5 things we could've done with the ~$27 trillion in tax dollars spent fighting the "War on Poverty"

In 1964, the U.S., and President Lyndon B. Johnson declared war. No, not on Vietnam, not on the Middle East, but on "Poverty."


At that time, the rate of poverty in the United States was indeed higher than it is right now. The poverty rate was 17.3%, with nearly 39 million Americans living below the poverty threshold.


Since then, the U.S. has taxed and spent almost $27 trillion (2019) dollars fighting the "War on Poverty." That's money that was taken out of the production economy, and inserted in the consumption side of the economy. Many on the left would argue that this money was well spent. I've heard explanations like "Just imagine what the poverty rate would have been without that money spent." Afterall, it is true that the poverty rate is lower today than it was in 1964.


How much lower is the poverty rate?


The most recent data from the US Census Bureau shows that the current poverty rate is 12.3%, with nearly 40 million Americans living below the poverty threshold. Some might say "See? The rate is lower, therefore the War on Poverty has been a success." Those might also point to the fact that immediately following the implementation of the "war," the poverty rate fell from 17.3% in 1964, to 12.5% in 1974. My response to this assertion would be to look at the rate at which poverty had decreased in the 10 years previous to the war's implementation.


In the 10 years prior to the start of the war, the poverty rate dropped from 26% to 17.3%. That equals a fall of 8.7 real percentage points, or a 33% decline in the 10 years prior to implementation of the war. The rate of decline following implementation, when the rate fell from 17.3% to 12.5%, was 4.8 real points, or a 27% decline in the rate. This means that the rate of decline actually slowed immediately following the beginning of the war.


Today I want to imagine where our economy would be- had that money been left in the right hands.


First, it should be discussed what actually constitutes poverty. I'd be dishonest if I did not first admit that the standard of living today is far better than in 1964. In fact, one could make the argument that by 1964's standards, almost no one today is in poverty. Is that a consequence of government spending, or did it happen despite government spending?


27 trillion dollars. That's a lot of money. As a quick reference, let's state that in inches, rather than dollars.


27 million inches equals around 405 miles. That's roughly the amount of miles I'd have to drive to get from my new home of Nashville, TN, to my hometown of Vienna, IL.


27 billion inches would take you around the world. I've been around the world twice, but that was only about 3.5 billion inches. 27 billion inches would take you around the world 16 times. That's a big difference from 27 million to 27 billion.


27 trillion inches would take you to the moon, and back... 864 times. Trillion is a really big number, that's the point. As a further reference, Apple is valued at roughly 1 trillion dollars. They started in 1976, so it took them 43 years to reach that 1 trillion dollar valuation.


Had the government been simply placing that taxed money in a bank account, what could we do with that money today?


1. We could buy Apple, 27 times.


In the 1976's Steve Jobs and Steve Wozniak started Apple Computers with $1,300. They later received a line of credit of $250,000- and the rest was history. Today the company is valued at $1 trillion. That's a pretty amazing return on investment. With the 251,300 expended on Apple to start the company, Jobs and Woz grew the company into one of the biggest companies in world history.


That year (1976), the U.S. government spent $200 billion fighting poverty. That amount of money could have started 176 "Apple Computers."


2. We could buy Amazon.com, 27 times.


In 1994, Jeff Bezos started Amazon.com from his garage with $140,000. The company has now grown into one of the worlds largest corporations, employing roughly 600,000 people, and worth $1 trillion dollars.


That year (1994), the U.S. Government spent $500 billion fighting poverty. That amount of money could have started 2,305,316 Amazon.com's. If 25 of those companies survived, it would have been enough jobs to get the unemployment rate to 0%.


3. We could build apartments, for everyone.


Yes, I said everyone. Today, the average cost per apartment unit ranges from $60,000-80,000. To be safe, I rounded it up to $90,000 per unit. Using our bank account that has $27 trillion in it, we could afford to build roughly 300,000,000 apartment units. That's not only enough to house the homeless, that enough to house every single adult separately, with units to spare.


4. We could buy Facebook, 54 times.


Facebook is valued at $540 billion. In 2004, Mark Zuckerberg, Eduardo Saverin, Dustin Moskovitz, and Chris Hughes started Facebook with $19,000. Today the company employs over 7,000 people.


That year (2004), the U.S. government spent $750 billion fighting poverty. That amount of money could have started 31,250,000 social media companies such as Facebook.com. Even if 90% of those companies failed, that would still be enough jobs for every single person on unemployment.


5. We could give free college to everyone, every single year.


If we took the $1 trillion spent annually on fighting poverty, we could actually pay college tuition for about 80,000,000 students. That's 5x more students than are currently attending college. In fact, we could have paid for free college for every student for every year since the implementation of the "War on Poverty."


Just the college statistic alone should make you question whether or not the money that's been spent fighting poverty went into the right places. According to Forbes.com, the unemployment rate for those without a degree is twice as high as for those with a degree.


What does all of this mean?


Nothing I stated thus far is an argument that the government should have taken that money and instead started businesses, or provided people with "free stuff." The purpose of this article is to present the fact that maybe, just maybe, it isn't obvious that the money taxed away from the economy and put towards social welfare programs actually did any good. Or at least that it didn't do any better than what would have been the alternative had that money been left in the free market.


Unfortunately, we will never know what our lives would look like if the government had not stolen that capital from the productive and given it to the consumptive. We can argue for its end, though. And that's why I think imagining the things that could have been created is a valuable exercise.



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Nashville, TN

email: nate@goodmorningliberty.us