The Business of Keeping People Poor

(film reel spooling)

- There's people getting rich off this graph.

(soft music)

What we're looking at here is the number of Americans

that don't make enough money for basic survival.

So like a family of four, two parents, two kids,

living off of $31,000 a year or less.

That's considered poverty in the United States

and there's millions of people

who live with that kind of income.

The U.S. government spends about a trillion dollars

every year helping these people meet their basic needs.

In recent decades, a lot of that money

has been flowing through a middleman,

private corporations who are supposed to be more efficient

in administering this money.

- So welfare is big business.

And of course, that's the irony of this whole thing,

that there's so much money to be made from poverty.

(pensive music)

- Now this is not easy stuff to understand.

We're talking about government welfare programs

and bureaucracy.

Sometimes they're intentionally hard to understand

and these corporations don't really want

to be known by anyone.

But if you start to dig, which we've been doing,

and you look deep enough into this,

you start to see what all of this actually looks like,

who's actually getting rich,

what the incentives are within this system,

where the loopholes are,

and whether or not this is actually benefiting the people

that it's designed to benefit.

So in this video, I'm gonna show you

who gets rich off the poor.

And I'm just gonna do a few case studies

that demonstrate how this works.

I'll be making a list of examples here

going from what I see is the least egregious abuse

of this system to the most.

I am bracing myself to get sued or intimidated

by the companies that I'm calling out in this video

because that's how a lot of these powerful

shadowy companies work.

So as always, every assertion in this video

is rigorously fact-checked and in my sources.

Lawyers, go check that first

before you send me your cease and desist order.

Thank you.

And with that, let's look at who gets rich off the poor.

Let's go back to this graph one last time

and just zoom back to the 1950s

where you can see that the poverty rate

was double what it is today.

It's like 22%.

This was really bad.

And it led to the president at the time declaring war.

- And this administration today, here and now,

declares unconditional war on poverty in America.

We shall not rest until that war is won.

- So, "A War on Poverty" by Lyndon B. Johnson in 1964.

This is what that war looked like.

This big line.

This is social spending as a share of GDP.

You can see this is where he gives this speech,

right here, this flat line.

Social spending just skyrockets right after.

The government spends tons of money

for this war on poverty.

That money goes towards programs like Medicare

and Medicaid, food stamps, public education,

which is why you see this big dip.

22%, all the way down to 12, 13%.

And for a time, all this spending worked.

Poverty declined 30% in five years.

But eventually, progress slowed.

The government kept spending and people got tired of it.

The economy wasn't doing well

and people were tired of subsidizing

these welfare programs.

And that's where this guy comes in.

- My friends, some years ago,

the federal government declared war on poverty

and poverty won.

- This is where things start to get a little bit murky.

So we needed help.

We got it from Ann Kim, who is an expert,

who literally wrote the book on this history

and the modern day poverty economy

and sat down with us to talk through this history

and how it works today.

- Remember during the 1980s, we had this,

well, no, you don't remember the 1980s. (laughs)

Well, during the 1980s,

there was really this mythologization,

if that's a word, of the CEO.

At the same time, the government spending was ballooning.

Economic times were not that great.

So Americans were not feeling particularly generous

about funding social services programs.

And so the CEOs were really kind of held up on a pedestal

as the ones who are going to make government

just as efficient as they made their own companies.

- Poverty is a big business here in the United States

and the government is making decisions right now

that will affect millions of people.

And yet what I've been finding

is it's hard to keep up on all of this,

how this stuff is being reported

and what is trustworthy and factual.

Lately, Medicaid portals have been shutting down

in all 50 states,

thanks to a Trump administration funding freeze.

This could result in millions of Americans,

low-income Americans, going without care.

This is huge and it's not really being reported on.

And when there's no accountability,

bad policies can go unchecked.

I'm saying all of this

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Since we're talking about Medicare and welfare programs,

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Right-leaning outlets, they either downplay it

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and for existing.

Okay, back to our list of who gets rich off the poor.

So it's the 1980s,

Reagan wants to rein in all of this spending.

He's also afraid that Americans are becoming too reliant

on the welfare system.

So he kicks off a bunch of changes

that over time would lead to a fundamental shift

in delivering income support to low-income populations.

- They wanted to privatize Medicaid, Medicare,

prisons, air traffic control.

- This privatization of government spending

started under Reagan,

but it continued into the future administrations,

especially under Bill Clinton, who helped expand it.

And the fundamental shift looks like this.

We're gonna be using a graphic like this,

not only for right now,

but for the future cases of how this works today.

Taxpayers give money to the government.

The government used to give money