Reason Writers Around Town: Shikha Dalmia on Old People Displacing Poor People at the Federal Trough


The left has been treating last week's CBO study showing that income inequality has been rising in America as the smoking gun it's always been looking for. But the study itself shows, notes Reason Foundation Senior Analyst Shikha Dalmia in her column in The Daily, that every income cohort made significant gains between 1979 and 2007, not just the rich. What's more, if Uncle Sam is doing less to help poor people now than previously, it is not because of heartless ideologues of the right. Rather, Great Society programs—Medicare and Social Security—that liberals themselves enacted have displaced federal programs for the poor.

[The study] found that in 1979, households in the bottom quintile received more than 50 percent of all transfer payments. In 2007, similar households received about 35 percent of transfers. "The shift reflects the growth in spending for programs focused on the elderly population (such as Social Security and Medicare), in which benefits are not limited to low-income households," the study explains. "As a result, government transfers reduced the dispersion of household income by less in 2007 than in 1979."

In other words, poor people are getting relatively fewer handouts thanks to the Great Society programs that liberals themselves put in place for the elderly. This demonstrates the core problem with unfettered redistributionism: Eventually, you run out of other people's money.

Read the whole thing here.