Politicians love to talk about “helping the poor.”
It sounds good in a speech. It looks good in a headline.
And it almost always comes with another big, expensive government program and a boost for their re-election campaign.
The problem is that the numbers behind those programs are a mess.
That’s the argument made by Phil Gramm of the American Enterprise Institute and economist John Early in a recent Wall Street Journal column.
They say the biggest fraud in welfare isn’t people cheating the system. It’s how the system defines poverty in the first place.
Washington’s Broken Definition of Poverty
When the federal government decides who’s poor, it mostly looks at cash income.
What it ignores is the long list of benefits people actually receive, like Medicaid, food stamps, housing aid, and refundable tax credits.
So someone can be officially “poor” while receiving tens of thousands of dollars in government help.
Gramm and Early point out that if all means-tested benefits were counted as income, the poverty rate in the U.S. would drop from more than 10% to less than 1%.
That’s not a minor adjustment. That’s a completely different picture.
How the System Slaps You for Trying
A single parent with two kids earning $11,000 a year from part-time work could qualify for benefits worth more than $53,000.
That puts their real income above $64,000. Yet the government still calls that family poor.
Meanwhile, a family earning $64,000 from work alone would qualify for almost none of those benefits in most states.
For Nevada families already dealing with high rents, higher power bills, and expensive groceries, this kind of setup sends a clear message:
Work more and you might lose help. Earn less and the system rewards you.
It’s not compassion. It’s a trap.
Gramm and Early argue that simply lifting families above the poverty line would cost far less than today’s welfare maze and could cut the federal deficit by hundreds of billions.
But that would mean fewer programs and less bureaucracy, which doesn’t seem to be what Washington wants.
Autism, Medicaid, and a Lack of Oversight
The same broken incentives show up in Medicaid.
Wall Street Journal columnist Allysia Finley reports that autism diagnoses among children have more than tripled over the past 15 years, driven in part by fraud and weak oversight.
Children on Medicaid or CHIP are about 2.5 times more likely to be diagnosed with autism than kids with private insurance.
States often don’t verify diagnoses or whether providers follow federal rules.
Federal audits in Indiana and Wisconsin found that nearly all Medicaid payments for autism therapies were improper or partly improper.
Why does this keep happening? Because the federal government covers between 50 and 75% of the cost.
States spend freely, Washington pays most of the bill, and taxpayers everywhere pick up the tab.
Nevada operates under the same system. When accountability is shared, it’s often diluted.
Built to Enroll, Not to Graduate
Research from the National Bureau of Economic Research shows that opening SNAP enrollment offices increases participation.
Close an office, and participation drops.
What’s missing is the exit plan.
As former Cato Institute scholar Michael Tanner has pointed out, there’s little effort to help people leave SNAP once they qualify.
The system’s built to enroll people, not to help them become self-sufficient.
What Real Reform Can Look Like
It doesn’t have to be this way. Feeding America fixed a broken food distribution system by using basic market principles.
Instead of treating all food as identical, food banks bid for what they actually needed.
The result was a 50-million-pound increase in food supply in just months.
Today, Feeding America distributes more than 5 billion meals each year.
The takeaway for Nevada families isn’t rocket science.
Bad data leads to bad policy. Bad incentives punish work. And good intentions don’t excuse broken systems.
If Washington really wants to fight poverty, it should start by counting reality instead of hiding it.
The opinions expressed by contributors are their own and do not necessarily represent the views of Nevada News & Views. Digital technology was used in the research, writing, and production of this article. Please verify information and consult additional sources as needed.
