Author Topic: The poverty line  (Read 38542 times)

Arktinkerer

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Re: The poverty line
« Reply #150 on: May 15, 2015, 08:15:14 AM »

It's a very interesting topic. Since reading Capital in the 21st Century I'm also intrigued by the idea of a capital, or asset tax alongside the income tax. Wealth derived from capital tends to outstrip wealth from income in the long term, and goes largely unnoticed in the tax structure; a fact which I believe is one of the biggest drivers of wealth inequality.

There are contries that tax wealth or assets.  I can imagine that the paperwork must be hell even compared to our own tax forms.  The closest we have in the US is estate tax.  There is a lot of acounting and legal services sold here to allow people to avoid this.  Currently, the estate taxes are high enough that its not a problem except for those families with extreme wealth or that rely on family assets (farms and privately held businesses) for their livelihoods. 

infogoon

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Re: The poverty line
« Reply #151 on: May 15, 2015, 08:44:58 AM »

It's a very interesting topic. Since reading Capital in the 21st Century I'm also intrigued by the idea of a capital, or asset tax alongside the income tax. Wealth derived from capital tends to outstrip wealth from income in the long term, and goes largely unnoticed in the tax structure; a fact which I believe is one of the biggest drivers of wealth inequality.

There are contries that tax wealth or assets.  I can imagine that the paperwork must be hell even compared to our own tax forms.  The closest we have in the US is estate tax. 

Don't some states have annual taxes on the values of automobiles? And wouldn't property tax be considered a sort of asset tax?

Pooperman

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Re: The poverty line
« Reply #152 on: May 15, 2015, 08:48:53 AM »
While it's creative, the idea doesn't really seem practical. Just look up hyperinflation and you'll see how it destroys countries. World War II happened in large part due to hyperinflation. When you tell people that as a matter of public policy you are going to create a substantial amount of inflation, it becomes a force feeding on itself. No one wants to hold any cash (it's worth much less tomorrow than it is today) so they try to spend it ASAP. No one wants to invest, they only want to buy. Prices change by the hour. If people's wages don't go up hourly, the workers get poorer. Stable and small inflation is a much better idea.

Also misses one of the underpinnings of the whole fiat money system.  When you boil it all down, other than psychological effects, the only thing that gives value to the paper/credits we trade is that you must have them to pay your taxes.

It's not the only thing. For example, the fact that it's legal tender for all private debts is also valuable. And that we all agree to use the same thing in a country is enormously beneficial for reducing transaction costs and increasing efficiency.

The universal nature is valuable but not part of the intrinsic value of the money.  In the end the piece of paper is just paper.  The credits are just numbers in a filing cabinet or computer.  If tomorrow, no one ever had to pay taxes in dollars, I suspect it would not be long before the monetary system collapsed.

A simplistic explanation is here:  http://dailyreckoning.com/modern-monetary-theory-mmt-fiat-money-works/

It has some ugly implications about how free we really are.  It has some interesting implications about how consuming/earning less can actually make you more free.

Fiat money is (generally) worth whatever the economy is worth divided by the number of monetary units that exist. This has modifications such as relative economic strength, use as a medium of trade, taxes, debts, etc. Apply market forces to currency in addition to the usual stuff, and you get multi-variable non-linear dependent equations. The math to do that stuff is beyond what I learned, but computers are pretty good at it. Point is, it's complicated once you decide money doesn't have inherent value and instead depends on other market forces.

Jack

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Re: The poverty line
« Reply #153 on: May 15, 2015, 09:01:03 AM »

It's a very interesting topic. Since reading Capital in the 21st Century I'm also intrigued by the idea of a capital, or asset tax alongside the income tax. Wealth derived from capital tends to outstrip wealth from income in the long term, and goes largely unnoticed in the tax structure; a fact which I believe is one of the biggest drivers of wealth inequality.

There are contries that tax wealth or assets.  I can imagine that the paperwork must be hell even compared to our own tax forms.  The closest we have in the US is estate tax.  There is a lot of acounting and legal services sold here to allow people to avoid this.  Currently, the estate taxes are high enough that its not a problem except for those families with extreme wealth or that rely on family assets (farms and privately held businesses) for their livelihoods.

It's interesting that you characterize the estate tax as a "problem" for extremely wealthy families. The thing about the estate tax is that it's pretty much designed to be confiscatory to the ultra-wealthy in order to prevent the establishment of an American aristocracy based on hereditary wealth. What those wealthy families consider to be a problem, I consider to be "working as intended!"

