Good answer Bobert. I tend to agree. Poor people need breaks but not handouts. Most of all they need an education and exposure to family values beginning when they are young, not as a stopgap measure when they are stuck in the rut.

The Institute for Research on Poverty

Has poverty changed over time?

In the late 1950s, the overall poverty rate for individuals in the United States was 22 percent, representing 39.5 million poor persons. Between 1959 and 1969, the poverty rate declined dramatically and steadily to 12.1 percent. As a result of a sluggish economy, the rate increased slightly to 12.5 percent by 1971. In 1972 and 1973, however, it began to decrease again. In 1973, the poverty rate was 11.1 percent. At that time roughly 23 million people were poor.

In 1975 the poverty rate increased to 12.3 percent. It then oscillated around 11.5 percent for the next few years. After 1978, however, the rate rose steadily, reaching 15.2 percent in 1983. Thereafter it remained mostly higher than 13 percent. In 1993 it reached a new high of 15.1 percent, and then began to fall slowly. In 2000, 31 million people were poor (11.3 percent of the population). In 2001 the number of poor and the poverty rate both rose as economic difficulties moved into recession, and the rate has continued to rise; in 2003, 35.8 million people were poor by the official measure of poverty. By 2005, the number had risen to 37 million people (12.6 percent of the population.

Poverty using different measures of income

The existing official measure of poverty has been widely criticized. Under the procedures by which the official poverty rate is calculated, only cash income is counted in determining whether a family is poor; cash welfare programs count, but benefits from noncash programs, such as food stamps, medical care, social services, education and training, and housing are not included. Taxes paid, such as Social Security payroll taxes, and tax credits, such as the Earned Income Tax Credit, are also excluded from poverty calculations. Because government spending on means-tested noncash benefits and tax credits has increased more rapidly than spending on means-tested cash benefits over the years, ignoring noncash benefits is an increasingly serious omission if we want a broad picture of the impact of government programs on poverty.

In 1995 a panel of the National Academy of Sciences (NAS) published an influential report on revising the poverty measure (Measuring Poverty: A New Approach, edited by Constance F. Citro and Robert T. Michael). The Census Bureau has calculated alternative poverty rates using various experimental adjustments to the official poverty rate. It has, for example, expanded the definition of income to take into account some noncash income, including government benefits. The experimental poverty measures are the subject of an issue of the IRP newsletter Focus (volume 19, no. 2, Spring 1998, "Revising the Poverty Measure", pdf, 64 pp.), were discussed in an April 1999 IRP conference, and were the topic of a June 2004 workshop hosted by the Committee on National Statistics of the NAS. Papers presented at the workshop reviewed the effects of possible changes in the measure, drawing on the decade of research that has followed the publication of Measuring Poverty.

http://www.irp.wisc.edu/faqs/faq3.htm

The Census Bureau's poverty report for 2002 estimated the effects of government programs on poverty using experimental measures. For example, it compared the official measure of poverty with measures based on recommendations of the 1995 NAS panel. The panel suggested, among other changes, adjusting the poverty measure to account for geographic differences in housing costs, counting noncash benefits as income, and subtracting from income some work-related, health, and child care expenses. Using alternative definitions of poverty based on the NAS study, the poverty rate for 2002 was in general higher than under the official measure, depending on the particular definition of medical costs and on whether geographic differences were taken into account (see the 2002 Poverty Report, Table 7, "Alternative Poverty Estimates"). Not all groups are affected uniformly, however, when the poverty definition changes.

There is considerable disagreement on the best way to incorporate medical care in a measure of poverty, even though medical costs have great implications for poverty rates. But costs differ greatly depending upon personal health, preferences, and age, and family costs may be very different from year to year, making it hard to determine what exactly should be counted. Subtracting out-of-pocket costs from income is one imperfect approach, but if someone's expenses are low because they are denied care, then they would usually be considered worse off, not better off. If the value of Medicaid or Medicare benefits is included, should not the value of private insurance also be included? And although poor persons are clearly better off with medical coverage, such benefits, unlike cash, cannot be used by recipients to meet other needs of daily living.

Including the value of housing is equally controversial. How should the respective value of rented and owned housing be measured? Including the equity value of housing would alter the distribution of poverty according to age, because of the large numbers of elderly who are homeowners.