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Why 95% of Traders Fail

The Real Reason The American Dream is Unraveling

Politics / Social Issues Mar 23, 2015 - 10:21 AM GMT

By: James_Quinn

Politics

Marketwatch posted an article this week titled Why the American Dream is Unraveling, in 4 charts. As usual, the MSM journalist and the liberal Harvard academic can create charts that reveal a huge problem, but they completely misdiagnose the causes and offer the typical wrong solution of taking more money from producers and handing it to the poor, with no strings attached. This has been the standard operating procedure since LBJ began his War on Poverty 50 years ago. Do these control freaks ever step back and assess how that war is going?


The poverty rate had plunged from 34% in 1950 to below 20% before LBJ ever declared war. It continued down to 15% just as the welfare programs began to be implemented. The percentage of people living in poverty hasn't budged from the 15% range since the war began. This war has been just as successful as the war on drugs and the war on terrorism. Any time a politician declares war on something, expect a huge price tag and more of the "problem" they are declaring war upon.

Means Tested Welfare Spending 1947-2012

The Federal government runs over 80 means-tested welfare programs that provide cash, food, housing, medical care, and targeted social services to poor and low-income Americans. Over 100 million Americans received benefits from at least one of these programs. Federal and state governments spent $943 billion in 2013 on these programs at an average cost of $9,000 per recipient (not including Social Security & Medicare). That is 27% of the total Federal budget. Welfare spending as a percentage of the Federal budget was less than 2% prior to the launch of the War on Poverty.

In the 50 years since this war started, U.S. taxpayers have spent over $22 trillion on anti-poverty programs. Adjusted for inflation, this spending (which does not include Social Security or Medicare) is three times the cost of all U.S. military wars since the American Revolution. In terms of LBJ's main goal of reducing the "causes" rather than the mere "consequences" of poverty, the War on Poverty has utterly failed. In fact, a large proportion of the population is now completely dependent upon government handouts, incapable of self-sufficiency, and enslaved in a welfare mentality that has destroyed their communities.

The primary cause of their poverty and dependency on government are the policies implemented by liberal politicians which have destroyed the family unit, promoted deviant behavior, encouraged the production of bastard children, eliminated the need for personal responsibility, provided no consequences for bad life choices, and bankrupted the nation. The rise of the welfare state has coincided with the decline of the American state. The proliferation of welfare programs has broken down the behaviors, social norms and cultural standards that lead to self-reliance, generating a pattern of growing inter-generational reliance upon government handouts. By undermining productive social norms, welfare creates a need for even greater succor in the future.

So let's get to the four charts that supposedly reveal why the American dream is unraveling. The Marketwatch article makes the following claim:

The upper-middle-class families Putnam profiles separate themselves into affluent suburbs, with separate public schools and social spheres from those of their poorer counterparts. As a result, the poorer children not only face greater hardships, but they also lack good models of what is possible. They are effectively cut off from opportunity.

The faux journalist makes the laughable argument the reason poor children don't succeed in life is because people who have studied hard, graduated college, succeeded in life, and moved out of poor neighborhoods have left the poor children to face hardship and lack of opportunity. This is a classic liberal storyline. Blame those who have succeeded through their own blood, sweat and tears for the failure of those who languish in poverty due to their own life choices, lack of respect for education, and lack of work ethic. Chart number one reveals one thing to the Harvard academic Robert Putnam and another to me. He believes kids of people who have a college education have some sort of unfair advantage over kids of lesser educated parents:

"The most important thing about the experience of being young and poor in America is that these kids are really isolated, and really don't have close ties with anybody. They are completely clueless about the kinds of skills and savvy and connections needed to get ahead."

Why are poor kids isolated, with no ties with anybody? Isolated from whom? They don't have ties to their family? That is a ludicrous contention, supported with no facts. All kids are completely clueless. You don't get ahead in life through savvy and connections. You have the best chance to get ahead in life through opening a book, studying hard, and getting good grades, all with the support of concerned involved parents. There are no guarantees in life, but education, involved parents, and working hard dramatically increase your odds of success. It's not a secret formula. Putnam believes the chart below reveals that kids in households with college educated parents have an unfair advantage over kids in households without college educated parents. To me it reveals the complete and utter failure of LBJ's Great Society programs and the feminist mantra that men aren't necessary to raise children.

Children  0-7 living in a single parent family

The percentage of children living in single parent households with a college educated parent is virtually the same today as it was in the early 1960's, just under 10%. The percentage of children living in single parent households with a high school educated parent in the early 1960's was 20%. Today that number has risen to 65%. Liberals purposely misdiagnose the problem because admitting the true cause of this disastrous trend would destroy their credibility and reveal the failure of their beloved welfare programs. The key point is that prior to LBJ's War on Poverty less than 10% of ALL children grew up in a single parent households. Today, that number is 33%. The lesson is you get more of what you encourage and incentivize. The liberal academic solution is for college educated households to give more of their money to the high school or less educated households. Academics with an agenda never ask why their solutions haven't worked in 50 years.