Lyssa

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Re: The poverty line
« Reply #154 on: May 15, 2015, 09:32:23 AM »
Imho the biggest contributer to the perpetuation of developed world 'poverty' are repeated traumatic experiences and/or sub-standard education of underpriviledged children. If we provide good schools and preschools (including meals) and protect children from violence (both in their families and in the care system) we could very significantly reduce all sorts of problems in about 20 years. Its almost impossible to turn a troubled 40 year old into competent and produvtive decision maker. Much better investment to work on a 4 year old. Not saying we should let his parents starve, just adjusting our expectations what lectures OR money could do after a few lost decades.

Arktinkerer

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Re: The poverty line
« Reply #155 on: May 15, 2015, 09:54:23 AM »

It's a very interesting topic. Since reading Capital in the 21st Century I'm also intrigued by the idea of a capital, or asset tax alongside the income tax. Wealth derived from capital tends to outstrip wealth from income in the long term, and goes largely unnoticed in the tax structure; a fact which I believe is one of the biggest drivers of wealth inequality.

There are contries that tax wealth or assets.  I can imagine that the paperwork must be hell even compared to our own tax forms.  The closest we have in the US is estate tax.  There is a lot of acounting and legal services sold here to allow people to avoid this.  Currently, the estate taxes are high enough that its not a problem except for those families with extreme wealth or that rely on family assets (farms and privately held businesses) for their livelihoods.

It's interesting that you characterize the estate tax as a "problem" for extremely wealthy families. The thing about the estate tax is that it's pretty much designed to be confiscatory to the ultra-wealthy in order to prevent the establishment of an American aristocracy based on hereditary wealth. What those wealthy families consider to be a problem, I consider to be "working as intended!"

Maybe thats a Freudian slip for me?  Its a problem I'd like to have!  I think for the uber rich its a problem they know how to solve.  Between "foundations", trusts, closely held corporations, I think only the nouveau riche, liberals who think its their duty, and the stupid wind up having to pay much estate tax.

johnhenry

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Re: The poverty line
« Reply #156 on: May 15, 2015, 09:56:49 AM »
I would also add that the US simply printing money rather than taxing would be a much simpler system as well.

So we could imagine a society where everyone receives a minimum income and there is no income tax at the federal level.  Sound a little too utopian I suppose and perhaps a little too simplistic.   But the reality is that our current system is such a mish mash of cobbled and duct taped taxes and programs that it is hugely inefficient.   

So yeah,  no welfare offices,   no IRS,  no government inference in micromanaging people's monies,  no IRAs,  tax accountants, no tax penalties. 

The "tax" would all come down to inflation.    But that inflation would mostly be limited to areas like stocks, real estate,  commodities -- pretty much where our inflation resides now.  Electronics would continue to go down. 

It wouldn't necessarily lead to hyper inflation unless the congress hyperly spent.   Oh shit --- I just realized we're screwed!

Wow, now that's a Hell of an idea! It's the kind of thing that causes a visceral "what the fuck? that's crazy!" kind of reaction at first, then starts to make sense after you think about it for a while.

Of course, even though the Federal government does a lot of deficit spending (which might or might not be a bad thing), eliminating the income tax (without making any other changes) would instantly triple the deficit, which might not be sustainable. Relying on the money magically created from thin air by inflation to fund the government might require the government to pretty drastically cut spending, at least if we want the rate of inflation to be low.

While it's creative, the idea doesn't really seem practical. Just look up hyperinflation and you'll see how it destroys countries. World War II happened in large part due to hyperinflation. When you tell people that as a matter of public policy you are going to create a substantial amount of inflation, it becomes a force feeding on itself. No one wants to hold any cash (it's worth much less tomorrow than it is today) so they try to spend it ASAP. No one wants to invest, they only want to buy. Prices change by the hour. If people's wages don't go up hourly, the workers get poorer. Stable and small inflation is a much better idea.

HYPERINFLATION! One of knee-jerk reactions by folks who don't understand the cause and effect.  See the link below to understand the scenarios in which the world has witnessed hyperinflation.

http://bilbo.economicoutlook.net/blog/?p=3773

We've been printing fiat money by keystroke for decades now.  We run HUGE deficits annually, except in rare circumstances.  Where's the hyperinflation? 

