"WASHINGTON (AP) -- Squeezed by rising living costs, a record number of Americans — nearly 1 in 2 — have fallen into poverty or are scraping by on earnings that classify them as low income.
The latest census data depict a middle class that's shrinking as unemployment stays high and the government's safety net frays. The new numbers follow years of stagnating wages for the middle class that have hurt millions of workers and families."
http://finance.yahoo.com/news/census-sh … 40568.html
I guess that depends on one's criteria for "low income." Some people who fall under the category of "low income" seem to do pretty well.
But I'm no economist, so...
IT doesn't matter if she's an economist or not, her argument is correct.
The people with the Macro Ph.D's can't tell the difference between "Supply" and "Demand"..
"Twaaaa, I have a nobel prize, twa, and GDP measures Production, twa... Production is supply, twaaa, and to calculate production we must add together how much people BUY, which is demand... twaaaa..."
("Twa" should be read like a rich arrogant jerk would say it)
Poverty is COMPLETELY relative, and if we even CONTINUE to define it for legislative purposes, we'll just find ourselves in a mess as each new group of politicians strives for more votes by raising poverty by 1% each year.
"Crap", says Mitt Romney, "I need just 3,000 more votes.... I know! I'll hand out more benefits to people. But who? The needy? ... no, I already have their votes... I KNOW! The 'just-above-the-current-definition-of-poverty-level'! I'll just change the poverty line by 2%, and put my picture on their new hand outs! BOOM! there we go!"
Deeds! You HAVE to see how dangerous this is! Letting the government define poverty leads to political games with people's futures.
Once again, I need to remind you that in this country, WE are the government. Our reps may be corrupted by the influence of money, but the system gives us the power to lobby them.
When it comes to defining poverty, those reps usually rely on expert studies. Should they call you instead? Who is it YOU want to decide who gets help and when?
Some local yokel who doesn't like blacks, gays, atheists or Libertarians? Or should the decision be a matter of law and policy - which means, dear Evan, GOVERNMENT.
WE are the government?
It didn't sound that way in the "I told you he would sign it" forum!!
It sounds more to me like our politicians are scumbags who don't care about what we want, and they just want bribes from lobbyists.
... that sounds very similar to what you've been saying, actually...
So which is it? Are our politicians Corrupt? or are they actually working for us?
Hrdly surprising the US economic model is flawed, and the pure free market capitalism it pushes has got it in quite a jam and left it with no solid escape route, most countries have a solid manufacturing, industrial, and resource base, The US lacks thisdue to an unmoderated short term capitalist growth plan and now its stuck in a rut.
Oh, c'mon, Ralph. Even though you're a Keynesian, you HAVE to admit that the US does NOT have a free market.
In fact, to BE a Keynesian, you have to completely abandon the free-market. Keynse's central point was that the free-market fails (it doesn't) and that the government needs to increase spending (which it doesn't).
PURE FREE MARKET CAPITALISM!?!?!
I'm going to CHOKE!! How can the words "US" and "Free market" be in the same sentence without the words "does not have a" in between them!?
I'm going to have to find a cute hubber who would like a room mate.
I think they set the poverty threshold for a family of four in the amount of $22,314.
Para, I will also add this info. Thanks...
http://www.census.gov/newsroom/releases … 1-157.html
I wrote a hub about class inequalities in the US and the problem with "low income" calculations is that it hasn't changed in years! Even with inflation and the instable value on the US dollar, many are considered to be below the poverty line.
When I run for Congress, I'm going to set the poverty level at $50k. That way I get more votes.
The lower the income, the worse job loss is too. With limited or no assets to draw from, loss of employment becomes a catastrophe rather than a matter of belt tightening.
But if you believe the ugly lies of the Right, these people can just run down to the local welfare office and have wealth showered upon them. That's entirely a figment of RightWinger imagination, but you'll see it stated as fact all over the internet.
For those who want the truth, your State probably has on-line pages where you can check eligibility and see actual benefits. The reality you'll find there is not what the Right wants you to believe.
Define poor using absolute terms.
What's that? It's impossible.
Poor is always relative. That doesn't mean it doesn't exist.
You're right, it exists, but it's impossible to define. Thus making laws or judgements based off of it is nothing short of foolishness.
There is one person to who 100% of world's population else is poor.
There is one person to who 100% of the world's population is rich.
Yeah, that's great. So we should just ignore it because it's hard to define?
Another wonderful Libertarian philosophy, I assume.
Let's trash all the welfare programs because "poor" is relative!
Words fail me.. Or more accurately, would get me banned.
Pcunix is right just because its hard to define doesent mean it should be ignored and we definitely do need laws and measures to help combat it, everything is relative the issue is finding a middle ground.
Yes, I agree! Let the thieving one percenters keep their hands off our money.
