People do not spend their way out of poverty; they save their way out. It has become increasingly apparent that savings and wealth building are important to permanently ending the cycle of dependence.
Asset tests in welfare-to-work programs were intended to prevent fraud, but the data show that in California (home of some of the most restrictive asset tests in the nation) these restrictions actually cost the state money. The test must be determined case by case- with case workers' time going to performing these checks, instead of to the people that need it. And a miniscule number of cases are ever found to violate the tests, which discourage the poor from saving and from owning a reliable vehicle.
Please see Recommended Reading for more information about current legislation sponsored by the Asset Building Program that would remove the vehicle asset test in from CalWORKS rules, and the overall benefits of removing limits to self-sufficiency.
"Millions of low-income Americans are hearing two conflicting messages from their government: Save and Don't Save." - The Assets Agenda