Printing fiat money by keystroke is DESCRIPTIVE, not PRESCRIPTIVE.... that's the way it already works.  When someone advocates a program like a job or income guarantee, that doesn't change HOW money is created, it changes how its distributed.  They are just advocating creating money to supply a basic condition of living to all citizens.  That money could be created instead of or in addition to all the other things that government creates money to fund.  Every dollar spent on aircraft carriers, soldier wages, even SS payments are printed out of thin air.  It's not a valid argument to claim that a newly proposed budget line item would cause hyperinflation while the line items in our current deficit budgets would not!!

johnhenry

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Re: The poverty line
« Reply #157 on: May 15, 2015, 10:21:14 AM »

It's a very interesting topic. Since reading Capital in the 21st Century I'm also intrigued by the idea of a capital, or asset tax alongside the income tax. Wealth derived from capital tends to outstrip wealth from income in the long term, and goes largely unnoticed in the tax structure; a fact which I believe is one of the biggest drivers of wealth inequality.

There are contries that tax wealth or assets.  I can imagine that the paperwork must be hell even compared to our own tax forms.  The closest we have in the US is estate tax.  There is a lot of acounting and legal services sold here to allow people to avoid this.  Currently, the estate taxes are high enough that its not a problem except for those families with extreme wealth or that rely on family assets (farms and privately held businesses) for their livelihoods.

It's interesting that you characterize the estate tax as a "problem" for extremely wealthy families. The thing about the estate tax is that it's pretty much designed to be confiscatory to the ultra-wealthy in order to prevent the establishment of an American aristocracy based on hereditary wealth. What those wealthy families consider to be a problem, I consider to be "working as intended!"

Maybe thats a Freudian slip for me?  Its a problem I'd like to have!  I think for the uber rich its a problem they know how to solve.  Between "foundations", trusts, closely held corporations, I think only the nouveau riche, liberals who think its their duty, and the stupid wind up having to pay much estate tax.

EXACTLY!  The word "confiscatory" regarding taxes is completely loaded. It brings into question the very nature of wealth and private property.  Either you believe ALL tax is confiscatory or you believe it's obligatory (measures obligation). There can be no middle ground.  You either believe government should recognize money is to be controlled by the private sector and therefore all government spending must be funded by borrowing or taxing (confiscation).  Or you believe money cannot exist without government and therefore government is free to create money (not borrow) in the amount it sees fit for the purposes it sees fit and to demand taxes denominated in the money it creates... thereby setting the "obligation" of each citizen.

How do you expect to have a government with taxes?!?  Those with wealth are quick to call them confiscatory.  But just like money cannot exist without government, neither can private property.  Those who see taxes as confiscatory fail to recognize that with no authority in place to certify and enforce private property rights, property ownership would cease to exist except to the extent it could be physically secured and defended.  With no government how do you convey to everyone else that you own 100 acres and they need to respect it as yours.  How do you convince the others that you are part of the 1% and own everything that you say you own.  With no government to support the ridiculous wealth concentration... the best the uber rich could hope for would be a quick but peaceful distribution of their assets among the masses.  At worst, pitchforks. 


johnhenry

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Re: The poverty line
« Reply #158 on: May 15, 2015, 10:33:04 AM »
Imho the biggest contributer to the perpetuation of developed world 'poverty' are repeated traumatic experiences and/or sub-standard education of underpriviledged children. If we provide good schools and preschools (including meals) and protect children from violence (both in their families and in the care system) we could very significantly reduce all sorts of problems in about 20 years. Its almost impossible to turn a troubled 40 year old into competent and produvtive decision maker. Much better investment to work on a 4 year old. Not saying we should let his parents starve, just adjusting our expectations what lectures OR money could do after a few lost decades.

I used to agree 100%.  And I still believe that a top-notch government-funded public education system that focused on equality of education should be a very high priority of our society.  But even higher is a basic system of economic fairness that attempts to equally divide obligation to the group equally among all citizens.  Basically capitalism for a generation vs. capitalism where capital is allowed to traverse generations.

2lazy2retire

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Re: The poverty line
« Reply #159 on: May 15, 2015, 11:06:40 AM »
Imho the biggest contributer to the perpetuation of developed world 'poverty' are repeated traumatic experiences and/or sub-standard education of underpriviledged children. If we provide good schools and preschools (including meals) and protect children from violence (both in their families and in the care system) we could very significantly reduce all sorts of problems in about 20 years. Its almost impossible to turn a troubled 40 year old into competent and produvtive decision maker. Much better investment to work on a 4 year old. Not saying we should let his parents starve, just adjusting our expectations what lectures OR money could do after a few lost decades.

I used to agree 100%.  And I still believe that a top-notch government-funded public education system that focused on equality of education should be a very high priority of our society.  But even higher is a basic system of economic fairness that attempts to equally divide obligation to the group equally among all citizens.  Basically capitalism for a generation vs. capitalism where capital is allowed to traverse generations.

