From: wag5@quads.uchicago.edu (john peter wagner)
Newsgroups: alt.politics.clinton,alt.politics.bush
Subject: Re: Poverty
Date: 4 Sep 92 16:04:50 GMT
Reply-To: wag5@midway.uchicago.edu
Distribution: usa
Organization: University of Chicago Computing Organizations

In article <92248.100227DGS4@psuvm.psu.edu> DGS4@psuvm.psu.edu writes:
><<<Statistics deleted>>>
>
>Most of the content of this thread came from the Census Bureau report
>on poverty and an editorial page article in the Wall Street Journal.
>Someone else has started a similar thread in sci.econ, I think (maybe
>talk.politics.misc).  I want to make a couple of points about the article
>in the WSJ.
>
>First, the author castigates the Census for not counting noncash benefits
>as income.  That ignores the fact that Census has had a major research
>effort into this issue for at least the last 7 years with two publications
>on the effect of benefits on poverty.  The results from this research
>are well-known and have, in fact, been the subject of front page articles
>in the WSJ (I think, maybe editorial page).  Draw your own conclusions
>about the article in the WSJ.
>
>Second, the author uses a statistic which he admits is fatally flawed to
>conclude that the War on Poverty has not succeeded.  To truly examine this
>we would have to look at the adjusted poverty rate from 1950 to 1990.
>The author, instead, uses the unadjusted rate to illustrate that as welfare
>spending has climbed, poverty has not declined.  What he really shows is that
>as welfare spending has climbed, poverty excluding the welfare spending portion
>of income has not declined.  The best solution would be to have the adjusted
>poverty rate for 1966 and 1990.  The Census Bureau has not yet been able to
>calculate those figures, though I think they were planning to do it.
>
You select two years?  Any researcher worth his guns does not take
'two samples' unless the data is VERY hard to come by.  What if you chose
a depression year and a boom year and compared them? Would that be
indicative of any policy effect, or the fact that the years were in fact
very different? This sounds like a common method of statisticians to
make a set of data say whatever they want.  You could take any two
single years and compare them, ensuring that the discrepancy between the
years LUCKILY follows your prediction.

>We do have some useful information.  In 1966 the unadjusted poverty rate was
>14.7% and welfare spending was about 50 million dollars (1990 dollars).  In
>1989 adjusted poverty was 8.9%.  So, if you believe that the 50 million
>in 1966 reduced poverty by 5.8% (10-15 million people, roughly) then
>maybe you can conclude that the increased welfare spending hasn't reduced
>poverty rates. (Note that I'm not talking about the dynamics of poverty
>which is an additional important issue).
>
Whats this 'unadjusted' poverty rate business? Sure, if the poverty line
is $2,000(or whatever) today and there are X people fitting under
that line, 24 years of inflation earlier would show beaucoup more
people fitting under that $2,000, many of whom's life style would
be classified as well above the poverty line.  I think if you adjust
the dollars to reflect inflation, you will see that there are now
more people in actual 'poverty' today than in the pre-1967 world.

>In addtion, there is the following information.  From 1987 to 1989 welfare
>spending increased by about 25 million dollars.  The adjusted poverty rate
>declined from 9.4 to 8.9 percent.
1987 to 1989 were also years experiencing unparalleled economic growth. This
is an example of your 'conveniently selecting' two years that 'seem
to fit when you leave out something.'  For example, if I take the cumulative
inflation from 1987 to 1989 and compare it to this $25 million increase
divided by the total 1987 welfare spending, we see that the increases
are closely proportionate to inflation during that period.

>
>At the very least, the graph in the WSJ article is misleading.  I'll
>certainly be using it to illustrate the abuse of statistical data in
>some of my classes.

	Will you also be using this(your) post?

>
>Finally, I wanted to comment on the idea in the WSJ article that
>poverty "plummeted" from 1950 to 1966, while not declining since then.
>First, simple economics implies that as you lower the poverty rate you
>get diminishing returns from welfare spending.  Second, much research
>suggests that both income grwoth AND increases in Social Security led
>to declines in poverty in this earlier period.  It looks to me like
>the article excludes Social Security from welfare spending, misleading
>readers about the role of government in the earlier poverty declines.

Do you mean 'diminishing marginal returns?' Simple economics 'implies?'
What?  'Lower poverty rate', I presume this is a number of people
under the 'poverty line;' 'Welfare spending'- ahh, so you are saying that
'social security' replaced 'welfare' in causing the decline in poverty after
the '50's?'  That would indicate that it was the elderly who comprised
much of the 'poverty' class before 1967.  You would also say that 'income
growth' during the earlier period explained the drop in poverty, although
you wouldn't bring it up for the '87-'89 Reagan years.  What this says
is that the economy, the free market, brought people out of poverty,
as well as economic programs for the elderly.  This sounds cool.  Isn't
it what the Repubs have been supporting?


>
>
>Dennis G. Shea, Penn State

BTW, does Penn State have a policy of hiring pedants?
Newsgroups: alt.politics.clinton