The number of households in the U.S. in 1960 totaled 53 million and there were 24 million traditional married couple with children households, or 45%. There were 3 million single parent households with children, or 6%. Today the total number of households in the U.S. is approximately 122 million and there are only 25 million with traditional married couple with children households, or 20%. Meanwhile single parent families with children households have skyrocketed to 13 million, or 11%. The war on traditional two parent families by the government, liberal mainstream media, Hollywood, feminists, and academics has been far more successful than the War on Poverty.

The drastic increase in households with fatherless children, especially in the black community, is the primary reason the poverty rate hasn't dropped over the last 50 years. It is the primary reason poor children remain poor. It is the primary reason why every urban enclave in America continues to degenerate into dangerous, filthy, lawless ghettos. The statistics tell the story of decline, depravity, failure, and an endless loop of poverty.

  • An estimated 24.7 million children (33%) live absent their biological father.
  • Of students in grades 1 through 12, 39% (17.7 million) live in homes absent their biological fathers.
  • 57.6% of black children, 31.2% of Hispanic children, and 20.7% of white children are living absent their biological fathers.
  • Among children who were part of the "post-war generation," 87.7% grew up with two biological parents who were married to each other. Today only 68.1% will spend their entire childhood in an intact family.

Annual divorce rates are only marginally higher today than they were in the early 1960's. So that does not account for the drastic increase in fatherless households. But, the differences among races is dramatic. Blacks divorce at a rate twice as high as whites and three times as high as Asians.

Rate of Divorce

Marriage rates of Asians are almost three times higher than marriage rates of blacks. Marriage rates of whites are two times higher than marriage rates of blacks. Is it really surprising that Asian children score the highest on all educational achievement tests?

Rate of First Marriage

The facts prove that people (no matter what race) who marry and stay married offer their children a tremendously better opportunity to succeed academically, thereby giving them a much higher chance of moving up the socioeconomic ladder. This doesn't mean that children from a single parent household can't succeed. It just means they have a better chance with two parents. It's just simple math. Two adults working together can provide higher income, more help with school work, and offer a more stable environment for the child. The liberal media and those with a social agenda scorn the traditional family as if it precludes people from living however they choose. The results of the war on families can be seen in the chart below.

Unwed Birth Rates

The unwed birth rate stayed below 5% from 1945 through the early 1960's. As soon as the government began incentivizing people to not get married and to have children out of wedlock, the rates skyrocketed. Today, four out of ten children are born out of wedlock. Seven out of ten black children are born out of wedlock. Only two out of ten black children were born out of wedlock in 1964. These births out of wedlock are not the result of dumb teenagers making a mistake. Almost 80% of these births are to mothers over the age of 20, with 40% of the births to mothers over the age of 25. And these horrific results are after the 55 million abortions since 1973. This didn't happen because of women's rights or women feeling empowered to raise children on their own. Knowledge about and access to contraceptives is not a reason for unwed pregnancies. Poor women and the men who impregnate them receive more welfare benefits by remaining unmarried and receive additional benefits by having more children out of wedlock.

Children living with mother only

So all of the data confirms the fact children who grow up in two parent households do better in school, are far less likely to be enslaved in poverty, and have a chance to succeed in life, not matter what the educational level of their parents. In the early 1960s there were very few households with college educated parents. My Dad was a truck driver and my mother was a stay at home mom until we were in high school. We were lower middle class, but all three of their children attained college degrees by studying hard, working part-time jobs to help pay for their education, and having the support of concerned parents. Could we have gotten college degrees if we had been raised by only my mother? I doubt it.

Harvard Professor Putnam prefers to ignore the politically incorrect fact that a return to traditional families would begin to reverse the 50 years of damage caused by the War on Poverty. He believes it is in the moral interest of wealthier families to help improve the economic prospects of poorer children. Liberals also don't think the $13,000 spent per student per year is enough to educate them properly. He actually believes taking more money from producers and handing it to non-producers will boost the U.S. economy.

"The U.S. economy would get a major boost if the opportunity gap were closed. We cannot continue to live in our own bubbles, or compartments on a plate, without consequences. What I hope people take away is that helping poor kids, giving them more skills and more support would economically benefit their kids."

The country has spent $22 trillion on the war on poverty and spends approximately $1 trillion per year, but liberal academics think if we just spend more, the complete and utter failure of their solutions will be reversed. They ignore the fact a Democratic President (Clinton) and a Republican Congress instituted welfare reform in 1996 that temporarily stopped the increase in spending, halted the rise in unwed births, and put poor people back to work. Today only one welfare program, Temporary Assistance for Needy Families (TANF), effectively promotes self-reliance. Reforms that created TANF in 1996 moved 2.8 million families off the welfare rolls and into jobs. Those gains were reversed as the Obama administration and congressional leadership undid the employment and training requirements enacted 14 years ago. Liberals think it is cruel and inhumane to make poor people work.

