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Commentary By Jason L. Riley

Biden’s $1.9 Trillion Great Society Remake

The Covid relief package is the largest expansion of the welfare state since LBJ’s signature program.

President Biden is poised to put his signature to what is arguably the largest expansion of the welfare state since Lyndon Johnson’s Great Society. And if past is prologue, liberals are poised to take credit for any positive trend lines that follow implementation, regardless of whether credit is warranted.

Even the Biden administration has come around to acknowledging that its Covid-19 relief package—the “most progressive piece of legislation in history,” White House press secretary Jen Psaki bragged the other day—has little to do directly with Covid. The Journal reports that only $50 billion, or 7% of the $1.9 trillion price tag, is directed at testing and contact tracing, and only $16 billion is earmarked for vaccine distribution. Most of the rest consists of state bailouts, student-debt relief and various income-redistribution schemes involving tax credits, health-insurance subsidies and unemployment benefits.

Likewise, the Great Society’s ambitions extended well beyond the war on poverty and included programs designed to address racial injustice, healthcare, immigration and environmental conservation. Today’s liberals also share with their 1960s precursors an abiding belief that government is best suited to help the underprivileged. The objective is to widen by as much as possible the eligibility requirements for public assistance and then ask as little as possible from the recipients in return.

Johnson’s stated goal was a reduction in dependency, not simply a redistribution of wealth to the poor. “The days of the dole in our country are numbered,” he declared in 1964. Alas, the opposite occurred. After his antipoverty programs were implemented, the proportion of people who relied on government aid to stay above the poverty line increased, a sharp reversal of the pre-Great Society trend.

Poverty rates at the time tell a similar story. It’s true that privation fell under Johnson in the 1960s, but that had already been happening for more than a decade before his war on poverty began. The poverty rate was approximately 30% in 1950 but had dropped to 18% by 1964. Moreover, as the scholar Charles Murray detailed in his landmark study, “Losing Ground,” the poverty rate would start to increase in the 1970s, after two decades of steady decline, and even as Johnson’s successors threw more and more money at creating new antipoverty programs or expanding the existing ones.

“The real [inflation-adjusted] annual expenditures of the 1970s were far larger—by many orders of magnitude, for some of the programs—than expenditures in the sixties,” Mr. Murray wrote. Yet “the number of people living in poverty stopped declining just as public-assistance program budgets and the rate of increase in those budgets were highest.”

This history won’t sway the ideologues who believe in cradle-to-grave entitlements, or the politicians who believe that spending money—even counterproductively—is the way to win elections. But the experience of the 1960s should help temper expectations for the rest of us. And it ought to give pause to those Republicans and conservative thinkers who now argue that GOP-style government interventions—in the form of higher minimum wages, tax credits or guaranteed basic income—will somehow work better than the Democratic versions. We’ve already gone some distance down this road, and the laws of economics don’t care which party you belong to.

History shows that no government program has been able to match what people can do for themselves, and this applies equally to some of society’s most historically marginalized groups. No Great Society program was ever able to match the rate of progress made by blacks—in poverty reduction, income, homeownership or other measures—before that program’s implementation. Instead of helping, welfare-state expansions too often become lures and traps, inflicting damage that can last generations.

Democrats insist that the so-called stimulus is necessary to help the unemployed find work, but what working parents most need are schools to reopen, and what’s holding businesses back are lockdown rules that keep away potential customers. Liberals say the relief checks will give people money to spend. But the personal savings rate in 2020 was the highest in 50 years, which suggests that consumers already have money to spend but few places to spend it until the economy fully reopens.

It is quite possible that a year from now, if not sooner, the U.S. economy will be thriving, kids will be back in school, parents will be back to work, and the virus will be under control. Democrats will cite the bloated Covid-relief package as the reason. But the country was already experiencing generational lows in poverty and unemployment before the pandemic, and wages were rising fastest for the working class. A lot of people may not remember what was going on in the 1960s, but Democrats are hoping that they won’t remember 2019.

This piece originally appeared at The Wall Street Journal (paywall)

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Jason L. Riley is a senior fellow at the Manhattan Institute, a columnist at The Wall Street Journal, and a Fox News commentator. Follow him on Twitter here.

This piece originally appeared in The Wall Street Journal