"Social Security Was Responsible For Decreasing Poverty"

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  • #20110

    Ok, now it’s my turn to ask for halp.

    I’m in Grad School full-time now (and thus my prolonged absence); I tried to point out to one of my professors (who is a reasonable enough fellow, but is what he is) that the poverty rate in America was coming down before the implementation of the Great Society, and his response was “well, that was [entirely] due to Social Security bringing down poverty among the elderly.”

    My immediate response to him was that when Social Security was first implemented it hardly affected anyone (because of life expectancy), and that historically the poverty rate was coming down before Social Security.

    But he wasn’t buying that. I can usually “find answers” myself, but I’m snowed under with readings, learning statistics, and with researching for this semester’s paper. Does anyone have a “better comeback?” Is there evidence either for or against his assertion that in the ’50s and early 60s Social Security was solely or even largely responsible for the decrease in poverty? For worse or even worse these guys are “quantitative”/”empirical” fellows so statistical support would be helpful.


    So starting from the the Great Depression and WWII poverty rates declined drastically, solely or in large part due to social security benefits for the elderly ( a fine place in history to start reviewing data). Following this drastic drop we see the poverty rate remain steady in the 11 to 15 percent range from 65 til today. Would your professor expect to see a new precipitous decline in the poverty rate now that the baby boomers are entering retirement, with retirees making up the largest segment of the population in history. I doubt he would find that to be much of a question but why? He is willing to accept that transfer payments were enough to cause the change then but not today. Does he believe the adjusted amounts were so much more back then? Why has the poverty rate remained relatively stable since 65′ when entitlements and transfer payments to the poor took off. I guess if I was as obtuse as your professor I could claim the increase in scope of the welfare state in the sixties counteracted the benefits social security had on diminishing the poverty rate.

    Statistical support for your professors claim is abundant and if I consider a bad answer to be better than no answer then I agree with him. I am always amazed by how little regard the people who tout the scientific method actually have for it.

    I hope one of our brighter members can come up with an adequate answer for you. After reading the thousands of posts you have left on this site your abrupt departure was a bit discombobulating. I don’t know how you ever had the time to contribute as much as you did. It is great to hear from you again and I hope you will find time to contribute more to the forum in the future.


    It might be worth posting this question in the Austrian economics forum, where Prof. Herbener can see it.

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