Putnam's final three charts just reinforce the fact traditional families, involved parents, and higher education lead to higher incomes and upward mobility for children in these settings. The reason children in households with college educated parents get more daily attention is because those households are far more likely to have two parents. The time was equal in the early 1970s when two parent families were more prevalent. Having strangers raise kids in government subsidized daycare centers as a substitute for fathers hasn't worked out so well.

Time Spent by Both Parents in Developmental Childcare

In another shocker, poor children, who are predominantly from single parent households, without a role model to replace their missing fathers, score far worse in tests that predict success in college. The key attribute to educational success is not the educational level of the parents, it's the need for poor, middle class or wealthy households to have two parents invested in the future of their children.

Family Background

Attributing obesity rates of children from non-college educated households to the parents' eduction is quite a reach. In the early 1970's the obesity rates were very close between high school educated households and college educated households. So why has it surged? The liberals claim the poor go hungry and don't have enough food. Shouldn't that lead to higher malnutrition rates and not higher obesity rates? Maybe the surging obesity rates are due to the government lunch programs, the fast food culture in urban ghettos, no fathers around to encourage outside activities, and using food stamps to buy junk food rather than healthier foods. Bad choices generally lead to bad outcomes. Obesity is a choice. Of course liberals now classify it as a disability which needs to be subsidized by the government.

Adult Obesity

The American dream has unraveled for many reasons. Not spending enough on welfare programs is not one of the reasons. The welfare/warfare state is bankrupt. We spend $1 trillion on welfare programs, $1.4 trillion on Social Security and Medicare, and over $1 trillion on the military/surveillance apparatus. It's a bipartisan bankruptcy, as Republicans agree to increase the welfare state as long as the Democrats agree to increase the warfare state. The only thing sustaining this debt based house of cards is a Federal Reserve which provides zero interest financing and a never ending willingness to debase our currency to keep the status quo in power. The current rate of spending on the welfare/warfare state is unsustainable. We could voluntarily reduce the spending before the financial collapse or the spending will stop abruptly when our country undergoes a catastrophic financial implosion that will make 2008 look like a walk in the park.

Voluntarily putting the country back on a path of self reliance could be done if there was a will to do so. Reversing the culture of dependency would require a major dose of tough love that would upend the entire ideology of liberalism. Able-bodied, non-elderly adult recipients in all federal welfare programs would be required to work, prepare for work, or at least look for a job as a condition of receiving food stamps or housing assistance. This would promote personal responsibility and provide the recipients with some self respect. Obama is a big proponent of national service, why not national service for recipients of welfare?

Anti-marriage penalties should be removed from welfare programs, and long-term steps should be taken to rebuild the family in lower-income communities. Marriage penalties occur in many means-tested programs such as food stamps, public housing, Medicaid, day care, and Temporary Assistance for Needy Families. The welfare system needs to be revamped to reduce these counterproductive incentives. The appeal of welfare programs as an alternative to work and marriage could be reduced by requiring able-bodied parents to work or prepare for work as a condition of receiving aid. Today government advertises in an effort to get more people to sign up for food stamps and dozens of other welfare programs. Government should be promulgating the facts on how marriage prevents social ills - poverty, poor education, juvenile crime - associated with children born to unmarried women.

Lastly, we need to cutoff the illegal influx of low-skill immigrants from the South, whose children will receive far more in welfare benefits than they pay in taxes, if they pay any taxes. The country must reject blanket amnesty or "earned citizenship" for millions of illegal immigrants who then could access the welfare system. The welfare system is already unsustainable and adding millions of illegals into the system would be the tipping point.

Lyndon B. Johnson' s goal was not to create an ever increasing welfare state, but to give the poor a helping hand towards self-sufficiency. His idealistic aim was to cure and prevent poverty. But, once a program is put into the hands of politicians looking to get re-elected every two years, the unintended negative consequences expand exponentially. $22 trillion later the American Dream is virtually non-existent for the 47 million Americans languishing in poverty and the once prosperous middle class who have seen their real wages stagnate due to Federal Reserve created inflation and taxes increase to pay for the ever expanding welfare/warfare state. One chart provides a major explanation of why the American Dream has unraveled, but you won't see Obama, liberals or the mainstream media talking about it. Traditional married, two parent families are the antidote to poverty, not government welfare programs.

In the United States, Marriage Drops the Probability of Child Poverty by 82%

The debate on how to help the poor has raged for centuries. A wise Founding Father told us how the war on poverty would unfold.

"I am for doing good to the poor, but...I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it. I observed...that the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer." - Benjamin Franklin

Join me at www.TheBurningPlatform.com to discuss truth and the future of our country.

By James Quinn

quinnadvisors@comcast.net

James Quinn is a senior director of strategic planning for a major university. James has held financial positions with a retailer, homebuilder and university in his 22-year career. Those positions included treasurer, controller, and head of strategic planning. He is married with three boys and is writing these articles because he cares about their future. He earned a BS in accounting from Drexel University and an MBA from Villanova University. He is a certified public accountant and a certified cash manager.

These articles reflect the personal views of James Quinn. They do not necessarily represent the views of his employer, and are not sponsored or endorsed by his employer.

© 2015 Copyright James Quinn - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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