Tuesday, December 3, 2013

Many US Citizens Earn at Poverty Levels but Few Consume at Poverty Levels.

The link below highlights a study that shows that though many US citizens still earn at poverty levels, almost no USA citizens consume at poverty levels.

Thus, they write: "The results in this paper contradict the claim that poverty has shown little  improvement over time and that antipoverty efforts have been ineffective.  We show that moving from traditional income-based measures of poverty to  a consumption-based measure, which is arguably superior on both theoretical and practical grounds—and, crucially, accounting for bias in the cost-of-living adjustment—leads to the conclusion that the poverty rate declined by 26.4 percentage points between 1960 and 2010, with 8.5 percentage points  of that decline occurring since 1980."Just to be clear, the notion that the consumption-based poverty rate nearly reached zero percent does not mean that the war on poverty is won.

That is a very important point made by "The conversable Economist" Tim Taylor.

The above implies that we should continue to work on getting people to earn more but that poverty of consumption is no longer found in the USA except among the Homeless who are often very difficult to help due to mental illness and drug habits (the worst of which is booze.)

There are of course people who drop through the cracks but that is problem of Government ineptitude rather than a lack of money and I am afraid that Government ineptitude will be forever with us.

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