They stole the money from the populace through government bailouts.
Look at that! The government was wrong!
Naive Evan, they stole it through predatory pricing and other such shenanigans without any help from governments.
Well that's not entirely true.They did infiltrate government and twist it to suit their ends but hat's hardly the fault of government, more the fault of the electorate who allowed it to happen.
What does predatory pricing mean, again?
Pricing things low so that people will buy them?
... ... ok....
No, pricing as high as the market will stand.
Well, I would define it as pricing high when people have no choice. Like charging $10 to cash a check when the choice for the working poor is getting to somewhere else twenty miles away. Or charging $5.00 for a bottle of water after a hurricane..
How about where people think they have no choice?
Like the latest phone or the latest OS, or maybe fashion items even?
No, I'd call that free market.
But I would either tax retained earnings or require distribution to shareholders. Companies get too powerful when they are allowed to hold on to billions of dollars.
Predatory pricing in a free market?
How free is the market really, you buy a car from one of perhaps half a dozen manufacturers, a burger from about as many franchises, what about the drugs (legal) again, not many.
It's a free market providing you want what you are given.
So long as you want what you are given?
that's a horrible business model, and the company with that model would immediately go out of business.
Imagine going into a wal-mart, and just having one long line. At the end of it is some guy handing out random things and you have to pay $200 for whatever they give you.
Screw that, I'm going to Target.
C'mon, John. You know as well as I do that "you want what you are given" is only found in Communist countries.
Is it really! I think not.
I went to my local supermarket this afternoon and was presented with huge displays of what they wanted me to buy. Yes, they did stock other things as well but for those I had to either gaze up into the upper regions or almost crawl on my hands and knees.
I could of course have gone to another supermarket, but why bother when I would have the same choices and at remarkably similar prices.
Freedom of choice is an illusion unless it's the seller doing the choosing.
OH ye GODS!!!
They wanted you to buy things?
It's almost like you WENT there TO buy things!!
And they HAD them!!
OH ye GODS!!! Save us from this land of no-want!!!
"PLEASE JEEBUS! I CAN GET WHAT I WANT WHEN I WANT AT THE LOCATIONS THAT I WANT!! SAVE ME !!! SA~~~AVE ME~~~EE!!!"
THE FREE MARKET IS WHEN PEOPLE HAVE NO CHOICE?!?!?!
Oh good GOD!! I think I just fainted!!!
*didn't actually faint*
Well, I'm feeling woozy nonetheless.
How can you claim you have no choice?! I opened up my newspaper today (one of the 5 I could have received) and saw 5 different computer stores each selling 10+ different computers for a wide variety of prices!!
Then I opened up the 15+ grocery store ads and saw the - literally - thousands of items that I could have bought!!
Then I realized that, even if I wanted to go to Kroger (a grocery store) there are about 6 in a 20 mile radius that I could choose to go to!! If I didn't like employees at the deli at one, I could just drive to another!
And my car! I could have chosen to buy any of the hundreds that were out there! Honda, Toyota, Mazda, Ford, Chrysler, BMW, Audi, VW... each company has more than 5 different kinds of cars (at least) that I could have chosen to buy!!
I don't even have to own a car!! There's a privately owned bus system outside my home! I could even just ride a bike - any of the thousands of bikes I could buy - and there are grocery stores, electronic stores, furniture stores, and restaurants in a 3 mile radius from my home!!
And my home!!! There are almost an infinite number of homes that I could move to live in!
And each store was trying to make their prices LOWER Than the others to convince ME to GO THERE!!!
GOOD GODS!! NO CHOICE!!! ARE YE DAFT!?
Pcunix! Please!! This statement of yours is absolutely false! You MUST acknowledge this! Otherwise... I don't even know!! For my own sanity! You MUST acknowledge that free-markets give you choice!!
Even if you hate free-markets, you have to admit that they give you choices!
You didn't actually understand what I said, so there is no point in responding to your questions.
nonsense - Jon asked "what about when you have no choice", and you said "i would call that the free market"
(not exact quotes, I can only respond via "most recent" instead of "chronological", and the quotes don't appear)
You just said that when people don't have a choice, it's the free market.
ROFL - so you guys want to outlaw "predatory pricing", but you can't agree to its meaning?
$10 for a loan to a high-risk customer?
... what's wrong with that if the people choose to do it?
They COULD go to a bank... why can't they get loans? Oh, that's right - bad credit scores.
Credit Scores mean something, and you can improve your credit score by asking someone who's allowed to see it "how can I improve my credit score?".
The $10 loan cost creates a HUGE incentive on people to spend their money properly.
... pricing things in a way that people will still pay?
Profits are signals that an area needs help with something. And through greed people will supply what others need and want.
After Katrina, they started throwing the price-gougers in jail for providing ice at inflated prices EVEN THOUGH the people were lining up to pay the price.
