Economists: US Poverty On Track To Hit Highest Level Since 1960s

First time accepted submitter eentory writes "According to economists and other experts surveyed by the Associated Press, the U.S. poverty rate is on track to hit its highest level since the 1960s. The consensus among those surveyed is that 'the official poverty rate will rise from 15.1 percent in 2010, climbing as high as 15.7 percent.' Just a 0.1 percent increase would put the poverty rate at its highest since 1965."

Comments

Re:But this can't be right

[polar red]

working their way down to the grunt workers

No, they wealth is trickling SIDEWAYS into tax-shelters.
http://www.businessinsider.com/rich-21-trillion-31-trillion-offshore-tax-havens-2012-7?op=1

Poverty isn't what it used to be

[ShanghaiBill]

Says it all.

No, it doesn't say it all. It doesn't say that the poverty line is much higher today than in 1960, so implying that people are worse off is nonsense. It also doesn't say that our definition of "poverty" is silly: it only counts income, and ignores assets. I live in Silicon Valley in a nice neighborhood with a paid off mortgage, and my wife drives a snazzy BMW. I run my own company and usually make a solid six figure income. But in 2010, I had several employees in R&D mode, my net income was nearly zero, I fell below the poverty line. I actually qualified for some government handouts. That is seems absurd to me.

Re:Relative Poverty Value?

[Hatta]

It seems to me today that "poverty" is on par with 1960s luxury, so what's the point?

In 1960 a college graduate could own a home and support a family on one full time salary. In 2012, positions like that are vanishingly rare.

At what point are these people choosing poverty

Perhaps you didn't notice the recent financial crisis and the boom in unemployment. Do you think these people "chose" to be unemployed? Did you choose to be this obtuse?

Let's really have a look at spending

[Bysshe]

Check this out: Government spending by president. This shows that while Obama may have been spending a lot during a recession, something that many economists encourage to balance out the "good years", the real culprits of out of control government spending are Reagan, Bush and Bush.

Reagan can also be somewhat forgiven due to the economic problems in the 80s and encouraging government spending to make up for the loss in business generated GDP, however he was there for 8 years... and that recession did not last 8 years.

Just looking at the fiscal realities, Clinton was by far the best president if it weren't for the repeal of the Glass-Steagall act which set the stage for "too big to fail" banks. Still from a spending standpoint he's by far the best.

Obama is overspending driven by rampant bankster cronyism stemming originally from the Bush era and into the Obama years. This started with TARP (Bush) and continued into QEII, III, and further. There's a good argument to be made that much of the current spending is momentum spending from the second Bush term.

Ultimately we have to look beyond the last 3.5 years and really examine longer term track records before we conclude that the Dems overspend or the Repubs drive up debt.

Re:Rent seekers love government regulation

[Curunir_wolf]

It's only "worse" if I accept your premises about what it means. We had a lot less regulation in the past than we do now, and entrepreneurial opportunities were much greater. It has recently been estimated by the Small Business Administration that small businesses pay over $10,000 per employee in regulatory costs alone. It costs a huge amount of money today to start even a modest business.

You're also downplaying the "not easy" part of whatever regulation you're supporting as "proper" - and if it's anything close to the current regime, then "not easy" is downright impossible. And the reason for that is the costs for not playing the Lobby game become much higher than playing the Lobby game. These days, if you don't play, you automatically lose. That invites corruption, and it's almost impossible to rout out.

Just look what Obama has done: to appear unbeholden to "lobbyists", he pledged not to accept donations from them. So the people that register as lobbyists don't get access. Instead, there are unregistered "bundlers" that do all the massive fundraising, and since they are not required to register, their activities are much less transparent.

Re:they aren't capitalists

[iluvcapra]

This stuff's been floating around for years:

Yer Adam Smith in Wealth of Nations:

The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. A tax upon house-rents, therefore, would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be anything very unreasonable. It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.

There is an argument that this quote is taken out of context, in that it appears in a long passage where Smith denigrates various methods of tax collection, but most people agree that even if he is opposed to a tax on income, he is supportive of a tax regime which is progressive in effect, regardless of how it's collected.

Hayek in Road to Serfdom:

Nor is there any reason why the state should not assist individuals in providing for those common hazards of life against which, because of their uncertainty, few individuals can make adequate provision. Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance, where, in short, we deal with genuinely insurable risks, the case for the state helping to organise a comprehensive system of social insurance is very strong. There are many points of detail where those wishing to preserve the competitive system and those wishing to supersede it by something different will disagree on the details of such schemes; and it is possible under the name of social insurance to introduce measures which tend to make competition more or less ineffective. But there is no incompatibility in principle between the state providing greater security in this way and the preservation of individual freedom.

The counterargument to this is that the text systematically rejects any mechanism by which a state could operate such a system, only that it should "help to organize" such a system. So I guess it depends on your sense of the term "help."