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The Big Fact

I pointed it out here. Here is another lovely illustration. I apologize for excerpting the entire post.

… in 1979, households in the bottom quintile received more than 50 percent of all transfer payments. In 2007, similar households received about 35 percent of transfers.

… Any private relief organization that gave only 35 percent of its transfers to the neediest households would be viewed as scandalously mismanaged. Donors would withdraw support and give their money elsewhere. It will be a great day when we can withdraw support for government and give make our donations to organizations that are better managed.

I’d like to see a Gini index calculated on the efficiency of government “charity” with a value of 1 for government that targets all charity to people who actually are in the needy class, and zero otherwise. However, I can imagine the rebuttal to the point above. Can you?

“Yeah, over that same time period wages for everyone have stagnated, so the charity needs to be spread a lot more widely than if Reagan hadn’t ruined the world.”

UPDATE: In tomorrow’s WSJ, here’s an editorial on how effective some private charity can be.

One Response to “The Big Fact”

  1. RIT-Rich says:

    ““Yeah, over that same time period wages for everyone have stagnated, ”

    Well they can say that, but that’s just not true.

    A more “correct” argument (though still meaningless) for them to make would be that the households in the bottom quintile today are different than the ones in 1979. In 1979 they were more likely to be families with children, minorities etc etc with low education and low opportunity. Today, they are more likely to be young people who have just entered the work force. IE…when I was working part-time as an engineering intern, making 12 bucks an hour for 20 hours a week, I was on the poverty line, and I was a “household”. But clearly, I wasn’t going to need any charity.

    But then again, that should be an argument for reducing government welfare, not shifting it (although, that will go right over their heads)

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