Like many events of the turbulent 1960s, LBJ’s War on Poverty campaign—which turns 50 this year—has a contested legacy. Republican Paul Ryan recently argued that the government programs created during this effort are now part of the problem. The generosity of public assistance undermines work effort and unwittingly creates poverty traps. On the other side of the debate, President Obama has championed the War’s impact in mitigating poverty’s pernicious effects while acknowledging more needs to be done. With these competing assessments of the past, it’s fair to ask whether or not we can transcend the partisan rhetoric to draw up a new road map for the future that both sides can embrace.

Before crafting a new anti-poverty playbook, it’s critical to understand what went wrong—and right—with the original. For starters, the War on Poverty effort was not just about the poor. Beyond extending the safety net by significantly expanding cash assistance programs and Social Security, emphasis was given to broadly increasing economic opportunity. Spurred on by the Civil Rights movement (the photo above features Johnson signing the Civil Rights Act), ending discrimination was seen as a central objective that would enable greater participation in the economy and eventually be an engine of economic growth. Accordingly, the federal government marshaled significant resources to support a preventative approach to poverty, making historic investments to improve education, employment, and health care outcomes.

For starters, the War on Poverty effort was not just about the poor.

What followed were a wide ranging set of programs and interventions. Medicare and Medicaid expanded access to healthcare services; Head Start and Title I enhanced early learning and public school activities; Job Corp, VISTA, and other federal work-study programs provided job-skills training and employment opportunities. Policymakers designed additional elements to expand basic rights of citizenship, such as guarantees of fair labor standards, housing opportunities, legal representation, and the right to vote. Given the scope of these initiatives, a simple count of the poor may not accurately reflect the ultimate impact of the War on Poverty’s efforts.

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And yet in the subsequent decades, the policy focus changed. Social welfare policy narrowed to focus on income maintenance to facilitate immediate consumption. Undoubtedly, the ability of families to access adequate food and safe shelter is a foundation for a fair and civilized society and should not be trivialized. Measuring income at a point in time became the lens with which a family’s economic well-being was assessed. But having a low income is just part of the problem. Being poor also means having a lack of opportunity, information, and other resources that make a difference over time. For many families, moving up and out of poverty requires having both income and an access to a stock of assets.

For many families, moving up and out of poverty requires having both income and an access to a stock of assets.

The keyword there is “assets.” This was the fundamental observation of Michael Sherraden in his 1991 book, Assets and the Poor, which presented a new, big idea to the weary anti-poverty warriors. Sherraden argued that helping people accumulate savings and assets—as opposed to merely increasing their incomes at a point in time—can be a catalyst for upward mobility. His theory is that people progress when they accumulate resources that can provide financial stability and be strategically deployed at crucial moments over the long haul. Unlike income, assets are a stock of stored value that can be leveraged, invested, or saved. People cannot be expected to spend their way out of poverty. Rather, they need to gain access to an array of resources. Without savings on hand or any kind of financial cushion to weather financial emergencies, families can be set back by unexpected events. Owning even modest amounts of assets can provide meaningful security, especially when income fluctuates, and can change the way people think about and plan for the future.

Helping people accumulate savings and assets—as opposed to merely increasing their incomes at a point in time—can be a catalyst for upward mobility.

Since its publication, Sherraden’s seminal book, and the insights it offered, has led to the inception of a new field of anti-poverty policy known as asset building. This field has played a role in the development of a number of specific policy proposals intended to help aspiring families not just increase their incomes but also build assets. Twenty plus years after Sherraden formulated his theory, there is now supportive evidence showing that even families with low incomes can save and build assets if given access to the right opportunities and supports.

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The emergence of the “asset building” concept and its influence on social policy discussions is the subject of a new book, The Assets Perspective. By focusing on long-term economic health outcomes rather than short-term income or poverty, the book offers a valuable lens for thinking about our social policy long game. And it prompts policymakers to consider a set of potentially transformative interventions that are designed to assist families in building their asset base. These range from policies to promote the savings process among lower-income families, to facilitating access to high-quality and low-cost financial services, revamping the public assistance system, enabling affordable homeownership opportunities, enrolling all workers with retirement savings plans, and connecting all children to a savings platform early in life.

A broad asset building policy agenda has new relevance in the context of current partisan debates. While liberals have emphasized the growing trends of economic inequality, conservatives have countered that the focus should be on the ability of an individual person to find their own way up the economic ladder. Someone should tell President Obama and Paul Ryan that there is common ground to be found in using the assets perspective to increase economic mobility.

The promise of the assets framework is that it has the potential to attract support across the political spectrum because being able to access financial resources provides a path to the middle class. Assets are inextricably linked to the economic aspirations all families. If the challenge for policymakers is how to help all Americans connect to the tools, resources, and opportunities that help them participate fully in the economy and make progress in their lives, then assets must be part of the solution.

The author is editor, along with Trina Shanks, of  The Assets Perspective: The Rise of Asset Building and its Impact on Social Policy (Palgrave MacMillan).

About the Author

Reid CramerAsset Building Program Director
Reid Cramer is director of the Asset Building Program at New America, which aims to promote policies and ideas that significantly broaden access to economic resources through increased savings and asset ownership, especially among lower-income families.