You can spend all the money you wish on education but if the home environment is not stable the results may well be less than stellar. Secure basic living first then educate.
Do you think all these high achieving school districts are the result of quality education and good teachers - maybe some of the success but I wager that the parents and peers are the real driving force. Give the parents dignity and the children will flourish
« Last Edit: May 15, 2015, 11:12:01 AM by 2lazy2retire »

Arktinkerer

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Re: The poverty line
« Reply #160 on: May 15, 2015, 11:54:56 AM »

EXACTLY!  The word "confiscatory" regarding taxes is completely loaded. It brings into question the very nature of wealth and private property.  Either you believe ALL tax is confiscatory or you believe it's obligatory (measures obligation). There can be no middle ground.  You either believe government should recognize money is to be controlled by the private sector and therefore all government spending must be funded by borrowing or taxing (confiscation).  Or you believe money cannot exist without government and therefore government is free to create money (not borrow) in the amount it sees fit for the purposes it sees fit and to demand taxes denominated in the money it creates... thereby setting the "obligation" of each citizen.

How do you expect to have a government with taxes?!?  Those with wealth are quick to call them confiscatory.  But just like money cannot exist without government, neither can private property.  Those who see taxes as confiscatory fail to recognize that with no authority in place to certify and enforce private property rights, property ownership would cease to exist except to the extent it could be physically secured and defended.  With no government how do you convey to everyone else that you own 100 acres and they need to respect it as yours.  How do you convince the others that you are part of the 1% and own everything that you say you own.  With no government to support the ridiculous wealth concentration... the best the uber rich could hope for would be a quick but peaceful distribution of their assets among the masses.  At worst, pitchforks.

Have to disagree with a lot of this.  Money existed before without governments.  And has existed with governments long before fiat money.  Private property existed long before governments.  We had no federal income taxes in the US until 1861.  While we did have duties and import fees a person could go their entire lives without paying anything to the government.  Federal Reserve didn't exist until 1913.  That doesn't mean that in some situations government is not a prefereable solution.  The reverse is also true--the ability to place a claim on a document has freed people from having to maintain their property.  How much could the 1% maintain if they had to physically look after the property or even if they had to pay to have others do so? 

Taxes can be viewed as a fee for services.  Some libertarians advocate this if there is a situation where government is the only reasonable way to provide a service.  They argue it is reasonable for things like courts, national defense, and maybe a few others.  Its a matter of degree.  I have yet to find a political/economic philosophy that can exist in its "pure" state.

Viewed another way your position is either the government controls all or there is anarchy.  There is a middle ground.  Either extreme you list is unsustainable. 

Arktinkerer

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Re: The poverty line
« Reply #161 on: May 15, 2015, 12:34:26 PM »

You can spend all the money you wish on education but if the home environment is not stable the results may well be less than stellar. Secure basic living first then educate.
Do you think all these high achieving school districts are the result of quality education and good teachers - maybe some of the success but I wager that the parents and peers are the real driving force. Give the parents dignity and the children will flourish

The thing no one wants to discuss is that genetics also play a role.  Don't over play that--fixing family and education will make a huge improvement.  But those that value intelligence and education have been seeking out others with the same values for generations and is certain characteristics we group under intelligence can be inherited.  Similar to the other comments this might also be a case where cultural viewpoints have to change if we are going to change society.  When a leading Cardiologist makes less than a football coach you can't blame the kids for not valuing education.


forummm

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Re: The poverty line
« Reply #162 on: May 15, 2015, 02:11:25 PM »

It's a very interesting topic. Since reading Capital in the 21st Century I'm also intrigued by the idea of a capital, or asset tax alongside the income tax. Wealth derived from capital tends to outstrip wealth from income in the long term, and goes largely unnoticed in the tax structure; a fact which I believe is one of the biggest drivers of wealth inequality.

There are contries that tax wealth or assets.  I can imagine that the paperwork must be hell even compared to our own tax forms.  The closest we have in the US is estate tax. 

Don't some states have annual taxes on the values of automobiles? And wouldn't property tax be considered a sort of asset tax?

This is pretty easy to enforce. If you don't pay it your registration expires. If you're driving around with expired registration is fairly easy to get pulled over. It's a lot easier to hide money and for rich people just to leave a jurisdiction. Tracking income is easier than tracking wealth. And wealth can fluctuate a lot and is very subjective to value (e.g. small businesses).

forummm

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Re: The poverty line
« Reply #163 on: May 15, 2015, 02:13:09 PM »
It's interesting that you characterize the estate tax as a "problem" for extremely wealthy families. The thing about the estate tax is that it's pretty much designed to be confiscatory to the ultra-wealthy in order to prevent the establishment of an American aristocracy based on hereditary wealth. What those wealthy families consider to be a problem, I consider to be "working as intended!"

