Throughout history the poor were often shunned as undesirable customers, because they lacked the means to pay for purchases. Being poor made merchants suspect that poor customers may steal if they lacked the funds to buy their needs. Nowadays helping the poor is big business.
Whenever there are societal problems there are always ambitious politicians who seek to fill a need. If you assume the desire to alleviate poverty and inequity is solely the purview of Western democracies, you would be wrong. Just study political economy and you will find that despots often use poverty and inequity to seize power and maintain it. The following from The Atlantic:
In 1964, President Lyndon B. Johnson declared “unconditional war on poverty,” and since then, federal spending on anti-poverty initiatives has steadily ballooned. The federal government now devotes hundreds of billions of dollars a year to programs that exclusively or disproportionately benefit low-income Americans, including housing subsidies, food stamps, welfare, and tax credits for working poor families.
Nearly 10 years ago I wrote, “The Great Society Declared War on Marriage: Obamacare Made It Worse.” The gist of my issue brief was that the most effective anti-poverty program is marriage and only having kids within marriage. The War on Poverty created incentives for low-income couples to avoid getting married:
Why do more low-to-moderate income couples skip the wedding bells? The reasons are partially economic: Financial penalties in the tax code kick in when couples get married.The method used to calculate income eligibility and antipoverty programs is the primary culprit: the so-called federal poverty level (FPL).
The method for calculating the FPL reduces benefits when two poor people get married, compared to just living together. Policy experts worried about disincentives to marriage caused by the FPL at the time but were presumably powerless to stop it. Obamacare made it worse by also using the FPL to calculate eligibility for Obamacare subsidies. In the years since The Great Society marriage has become a luxury for mostly college educated Americans.
The largest poverty program is Medicaid. Medicaid was signed into law in 1965. Medicaid spending was less than $1 billion, with an enrollment of four million people in 1966. By 2022, just over 50 years since its inception, Medicaid covered just under 91 million people at a cost of $824 billion dollars (figures not adjusted for inflation). Disagree if you wish but Medicare is also a poverty program. In 2021 Medicare expenditures were $888 billion on nearly 66 million beneficiaries. The CBO estimates the subsidies for Obamacare and the federal marketplace at $1.1 trillion dollars over 10 years, from 2023 to 2033. Basically, the War on Poverty has become an anti-poverty program for health care workers and executives. The total subsidies account for about $1.7 trillion a year.
As The Atlantic reports, nobody believes we have won the war on poverty. Indeed, most of the money doesn’t even go directly to poor people. Rather, it is funneled through an assortment of private-sector middlemen. Anti-poverty programs breed dependency. Poor people began to plan their lives around benefits in ways that went beyond bearing children out of wedlock without a permanent partner. Another less-appreciated type of dependency is service providers. I have often heard it said that states refusing to expand Medicaid are harming their hospitals. Federal and state health care spending is now an entitlement for hospitals, clinics and the entire medical industrial complex. Government’s share of health care spending has become an economic development initiative in virtually all communities across the country.
The article The Atlantic is worth reading, although it mostly deals with welfare spending other than health care.