In the United States, we are generally told that poverty is a deeply complicated problem whose solution requires dozens of reforms on issues as diverse as public schooling, job training, and marriage.
But it’s not true. High rates of poverty can, as a policy matter, be solved with trivial ease. How? By simply giving the poor money.
Last month, the Census reported that 46.5 million Americans, or 15 percent of the population, lived under the poverty line in 2012. While that number sounds disturbingly high, the total amount of money by which they are in poverty is smaller than you’d think. In 2012, those 46.5 million impoverished Americans were, collectively, $175 billion dollars below the poverty line. That figure is equivalent to 1.08 percent of the country’s GDP, one-quarter of the country’s $700 billion military budget, and exactly what we spend on Social Security disability benefits. Finding an optimal way to get $175 billion to these 46.5 million people is all that stands in the way of a country with an official poverty rate of zero.
We already do quite a bit to reduce poverty, both officially and unofficially. On the official side of the ledger, Social Security is the biggest factor, having dramatically reduced the rates of elderly poverty since the benefit levels began shooting up in the 1960s. Beyond Social Security, programs like Supplemental Security Insurance, disability insurance, veteran’s benefits, Temporary Assistance for Needy Families, and unemployment insurance also pump up the incomes of poor people. Without these programs, the official poverty rate would be much higher than 15 percent.