Guess what happened?
THE PEOPLE DIDN'T GET ICE.
it can't be define using absolute term, as it is a relative concept -- statistics and economics are not absolute. It can be used however as an indicator, better than nothing to gauge economic class.
Heard about this on the news this week and it sent shivers down my spine. That's really scary in the richest country in the world don't you think?
I am sorry and i dont want to sound rude but the US isnt the richest country in the world its not even in the top 10.
It is disturbing and most likely will not go away any time soon, if ever. At the same time, I am not sure how I feel about the increasing level of begging, and I'm not a right wing or a left wing or any wing. I'm a compassionate, giving, hard working human being. Government does play a part in how a country takes care of its poor, businesses need to keep jobs here and pay fair wages. People need to be willing to accept jobs with lower pay and become creative in ways to bring in income. There are beggars who make very decent money, from doing nothing more than begging or having others beg for them. Now there are online begging sites. I was raised to work and not ask for money. I don't know the answers; there are no easy ones. But to blame and see oneself as a victim is hardly the way to rise out of the heap.
This was a long time coming. Inequality has been rising for decades in the US. The definitions of "poverty" and "low income" used by the government are not perfect, but they are reasonable. And they do give a valuable picture of the socioeconomic situation in this country.
Decades of flawed and inconsistent tax policy ranging from excessive taxation on some to too little on others; atrocious public education; narrow-minded small government-ism; incompetent economic management and others have brought us to this point.
The question is whether the US can turn things around before a large majority of people are impoverished and opportunity-less. In other words, before the US officially becomes the largest developing country.
Living by Default--American Airlines vs. the underwater mortgage homeowner--James Surowiecki in the New Yorker.
We normally say that a company “went bankrupt,” implying that it had no choice. But when, recently, American Airlines filed for bankruptcy, it did so deliberately. The airline had four billion dollars in the bank and could have kept paying its bills. But it has been losing money for a while, and its board decided that it was foolish to keep throwing good money after bad. Declaring bankruptcy will trim American’s debt load and allow it to break its union contracts, so that it can slim down and cut costs.
American wasn’t stigmatized for the move. Instead, analysts hailed it as “very smart.” It is now generally accepted that when it’s economically irrational for a company to keep paying its debts it will try to renegotiate them or, failing that, default. For creditors, that’s just the price of business. But when it comes to another set of borrowers the norms are very different. The bursting of the housing bubble has left millions of homeowners across the country owing more than their homes are worth. In some areas, well over half of mortgages are underwater, many so deeply that people owe forty or fifty per cent more than the value of their homes. In other words, a good percentage of Americans are in much the same position as American Airlines: they can still pay their debts, but doing so is like setting a pile of money on fire every month.
These people have no hope of ever making a return on their investment in their homes. So for many of them the rational solution would be a “strategic default”—walking away from the mortgage and letting the bank take the house. Yet the vast majority of underwater borrowers keep faithfully paying their mortgages; studies suggest that perhaps only a quarter of all foreclosures are strategic. Given how much housing prices have fallen, the question is why more people aren’t just walking away.
Part of the answer is practical. Defaulting (even in so-called non-recourse states) is still a lot of trouble, and to most people it’s scary. In addition, homeowners are slow to recognize how much the value of their homes has dropped, and have inflated expectations of how much it will rise in the future. The biggest hurdle, though, is social: while companies get called “very smart” for restructuring their contracts, there’s a real stigma attached to defaulting on your mortgage. According to one study, eighty-one per cent of Americans think it’s immoral not to pay your mortgage when you can, and the idea of default is shaped by what Brent White, a law professor at the University of Arizona, calls a discourse of “shame, guilt, and fear.” When the housing bubble burst, the banking industry was terrified by the possibility that homeowners might walk away en masse, since that would have stuck lenders with large losses and a huge number of marked-down homes. So strategic default was portrayed as the act of dishonorable deadbeats. David Walker, of the Peterson Foundation, waxed nostalgic about debtors’ prisons, and John Courson, the head of the Mortgage Bankers Association, argued that defaulters were sending the wrong message “to their family and their kids and their friends.”
Paying your debts is, as a rule, a good thing. But the double standard here is obvious and offensive. Homeowners are getting lambasted for doing what companies do on a regular basis. Walking away from real-estate obligations in particular is common in the corporate world, and real-estate developers are notorious for abandoning properties that no longer make economic sense. Sometimes the hypocrisy is staggering: last winter, the Mortgage Bankers Association—the very body whose president attacked defaulters for betraying their families and their communities—got its creditors to let it do a short sale of its headquarters, dumping it for thirty-four million dollars less than the value of the building’s mortgage.
