There's an old saying floating around, the origins of which are unclear but the meaning of which is not. That saying states that there will always be rich people, and there will always be poor people, because rich people will always keep doing the things that made them rich, and poor people will always keep doing the things that made them poor.
That's not a rule without exceptions; income and wealth are also largely a product of age. Older people may not have higher incomes but often have a higher net worth than their younger counterparts, while the young people just leaving the education process rarely start out making impressive incomes.
Many of these lower-income people are dependent on government handouts to make ends meet. In some cases, it's only a temporary thing, until they get their stuff together and start earning. But in other cases, it's a lifestyle, and it looks to be a lifestyle that's increasingly common, at least according to a recent Congressional Budget Office study. A recent Center for Freedom and Prosperity piece by scribe Dan Mitchell makes some good points.
Today’s column features a very depressing chart from a report published last year by the Congressional Budget Office and it shows that poor people now get about three-fourths of their “income” from handouts.
That’s far different from the data in 1979, when poor people actually earned about two-thirds of their income.
Here's that chart:
— Ward Clark (@TheGreatLander) February 4, 2026
Mr. Mitchell explains:
Here are some excerpts from the CBO report, documenting the shift from private income to government dependency.
For people in households with money income below the poverty threshold, the composition of that income has changed over time… In particular, the percentage of total income that is accounted for by money income decreased from 1979 to 2021… In 1979, money income accounted for nearly two-thirds of total income, and in-kind transfers (both health-related transfers and those unrelated to health) accounted for about one-third. In 2021, money income accounted for about one-quarter of total income, and in-kind transfers accounted for more than half.
The shift from private income to government handouts is distressing because the goal should be self-sufficiency.
Yes, but the goal isn't self-sufficiency. There have been some reforms to the welfare system intending to address this, but as of this writing, what impact these will have is unclear; I'm inclined to think it's just scratching the surface, although it is still worth doing, on the "something is better than nothing" rule.
Read More: Welfare Reform Boost: More States Enforce New 80-Hour SNAP Rules
Note the big thing driving this trend is "Health-Related In-Kind Transfers." That reads a lot like disability payments.
But here's where things get interesting:
There’s one other visual from the CBO report that I want to share, mostly because it underscores the wisdom of the late Walter Williams.
Walter pointed out that there is a very simple recipe for minimizing the odds of being poor.
As shown by Figure 14, he was right. The big difference between the charts is that the lowest quintile has a disproportionately large number of households that are “unmarried with children.”
Here's that chart:
— Ward Clark (@TheGreatLander) February 4, 2026
Note that in the lowest income group, "Unmarried with Children" is represented far more than in the middle three and the highest quintile. But Mr. Mitchell points out that the great Walter Williams presents a "recipe" for minimizing the odds of being poor, but I have a suspicion that it's not that simple. I think the cause-and-effect direction is reversed here; it's not a foregone conclusion that marrying and then starting a family causes higher income, it's that the people who are already responsible enough to plan their futures, to marry first, then start a family, have a discipline that extends to careers. These people, even if they had remained unmarried and childless, would probably still have higher incomes.
In other words, it's not quite that simple.
Back to government handouts: It's a growing problem, and not just because of the massive, pervasive fraud that we is frankly horrifying.
Read More: This Could Be Huge: Trump Appoints New Federal Fraud Czar
Here's the thing: Incentives matter. Being the recipient of government largesse, money taken from people who work and given to people who do not, is too comfortable. It has become a lifestyle. That's what needs to be reformed. No more nibbling around the edges; a bottom-up reform of how we handle assistance for the poverty-stricken without making it easy or comfortable. And, no, being on welfare shouldn't be easy or comfortable, and it should be embarrassing. That's how incentives work.
Make it spare. The purpose of nutrition assistance programs should be to prevent starvation. No more Supplemental Nutrition Assistance Program (SNAP) cards that allow people to go to the grocery store and take their pick of stuff a lot of people who work can't afford. Ideally, there would be local food banks, where people who require aid could pick up a weekly draw: Dry bulk rice, dry bulk beans, lean turkey, and some fresh fruits.
Housing assistance should take the form of government dormitories - I'd use the term "barracks" but "dormitory" is an easier sell. Every person living in these dorms is supervised: Units are inspected periodically, no alcohol or drugs allowed, visitors may only be received by residents in the public day room.
Disability claims have to be tightened up as well; the problem here is the same as a serious problem with things like handicapped parking plates, in that there are always some doctors known who will always sign off for the parking or for a disability claim.
This all comes down to Congress, and while the steps outlined above would go a long way towards fixing all this, it's also all unlikely to come about. That's too bad, but a man's reach should exceed his grasp, right? And one way or another, sooner or later, welfare will have to undergo major reforms. It's become a handout, not a hand up, and that is just simply not sustainable - not to a nation with nearly $39 trillion in debt.
