welfare benefits low-income families receive from the government. Refundable tax credits, for which the beneficiary receives a check from the Treasury? Not counted. EBT debit cards loaded with SNAP benefits? Not counted. Benefits from over a hundred other programs, including Medicaid and housing subsidies? The government doesn’t count any of this as income, even though—in the real world—it obviously is. Let’s see how this plays out: The average household in the bottom 20% of income-earners receives—on average—annual government transfer payments of about $45,000. When those transfer payments are counted as income, the poverty rate falls from its official level of 12% to only 3%. The percentage of children living in poverty plummets from 17% to 3%. Seniors? 9% to 1%. Counting transfer payments also eliminates most of the differences in the poverty rate across races.