When it comes to debt, then, the corporate attitude is do as I say, not as I do. And, while homeowners are cautioned to think of more than the bottom line, banks, naturally, have done business in coldly rational terms. They could have helped keep people in their homes by writing down mortgages (the equivalent of the restructuring that American Airlines’ debt holders will now be confronting). And there are plenty of useful ideas out there for how banks could do this without taxpayer subsidies and without rewarding the irresponsible. For instance, Eric Posner and Luigi Zingales, of the University of Chicago, suggest that, in exchange for writing down mortgages in hard-hit areas, lenders would take an ownership stake in a house, getting a percentage of the capital gain when it was eventually sold. Lenders, though, have avoided such schemes and haven’t done mortgage modifications on any meaningful scale. It’s their right to act in their own interest, but it makes it awfully hard to take seriously complaints about homeowners’ lack of social responsibility.
Of course, many borrowers made bad decisions and acted irresponsibly. But so did lenders—by handing out too much money and not requiring sensible down payments. So far, banks have been partially insulated from the consequences of those bad decisions, because Americans have been so obliging about paying off overinflated mortgages. Strategic defaults would help distribute the pain more evenly and, if they became more common, would force lenders to be more responsible in the future. It’s also possible that a wave of strategic defaults—a De-Occupy Your House movement—would get banks to take mortgage modification more seriously, which would be all for the better. The truth is that banks have been relying on homeowners to do the right thing. It might be time for homeowners to do the smart thing instead. ♦
ILLUSTRATION: Christoph Niemann
Read more http://www.newyorker.com/talk/financial … z1gudqNn25
http://www.newyorker.com/talk/financial … surowiecki
Ralph, thanks for the excellent link. I especially like the last line.
Strategic default may be the smartest option in some situations.
The HARP/HAMP refinancing/loan modification processes are exceedingly difficult to navigate through. Many homeowners simply give up. I read recently that Fannie Mae has initiated some changes to their HARP program, enabling more borrowers to qualify. Homeowners need to educate themselves with all of the options and be assertive in their endeavors.
USA has no money for new program , Like Rome the USA imperialist empire it is falling, we find lots of Americans running across the border to look for jobs in Canada
For the 1% who has most of the control, much of the 99% wish they were the 1%. Please, don't spent money you don't have because the American dream is now a myth or your not in the special 1% club.
America was $75 million in debt in 1791...five years before George Washington wrote his Farewell Address.
It ain't like the government has been taking dollars from We the People just in the past fifty years....
New poverty guidelines can make it whatever the govt wants.
why don't they use the proper figures for unemployment.
Most likely just GOP propaganda.
Other painful fact right now:
In America, there is 1 job opening for every 4 people actually looking for a job.
There's always job competition, but the ratio usually isn't that bad. By simple arithmetic, that means that there's no way all the people who have been laid off during the recession can get jobs, no matter how qualified and how diligent they are in trying to get a job.
There's another more insidious problem. When well-qualified, well-trained people with expert skills and acquired knowledge get laid off, they represent a loss of human capital, resources and investment. It may be a college degrees. It may be on-the-job training. If they are forced to take another, lesser job, that human capital is lost and can't be regained.
For example, I've got a few degrees in the humanities. When I was a graduate student instructor, I had a packed classroom because students of other instructors would cut their sessions to attend mine (according to the other TAs, anyway). After I left grad school, I saw how bad the teaching job market was, and decided I just couldn't face it. We get more waves of teaching layoffs several times a year. Even if I get a job, it'll only be for a semester or year at most, then it's back to another job search. Therefore, I've been trying to earn a living online instead. I'm making less than minimum wage, so I spend less, and my job doesn't use my skillset. Students don't get the benefit of my years of training and preparation to teach.
For another less egotistical example, my next door neighbor was a programmer who worked his way up to middle management in a high-tech firm, and lost his job to downsizing. After many months, he's taken a secretarial job in a real estate agency with a fraction of his former salary. Even if he works his way back up the ladder, his significant skills will not be utilized.
Multiply that by the millions of people out of work, and you will see a sort of "brain drain" and loss of human capital in this country which new jobs can't entirely offset. Additionally, since laid-off workers take new jobs with significantly lower salaries, the economy recovers slowly because people still don't have money to spend (and are probably paying off all the debts they accrued while laid off.)
The other fact that everyone is ignoring is that, during economic busts, prices go down.
But they haven't been because we've quintupled our money supply in under 5 years.
When prices go down, the money that people stored up can last longer, and can sustain people through hardships until new jobs open up.
Also, when I go shopping, I see "help wanted" signs everywhere. This "there are no jobs" nonsense is just that: nonsense. It's just that people are holding out for jobs that pay more.
If prices were going down, then lower paying jobs wouldn't be as unattractive.
Anyway - random bit of economic knowledge that shows that rampant inflation is coming.
by Goodpal 4 weeks ago
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