I don't know that your "confiscatory" assertion is the design. It can also just be viewed as another kind of income tax. It's income to the beneficiaries of the estate.

forummm

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Re: The poverty line
« Reply #164 on: May 15, 2015, 02:22:26 PM »
HYPERINFLATION! One of knee-jerk reactions by folks who don't understand the cause and effect.  See the link below to understand the scenarios in which the world has witnessed hyperinflation.

http://bilbo.economicoutlook.net/blog/?p=3773

We've been printing fiat money by keystroke for decades now.  We run HUGE deficits annually, except in rare circumstances.  Where's the hyperinflation? 

Printing fiat money by keystroke is DESCRIPTIVE, not PRESCRIPTIVE.... that's the way it already works.  When someone advocates a program like a job or income guarantee, that doesn't change HOW money is created, it changes how its distributed.  They are just advocating creating money to supply a basic condition of living to all citizens.  That money could be created instead of or in addition to all the other things that government creates money to fund.  Every dollar spent on aircraft carriers, soldier wages, even SS payments are printed out of thin air.  It's not a valid argument to claim that a newly proposed budget line item would cause hyperinflation while the line items in our current deficit budgets would not!!

The way we pay for things now is not anything like the way Bob was suggesting we pay for things. When we pay for an aircraft carrier now, part of it is from dollars leaving peoples accounts through taxes, and part of it is from the Treasury issuing a bond, and someones dollars leaving an account to purchase that bond. No new dollars are created directly. Bob was suggesting that only new dollars be used to pay for the aircraft carrier. If you go from the government not creating money through its normal purchasing, to the government directly creating money through its normal purchasing at a rate equal to about 25% of GDP, you're going to have some pretty intense inflation. It could very easily start at 25% and spiral from there.

The government "creates" AND "destroys" dollars through other means in order to keep the economy, employment, and inflation in alignment with their desired targets. The federal budget does not directly create money.

Lyssa

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Re: The poverty line
« Reply #165 on: May 15, 2015, 03:58:47 PM »
Imho the biggest contributer to the perpetuation of developed world 'poverty' are repeated traumatic experiences and/or sub-standard education of underpriviledged children. If we provide good schools and preschools (including meals) and protect children from violence (both in their families and in the care system) we could very significantly reduce all sorts of problems in about 20 years. Its almost impossible to turn a troubled 40 year old into competent and produvtive decision maker. Much better investment to work on a 4 year old. Not saying we should let his parents starve, just adjusting our expectations what lectures OR money could do after a few lost decades.

I used to agree 100%.  And I still believe that a top-notch government-funded public education system that focused on equality of education should be a very high priority of our society.  But even higher is a basic system of economic fairness that attempts to equally divide obligation to the group equally among all citizens.  Basically capitalism for a generation vs. capitalism where capital is allowed to traverse generations.

You can spend all the money you wish on education but if the home environment is not stable the results may well be less than stellar. Secure basic living first then educate.
Do you think all these high achieving school districts are the result of quality education and good teachers - maybe some of the success but I wager that the parents and peers are the real driving force. Give the parents dignity and the children will flourish

And how does one 'give dignity' e.g. to an alcoholic? That's pretty much what I meant with 'adjusting our expectations' regarding what any system can do for adults. I remember reading a few days ago on this board about someone working with homeless people for 20 (?) years with exactly one having reached a normal, steady life as a result. That does not mean we should let the homeless starve or freeze to death. We should not. We should also not nourish the illusion that we can buy dignity for most struggling adults

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Re: The poverty line
« Reply #166 on: May 15, 2015, 09:21:48 PM »
I went to a great talk one time about an innovative program for alcoholics.  They were given a room in a shared house and among the few requirements were that they couldn't be violent/abusive, couldn't be excessively drunk in the common areas, and had to work on daily goals.

Over the year that the program was in existence something like 80% of the alcoholics stopped drinking and worked towards recreating their lives.  From that standpoint it was hugely successful and followed what some previous posters have said - treat people with dignity and let them work out their problems without judgement.

Unfortunately the program was not refunded.  Why?  Because it didn't make the men stop drinking, and that was just wrong.

Lyssa

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Re: The poverty line
« Reply #167 on: May 16, 2015, 12:21:37 AM »
I went to a great talk one time about an innovative program for alcoholics.  They were given a room in a shared house and among the few requirements were that they couldn't be violent/abusive, couldn't be excessively drunk in the common areas, and had to work on daily goals.

