“The Myth of American Inequality”

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In “The Myth of American Inequity,” authors Phil Gramm, Robert Ekelund, and John Early write on statistical legerdemain by which the government statistical bureaucrats (mainly in the Census Bureau and Bureau of Labor Statistics) are able to make poverty and income inequality in the U.S. appear far, far greater than they are in reality (pg.4).

The official measure of the poverty rate which uses the Census Bureau definition of income, does not count two-thirds of all transfer payments as income to the recipients. As a result, for more than fifty years, the measured income of low-income Americans has been substantially understated. As we will show, when you count all transfer payments as income to the households that receive the payments, the number of Americans living in poverty in 2017 plummets from 12.3 percent, the official Census number, to only 2.5 percent.

What is Government’s Goal

At the Manhattan Contrarian, Francis Menton asks a darn serious question: Should the purpose of government “anti-poverty” programs be to help the beneficiaries rise from poverty and become successful and independent, or alternatively should the purpose of such programs be to entice the recipients of aid into a life of permanent dependency upon government handouts?

No Longer a Temporary Boost

From the earliest days of the anti-poverty programs back in the 1960s, continues the Manhattan Contrarian, the programs were ballyhooed to the public as a temporary boost by which the poor could be helped to escape from poverty and achieve self-sufficiency.

And yet, about six decades in, the rate of poverty never seems to go down, and the number of program beneficiaries grows inexorably. Did something change along the way?

Well, yes, something did change along the way, reports Mr. Menton. In a 180-degree reversal of our government’s policy on the purpose of the anti-poverty programs since the time they began, “The Myth of American Inequality” covers subjects that Mr. Menton has  been “harping” on for a decade or so, accumulated under his tags for Poverty and Income Inequality at the Manhattan Contrarian.

However, the three authors are much more knowledgeable than he, Mr. Menton modestly acknowledges. They know firsthand the nitty-gritty how the government statistics on poverty and income inequality are compiled. To understand many of the machinations of our bureaucracy in producing statistics designed to gain support for further growth of government, Menton recommends his readers read “The Myth of American Inequality”

Francis Menton’s own take is that where we are now is the position that “the bureaucratic imperative of growing staff and budget was always heading toward.”

It would take constant focus and pushback from the elected President and his administration to keep the programs from getting perverted into vehicles for permanent dependency.

Obama certainly offered no such pushback, but rather overt encouragement.

G.W. Bush may not have given full encouragement, but also never pushed back to the extent he should have.

Government’s Statistical Scams

If you read “The Myth of American Inequality,” coupled with Mr. Menton’s dozens and dozens of prior posts, you will be among several dozen fellow citizens who are on to “the statistical scams on how the bureaucracy manipulates voters into supporting more and more government spending,” none of which ever can or will reduce poverty or income inequality, as the government measures them.

And the Good News?

Mr. Menton has that covered:

These few dozen of us will then only need to bring around the tens of millions who have fallen for the scams in order to get some reforms going.

Let’s get to it!