Poverty in the USA

Lots to discuss about this. I will preface this with the fact that I may be out of touch with low income because I have been doing well for a long time now, but at 28 I was working for just a little more than minimum wage.

1. Of course some people have no income due to poor health, they mostly are on SSDI.

2. I think the studies about poverty that talk about the stress of poverty are not about what we call poverty in the first world.

3. Measured by consumption there is very little poverty in the USA see here: http://conversableeconomist.blogspot.com/2013/09/the-poverty-rate-income-and-consumption.html

4. Recently there was an article, I cannot find it, about how positive about the future people in El Paso TX are. Also the people working in the little Chinese restaurants around here are probably working for less than minimum wage but I bet most are optimistic about the future. So perhaps a more positive message would help, say: “You can do it like this guy: http://earlyretirementextreme.com/how-i-live-on-7000-per-year.html

5. One of my impressions is that many people in the USA that are low income and have no or negative wealth are there because the do not worry and so do not save and hold off on consumption. Am I wrong? Maybe they are right to think like that, as starvation is virtually unknown in the USA.

6. Some people talk about people having too live in a bad neighborhood, but we cannot all be above average. So that is unsolvable, although more and better police might help. http://marginalrevolution.com/marginalrevolution/2013/01/more-police-fewer-prisons-less-crime.html and here: http://mason.gmu.edu/~atabarro/TerrorAlertProofs.pdf Also legalizing drugs might help in 2 ways: https://www.youtube.com/watch?v=OP56H_ZpEsE.

7. Nevertheless we are very rich in the USA and a UBI or an hourly wage subsidy to replace the complex and convoluted matrix of programs that we current;y have for least capable among us. The trick is to do it with while minimizing the negative incentive affects.

8. Certainly the church could, should do more but it is very fragmented now and without the big denominations building new hospitals, old age homes, orphanages is difficult. I think some of that is due to crowding out by government. The mutual aid societies have been almost completely displaced. Further according to sociologist Charles Murray, today poor people tend to not go to church any more.

Some really Good News on Extreme Poverty Worldwide

Some really good new on extreme poverty worldwide here.

The most important conclusion from the evidence presented in this entry is that extreme poverty, as measured by consumption, has been going down around the world in the last two centuries. But why should we care? Is it not the case that poor people might have less consumption but enjoy their lives just as much—or even more—than people with much higher consumption levels?

 ...

According to these household surveys, 44% of the world population lived in absolute poverty in 1981. Since then, the share of poor people in the world has declined very fast—in fact, faster than ever before in world history. In 32 years, the share of people living in extreme poverty was divided by 4, reaching levels below 11% in 2013. Although the World Bank estimates for 2015 are not yet available, the projections suggest that the incidence of extreme poverty has fallen below 10% for that year.

Social Security Complaints

I think what makes people angry is that the system was designed specifically to fool them (for their own good of course.) Social Security is a welfare program (maybe a good and necessary one, maybe not) that was disguised as a Ponzi scheme to make is palatable to the voters. That's because in the 1930's people liked to think that they did not get welfare. The SS system was brilliantly designed to make people think it that what they get is based on what they contribute but that's not really accurate, the system is fairly progressive. That is low earners get much more back based on what they contribute (I think that is a good thing) see here. Here is spreadsheet that I made. 

Here is how the Social Security Administration calculates how much you get.

All taxes including FICA and Medicare taxes are supposed to exist to fund public goods.  Providing money to retirees has been considered a public good since the creation of Social Security until now. What is spent where and how is always up to the current voters and their representatives in congress. The current voters and congress cannot obligate future voters and congress to spend money on what they want. It cannot be any other way.

When you buy an annuity from a life insurance company, it is guaranteed by their assets. That is if they renege you can sue and get their assets driving them in bankruptcy if need be.  