Over the year that the program was in existence something like 80% of the alcoholics stopped drinking and worked towards recreating their lives.  From that standpoint it was hugely successful and followed what some previous posters have said - treat people with dignity and let them work out their problems without judgement.

Unfortunately the program was not refunded.  Why?  Because it didn't make the men stop drinking, and that was just wrong.


Is there any source for this? 80% would indeed be wildly successful. Best I've heard for harm reduction programs in Europe that do not require abstinence is that most can be guided to get up earlier, eat regularly and drink somewhat less. But someone 'recreating his life' is very rare. Even for alcoholics who still have their family, home and jobs, 80% is a sucess rate not reached by any treatment, therapy or self help group that I am aware of. I've researched this recently because of a case in our family.

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Re: The poverty line
« Reply #168 on: May 16, 2015, 05:36:53 AM »
My life on $35k would be exceptionally different if I had no investments, no savings, no property, no goods I could hawk on Craigslist, etc.  And no family with means to help me, support me, and take me in (comfortably) if all that failed. 

We spent a lot of time here talking about emergency funds and margins or error and safety nets.  Those are the reasons that numbers like $20k/yr feel comfortable to us.  Because we know that while we budget down to 20k, we know that we can come up with an extra $5k in a few days if our care implodes, or  $10k in a few days if we need a new roof, or even $20k in a few weeks if we get sick.  And we can pull a few hundred dollars today if it will save us a hundred more down the road, because we have the savings that allow is to bring forward expenses tactically.   Those safety nets are a large part of why we can live on numbers lower than the average Joe.  Those living in poverty, or whatever term we want to use, don't have those things. 

While I agree with MMM's optimism and his notions that there is opportunity everywhere and for people in all situations, I think it's incredibly naive to think that because he was able to do X, anyone is. MMM *is* exceptional.  For one things, he's clearly pretty intelligent.  For another, he's articulate.  For yet another, he's very able-bodied.   Those things allowed him to get and keep good jobs, and succeed at them.  And they allow him to do many of this own home repairs, to figure out how to blow insulation into a slanted ceiling using burlap (or whatever it was), to know that he can always work at something if necessary, and to make sure his own son gets a solid education which sets him up for his own future successes.

Not everyone has those things.  And that makes a world of difference.  To me, poverty isn't just about income, and it isn't even just about income and financial assets.  It's also about access to resources of all kinds, including mental and health resources. 

SailorGirl

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Re: The poverty line
« Reply #169 on: May 16, 2015, 12:33:58 PM »
I went to a great talk one time about an innovative program for alcoholics.  They were given a room in a shared house and among the few requirements were that they couldn't be violent/abusive, couldn't be excessively drunk in the common areas, and had to work on daily goals.

Over the year that the program was in existence something like 80% of the alcoholics stopped drinking and worked towards recreating their lives.  From that standpoint it was hugely successful and followed what some previous posters have said - treat people with dignity and let them work out their problems without judgement.

Unfortunately the program was not refunded.  Why?  Because it didn't make the men stop drinking, and that was just wrong.


Is there any source for this? 80% would indeed be wildly successful. Best I've heard for harm reduction programs in Europe that do not require abstinence is that most can be guided to get up earlier, eat regularly and drink somewhat less. But someone 'recreating his life' is very rare. Even for alcoholics who still have their family, home and jobs, 80% is a sucess rate not reached by any treatment, therapy or self help group that I am aware of. I've researched this recently because of a case in our family.

Never published as far as I know,possibly because it was cut short.  Note that the men STARTED to change there lives but there was no follow-up to see if it was sustainable.  I also don't know how the residents were chosen for the program and there may have been a selection bias.  The point of the story was only to re-emphasize a previous point that when given options and treated with respect, many people make different choices.

forummm

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Re: The poverty line
« Reply #170 on: May 16, 2015, 03:52:26 PM »
My life on $35k would be exceptionally different if I had no investments, no savings, no property, no goods I could hawk on Craigslist, etc.  And no family with means to help me, support me, and take me in (comfortably) if all that failed. 

We spent a lot of time here talking about emergency funds and margins or error and safety nets.  Those are the reasons that numbers like $20k/yr feel comfortable to us.  Because we know that while we budget down to 20k, we know that we can come up with an extra $5k in a few days if our care implodes, or  $10k in a few days if we need a new roof, or even $20k in a few weeks if we get sick.  And we can pull a few hundred dollars today if it will save us a hundred more down the road, because we have the savings that allow is to bring forward expenses tactically.   Those safety nets are a large part of why we can live on numbers lower than the average Joe.  Those living in poverty, or whatever term we want to use, don't have those things. 

