Many of us will be donating money to charity this month. Americans give more than any other people in the world.
56 years ago, because American charities failed to end poverty, politicians said they were ending it. They have declared a “war on poverty”.
This “war” so far has cost $ 27 trillion.
Some people have been helped. But the documents also had a bad effect.
My new video shows a moving graph of the poverty rate in America. He reveals that before the war on poverty began, Americans gradually lifted themselves out of poverty. Year after year, the number of families in poverty – defined as earning less than three times what they need for food – has decreased.
Then the wellness began and for about seven years the progress continued.
But then progress largely stopped! This downward trend in the poverty line is now increasing and decreasing with economic conditions. America now has an “underclass,” generations of people who remain poor.
âSocial assistance taught them that they didn’t have to work,â says Yaron Brook of the Ayn Rand Institute. Handouts perpetuate poverty, he says, “because if you get a job … your checks go down.”
That’s why charity is better. Charities are free to help people who really need help while giving a helping hand to those in need of a “kick in the butt.” Uniform government rules discourage this.
I donate to a charity called The Doe Fund. He tries to âbreak the devastating cycle of homelessnessâ by teaching men to be proud of their work. Many are helped.
But not all charity helps. Facebook founder Mark Zuckerberg has donated $ 100 million to improve Newark public schools.
The money has disappeared into the education bureaucracy.
Education consultants and friends of politicians have received it. Teacher union contracts have grown.
âBut public schools haven’t improved,â Brooks points out. âStudent performance has not improved.
This year’s booming stock prices have widened America’s wealth gap. Billionaires got richer while store clerks lost their jobs.
The “progressives” gathered outside the home of Amazon founder Jeff Bezos and set up a guillotine. The message: âBehead the rich. They think that when Bezos makes billions, the rest of us have less.
It’s ignorant, said Brook. âAll of our lives are vastly better because of someone like Jeff Bezos. Things are appearing right on our doorstep. They hire hundreds of thousands of people. They allow the poor to earn a living by selling me what I want!
I push back. “But he’s got so much – when others have so little.”
“It’s his money!” Brook responds. âHe created it. Once we start deciding what you can and cannot do with your property what we will end up with is … extreme poverty for everyone. Only one system lifted people out of poverty, capitalism.
This is what I finally learned after years of consumer reporting.
Consider three ways to help people: government, charity, and capitalism.
Government is needed for some things, but it is ineffective and its handouts encourage dependency.
Charity is better because charities can judge who really needs a donation versus who needs a boost. But charities can also be ineffective.
Strangely enough, what helps people the most in the most effective way is greedy and selfish capitalism.
âTwo hundred and fifty years ago,â says Brook, âalmost all of us earned what the United Nations defines today as extreme poverty, $ 2 a day or less. It was 94% of all inhabitants of planet Earth. Today, only around 8% are also poor. Why? Not because of charity, not because of foreign aid, but by employing people. … Businesses are most effective because they have the right incentives. They will not survive if they are not effective. The government has no such incentives. And charities are mixed.
So why are billionaires and entrepreneurs now rushing to donate, rather than doing what they do best: innovate?
âThey want to be loved,â Brook replies. â(But) they buy into misconceptions, both economically and morally. They act against their own interests and against all of our interests, including the interests of the poor. “