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War on Poverty - Social Security

 
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PostPosted: Wed Aug 06, 2014 11:18 pm    Post subject: War on Poverty - Social Security Reply with quote

PeakTrader:

Yes, we need to spend more on “bridges, roads, sewer systems, etc.”

There are budget constraints and trade-offs.

Government has decided spending on the poor is more important.

It seems, the “War on Poverty” was successful putting a floor on poverty, to virtually eliminate “deep poverty.”

However, it also seemed to place a ceiling that trapped many in poverty.

For example, the poverty rate was falling sharply, until the “War on Poverty” was fully implemented and extended after 1964. Chart:

http://www.washingtonpost.com/blogs/ezra-klein/files/2012/07/poverty_time.jpg

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Mikev:

PeakTrader, there are alternate measures of poverty that are considered much better now. The one you cite doesn’t include anti-poverty tax refunds, like the EITC. This is a good article on the problems with the poverty rate you are citing:

http://www.vox.com/2014/7/29/5946395/eitc-poverty-supplemental-measure-official-threshold

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PeakTrader:

According to the Census Bureau:

“Individuals or families are “poor” if their annual pretax cash income falls below a dollar amount, or poverty threshold, that the Census Bureau determines using a federal measure of poverty that is recalculated each year.”

Chart:

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/shirakawa/Poverty%202009.jpg

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Menzie Chinn:

Peak Trader: You should really try to get information from other places other than ZeroHedge. Here is some serious research: Thompson, Smeeding, “Inequality and Poverty in the United States: the Aftermath of the Great Recession,” FEDS Working Paper (Federal Reserve, 2013)..

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PeakTrader:

There are many causes of poverty.

However, over the past few decades, there has been an explosion in spending on means-tested welfare programs (beyond Social Security and Unemployment insurance), reaching $1 trillion a year, e.g. “providing cash, food, housing, medical care, social services, training, and targeted education aid to poor and low-income Americans.”

And, people respond to incentives. For example:

“Rep. Gwen Moore (D-Wisconsin)—herself a former welfare recipient—acknowledged in her oral testimony: “I once had a job and begged my supervisor not to give me a 50-cents-an-hour raise lest I lose Title 20 day care.””

PolitiFact – Wisconsin

http://www.politifact.com/wisconsin/statements/2012/dec/30/paul-ryan/anti-poverty-spending-could-give-poor-22000-checks/

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axt113:

Peaktrader,

The problem with your argument is that if the government were to spend less on poverty, the rate of poverty would increase, not decrease.

At $7.25, a 40 hour working person would make about 15K a year, not enough to live off of in most areas (assistance programs help to keep people above poverty in these cases).

even a $0.50 increase per hour that you attribute to Gwen Moore refusing, would only take that person to 16K

Still not enough to live off in most areas.

As a result more people would go into deep poverty, and the extra money freed up would end up as useless (economically speaking) tax cuts for the rich, who tend to hoard money. This will merely create more social problems and a greater potential for social strife in coming years.

If you really want to end the need for spending on food stamps, and other poverty assistance programs, do 5 things:

Spend on fixing current infrastructure.

Invest in new infrastructure for the 21st Century (High speed internet, high speed transportation, clean renewable energy, etc.)

Raise Minimum wage to $11 Dollars then index to CPI, so it maintains its purchasing power going forward.

Make Higher education (Post HS Education) Free and forgive current Student Loan Debt

Invest heavily in R&D

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PeakTrader:

axt113, how do you know the poverty rate will increase? Maybe, people will make different choices, and others will learn from the choices they make.

What if Gwen Moore’s supervisor needed her to work overtime? How will workers move up “the ladder” when they won’t take the first step?

And, what about the guy who worked through college and didn’t take out student loans, does he get money too?

The explosive growth in means tested welfare has been crowding-out government spending almost everywhere else.

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axt113:

So you assume that poverty is entirely choice based, sorry, but facts show that those born into poverty stay in poverty, its not choice, but environment that keeps people in poverty.

Also College is too expensive to work through it as minimum wage earnings in a year is less than the cost of one year of college.

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PeakTrader:

I stated above, there are many causes of poverty.

It seems, you want to do nothing about the vicious cycle you talk about. I suspect, you want to keep feeding, and expanding, it.

Not every worker makes minimum wage.

And, I’m sure, many students worked, while in school, and either didn’t take out student loans or limited them.

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Nick G:

"I suspect, you want to keep feeding, and expanding, it."

Oh, my. You gotta stop reading those conservative websites – they’re full of odd ideas. Heck, who has more incentive to keep people poor than employers, who have more leverage when setting wages if their employees don’t have portable benefits (like health insurance), and if they’re terrified of falling into poverty due to losing a job?

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PeakTrader:

So, your solution is to ignore the results and continue keeping generations in poverty.

We can promote work, and even careers, with labor standards and safety nets.

As a matter of fact, without work, we couldn’t afford labor standards and safety nets.

Your statements, including prior statements, are political rather than economic.

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PeakTrader:

Younger workers will pay more and receive less in Social Security.

[According to Social Security: "...the average life expectancy at age 65 has increased a modest 5 years (on average) since 1940."]

And, they’ll have to work harder to provide the goods & services a huge retired population will demand.

Other taxes will likely need to rise too.

****

The increase in life expectancy at age 65 is modest and the retired population will be huge.

So, younger workers won’t benefit much, collecting Social Security, from a longer life expectancy..

Not only will fewer younger workers support a larger retired population, they’ll be poorer too (e.g. from the depression, student loans, and Obamacare).

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