While I agree with MMM's optimism and his notions that there is opportunity everywhere and for people in all situations, I think it's incredibly naive to think that because he was able to do X, anyone is. MMM *is* exceptional.  For one things, he's clearly pretty intelligent.  For another, he's articulate.  For yet another, he's very able-bodied.   Those things allowed him to get and keep good jobs, and succeed at them.  And they allow him to do many of this own home repairs, to figure out how to blow insulation into a slanted ceiling using burlap (or whatever it was), to know that he can always work at something if necessary, and to make sure his own son gets a solid education which sets him up for his own future successes.

Not everyone has those things.  And that makes a world of difference.  To me, poverty isn't just about income, and it isn't even just about income and financial assets.  It's also about access to resources of all kinds, including mental and health resources.

+1 I've lived at this level of spending for a long time. It felt really scary and stressful when I was only earning about as much as I spent, and I didn't have any savings. It feels tremendously better now that I do have a cash cushion to fall back on and much more job security. Every year it feels better and better. We could cut our spending to below the poverty level and it would just be very inconvenient and involve sacrifices--but not stressful/scary. But if we were forced to live there and had nothing else it would be daily stress and anxiety.

shelivesthedream

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Re: The poverty line
« Reply #171 on: May 16, 2015, 05:01:51 PM »
My life on $35k would be exceptionally different if I had no investments, no savings, no property, no goods I could hawk on Craigslist, etc.  And no family with means to help me, support me, and take me in (comfortably) if all that failed. 

We spent a lot of time here talking about emergency funds and margins or error and safety nets.  Those are the reasons that numbers like $20k/yr feel comfortable to us.  Because we know that while we budget down to 20k, we know that we can come up with an extra $5k in a few days if our care implodes, or  $10k in a few days if we need a new roof, or even $20k in a few weeks if we get sick.  And we can pull a few hundred dollars today if it will save us a hundred more down the road, because we have the savings that allow is to bring forward expenses tactically.   Those safety nets are a large part of why we can live on numbers lower than the average Joe.  Those living in poverty, or whatever term we want to use, don't have those things. 

While I agree with MMM's optimism and his notions that there is opportunity everywhere and for people in all situations, I think it's incredibly naive to think that because he was able to do X, anyone is. MMM *is* exceptional.  For one things, he's clearly pretty intelligent.  For another, he's articulate.  For yet another, he's very able-bodied.   Those things allowed him to get and keep good jobs, and succeed at them.  And they allow him to do many of this own home repairs, to figure out how to blow insulation into a slanted ceiling using burlap (or whatever it was), to know that he can always work at something if necessary, and to make sure his own son gets a solid education which sets him up for his own future successes.

Not everyone has those things.  And that makes a world of difference.  To me, poverty isn't just about income, and it isn't even just about income and financial assets.  It's also about access to resources of all kinds, including mental and health resources.

+1

Something else which occurred to me while reading your post is that without a safety net you have nothing to look forward to. Either your future is the same as the present, scraping by and spending every penny of every paycheque, or something changes - which is going to be something like a car breakdown or an illness which will make life worse. There is no sense in which your life is getting better as it is if you are saving at that same low spending level.

ender

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Re: The poverty line
« Reply #172 on: May 16, 2015, 05:23:53 PM »
An interesting perspective I once heard on why those in poverty do "dumb" financial decisions, such as buying TVs or having fancy phones cars dramatically changed my judgemental perspective on those decisions.

For those of us not in poverty, we have social and economic status. We "fit into" society and understand how it's supposed to work.

Those who are in generational poverty, ie those who grew up in it and still live in it, live in a foreign world. They are basically not valued by it, since mostly they have minimal skillsets, education, or meaningful jobs. They live alien in a world not made for them. The things middleclass people worry about are things that are completely alien. Career growth? Which job to take? Who to be when you grow up? Investments? Retirement? Healthcare? These concepts have no meaning and are unintelligible to those in the poverty class. They have no status in society and constantly are in an alien world so those suggestions simply make no sense.

Status in the poverty comes from entertainment. The ability to entertain is something which can be achieved even in a socially marginalized/unvalued situation. Having a sweet career or nice house is seemingly impossible (and indeed the concept of "the future" is one of the alien concepts for those in poverty, most of whom live in constant tyranny of the urgent), but being the most fun person to be around can be achieved.

When you have nothing and live in a world where the concepts of "obtaining something" are alien to  you, you don't make decisions based on that - you make them based on what you know. And what is most often known is entertainment and social status obtained through providing entertainment.

And so you get people spending the entirety of their incomes on "pointless" stuff such as huge TVs and cable. It's pointless by middleclass values, but entirely beneficial by poverty class values.