But when Governments tax you to pay for things they consider public goods any program that they make can be unmade by congresses.  They really have no mechanism to guarantee you anything. How could congress guarantee anything like that? There are no courts or enforcement above them to enforce the guarantee and the congressmen themselves do not have enough money personally to be significant guarantures.

As far as Social Security goes you are relying on future voters continuing the program, which has been changed in the past and can be changed at the whim  of the voters and congress. It's like all the other welfare programs in that way.

IMO we in the USA should slowly move toward a system like Australia has, where all retired citizens get the same monthly payment from Government portion of the retirement system. Under such a system the needy would get more and the wealthy would get less.

BTW when debating taxes if FICA is a tax rather than forced savings then SS is welfare, if it is forced savings then you cannot really include it when talking about how much taxes wage earners pay verses the rich.   

Income stats

From an article about why the bottom half of earners do not vote to soak the rich.

Many don’t know. In 2015, Ipsos MORI asked respondents in 28 countries to guess the average annual wage. That year in the United States, the correct answer was around $59,000, according to the OECD. The average guess was less than half that — about $26,000. (Even if we suppose respondents had in mind post-tax not pretax income, the guesses were way too low.)

Another survey in 2007 asked Americans about average household income. The median respondent guessed $40,000. According to the Census Bureau, average household income that year was $69,193 — again, much higher than the typical answer.

Niskanen Center

Good article I love the stuff coming out of the Niskanen center because it is quite reasonable.

IMO in USA, school funding is not a problem. Does the United States spend more per student than most countries? I think funding is high enough. I also would go as far as to say that there are really very few bad schools in the USA, most of the schools we call bad rather have bad, poorly motivated students. (Why the children of lower income people are not more motivated and how to change that is another question.) 

Nor do I think less access to healthcare is the reason that the USA lags in health. Some groups with less access to healthcare are healthier.  See here
Also more evidence here, in that Hispanics are healthier than the overall population despite having less access. 

It seems to be mostly accidents and homicides that lower US overall health ratings. We have more auto related fatalities but people still choose to live in rural areas where they have to drive a more. See here and here. 

Also Italy seems to do much better than Denmark on social progress indicators but I do not think that the Government of Italy is anywhere near as good as that of  Denmark, so that indicates culture is a big factor (and maybe even genetics a small factor too). 

Given that I think we should target our goals as directly as possible: here are some ideas that I think might help the poor. I tried to think of more direct ways to help, like maybe for health, a subsidy for cars that avoid accidents would more effective than a subsidy for health insurance. Maybe more better trained police than the PPACA.


Does the United States spend more per student than most countries?

Some groups with less access to healthcare are healthier.

hereHispanics have less access to healthcare and are healthier than the overall population

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More traffic fatalities in rural areas makes for higher death rate

List of countries by traffic death rates. More traffic fatalities in rural areas makes for higher death rate List of countries by traffic death rates. Does the United States spend more per student than most countries? Some groups with less access to healthcare are healthier. Hispanics have less access to healthcare and are healthier than the overall population More traffic fatalities in rural areas makes for higher death rate List of countries by traffic death rates.


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More traffic fatalities in rural areas makes for higher death rate

List of countries by traffic death rates.

Does the United States spend more per student than most countries?

Some groups with less access to healthcare are healthier.

Hispanics have less access to healthcare and are healthier than the overall population

More traffic fatalities in rural areas makes for higher death rate

List of countries by traffic death rates.

Cities Where African-Americans Are Doing The Best Economically 2018

Cities Where African-Americans Are Doing The Best Economically 2018

Notice they are mostly in the south. 

And this:

Why Charlotte and Raleigh Work for Black Residents

Democrats Seem to Run Local Government Badly

Democrats seem unfit to run local Government because they do not believe in commercial rights like the right to subdivide and build. Think NIMBYism in New York City and San Francisco, they are beginning to also mess up places like Austin TX and Colorado.

If we could keep The Democarts from NIMBYism and/or the GOP away for wars metaphorical or real we could make great gains.