What it also means is that it is nearly impossible for most of us, who do not live in a generational poverty mindset, to ever be able to "put ourselves in their shoes." Our concepts of value (building wealth, status through career/education, etc) and social status are simply not the same. We cannot "unlearn" how the world works. So when we end up having that income, we live a dramatically different lifestyle. We would live a lifestyle using middle class values with an income from a poorer class - which is very different than using poverty class values and an income that is from the poverty class.


ChrisLansing

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Re: The poverty line
« Reply #173 on: May 16, 2015, 08:24:28 PM »
So is the general consensus here that the poor are just beyond redemption, so to speak.  ( I ask rhetorically because I do not believe it)   

OK, some of the hard-core poor have addled their brains with drugs/alcohol/paint huffing, etc.   Not much left to work with.   

But there must be lots of struggling poor who are simply making bad decisions.    They aren't addled, they just don't have any financial acumen.   

Many of us who discovered MMM have made financial mistakes in the past - and most of us here are college educated people with decent jobs.   We've struggled with credit card debt, and bought new cars, and borrowed for vacations, and a  host of other "stupidities".     What we changed was our cultural baggage.   We don't have to keep up with the Joneses.  Why is it no one thinks it's beyond the ability of middle class people to better their financial situation by applying the MMM lessons, but somehow it's just beyond the ability of the poor?   

Agreed, the poor will see smaller slower gains, as the difference between income and outgo is smaller.  Still, why is it beyond them to better themselves?   

Arktinkerer

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Re: The poverty line
« Reply #174 on: May 16, 2015, 09:29:21 PM »
Good time for this ...

Lyssa

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Re: The poverty line
« Reply #175 on: May 17, 2015, 03:33:58 AM »
So is the general consensus here that the poor are just beyond redemption, so to speak.  ( I ask rhetorically because I do not believe it)   

OK, some of the hard-core poor have addled their brains with drugs/alcohol/paint huffing, etc.   Not much left to work with.   

But there must be lots of struggling poor who are simply making bad decisions.    They aren't addled, they just don't have any financial acumen.   

Agreed. And most welfare states have a pretty clear picture who has a whole cluster of different problems and who would just need some help writing applications. Unfortunately, at least the German welfare state does not act on that knowledge but bureaucratically uses the same instruments in every case. I know the Dutch tried a few years ago to custom tailor their services for and requests of welfare recipients. Some have just been given addresses to apply to, others payments have been made conditional at getting up every morning and showing up for practical exercises e.g. in carpentry. Others have been paid to go to the gym or to learn basic reading and writing skills. Sounded good when I've read about it some years ago. Does anybody know what the results are so far?

Imho good results would involve full time employment for the mere job seekers, some government-assissted employment for the ones practising their handy skills, better health of the ones going to the gym and just a bit more boring day to day normal for the ones practising basic reading and writing.

Arktinkerer

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Re: The poverty line
« Reply #176 on: May 18, 2015, 09:14:41 AM »
I know the Dutch tried a few years ago to custom tailor their services for and requests of welfare recipients. Some have just been given addresses to apply to, others payments have been made conditional at getting up every morning and showing up for practical exercises e.g. in carpentry. Others have been paid to go to the gym or to learn basic reading and writing skills. Sounded good when I've read about it some years ago. Does anybody know what the results are so far?


I would like to hear more about this.  One of the big issues, IMO, with government assistance in the US is that we have programs with defined assistance and requirements for who gets that assistance.  This cookie cutter approach means that no one has the authority to deviate from specified assistance.  That no one has the authority (or maybe no one has the incentive?) to say that someone else doesn't need this assistance.  But I also admit I don't know that I would like the reverse--what if you applied for assistance where you met all the technical requirements but a bureaucrat said no because they thought you could get by with out it?  I'm planning on using the ACA and managing my taxable income to make sure my family qualifies for subsidies as an example.  If I go to the trouble to arrange our finances to fit the rules and someone arbitrarily decides to cut us off I'd be quite angry.

Private charities can make such judgement calls based upon what they think is best for those involved.  That is just one reason why I much prefer them to government.   

One other thing I notice in conversations like these is we tend to paint people with the same broad brush ourselves.  "...the poor are just beyond redemption" or that they just need a hand, or that they are taking advantage of the system--all these can be true at the same time since "the poor" is a large group of people who are poor for different reasons.  If you measure poor by taxible income, many on this forum would be classified as "poor" yet they are living that way by choice.  Some measures of "poor" are just based upon the bottom x% of income.  By that definition you will never eliminate or reduce the poor until you reach communist utopia or extinction!