Posted on 12/04/2025 1:53:20 PM PST by grundle
Our entire safety net is designed to catch people at the very bottom, but it sets a trap for anyone trying to climb out. As income rises from $40,000 to $100,000, benefits disappear faster than wages increase.
I call this The Valley of Death.
Let’s look at the transition for a family in New Jersey:
1. The View from $35,000 (The “Official” Poor)
At this income, the family is struggling, but the state provides a floor. They qualify for Medicaid (free healthcare). They receive SNAP (food stamps). They receive heavy childcare subsidies. Their deficits are real, but capped.
Every dollar you earn climbing from $40,000 to $100,000 triggers benefit losses that exceed your income gains. You are literally poorer for working harder.
2. The Cliff at $45,000 (The Healthcare Trap)
The family earns a $10,000 raise. Good news? No. At this level, the parents lose Medicaid eligibility. Suddenly, they must pay premiums and deductibles.
Income Gain: +$10,000
Expense Increase: +$10,567
Net Result: They are poorer than before. The effective tax on this mobility is over 100%.
3. The Cliff at $65,000 (The Childcare Trap)
This is the breaker. The family works harder. They get promoted to $65,000. They are now solidly “Working Class.”
But at roughly this level, childcare subsidies vanish. They must now pay the full market rate for daycare.
Income Gain: +$20,000 (from $45k)
Expense Increase: +$28,000 (jumping from co-pays to full tuition)
Net Result: Total collapse.
When you run the net-income numbers, a family earning $100,000 is effectively in a worse monthly financial position than a family earning $40,000.
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Exactly. Roughly 90% of American workers work for wages. That means they generally have access to health insurance through their employer. While the quality of that insurance obviously varies, for the most part it's good enough.
You paid in to somebody else's SS check, and now other people are paying in to make your SS check.
It's a ponzi scheme, or generational theft.
It's NOT an investment, so the term "return" has no real applicability to it. You get whatever Congress decides to give you.
And it’s only my supplement income.
So you're not stupid. That's good.
Not only that, but some of his numbers are suspect. The author gives a number of $32k/yr for two kids, or roughly $1333 per month per child. He gives no indication of how he arrived at that number.
A quick google search indicates that the average monthly daycare cost for an infant is $1282/mo, which is lower than his but still reasonably close. However, daycare for a toddler, typically defined as a 1-3 year old, drops to $1200/month, and it drops down to $800/mo for a 4 year old.
A reasonable 2 year separation between children would mean the costs would be about $29,784 the first year, assuming a newborn and a 2 year old. The 2nd year (1 year old and 3 year old) would be $28800 and the third year (2 and 4) would be $24000. By the fourth year, cost would drop dramatically as the older child is now in school and no longer needs all day daycare, and the youngest child would be 4 years old and costs would be about $9600/year. By the fifth year, child care costs would be negligible relatively speaking. All the while, the family income continues to increase.
The system is designed for dependency. It has nothing to do with a helping hand up. If it did benefits would phase out.
Just about everything the gooberment does has a clif of qualification. One penny above or below the limit and now you pay 100% of the incremental tax or penalty or lose 100% of the previous benefit.
Government sucks and is populated by idiots.
Not much of an incentive is it? I have been there and had to climb over that mountain to enter a different land so to speak. It was a bitter trip for me. It made me hate the government more than I ever did and still do. The only thing I hate more are the politicians and the voters that put a lot of them in office.
Not only, but such can also qualify for many non-cash benefits that are not counted as income.
I asked https://www.perplexity.ai/search/what-causes-and-what-can-resol-1xHgDwIiRwKT7pxSNWeOtA#5 to read the link, as well as Welfare and growing dependency upon government. What determines income in Federal Poverty Guidelines as to its veracity. It responded:
The piece is directionally right that the official poverty line is an old, very limited benchmark that understates current economic stress, but its claim that the “real” poverty line is about 140k for a family of four is more rhetorical and model‑driven than something standard data would support. Means‑tested benefits and under‑reported income (including cohabiting partners) do complicate the picture and can make some low‑reported‑income households better off than the official numbers suggest, but the scale of that effect is far smaller than what would be needed to overturn the broad story that many working‑ and middle‑income households face real financial squeeze.
What the article gets basically right
The poverty thresholds really do come from Mollie Orshansky’s 1960s “food‑times‑three” method, and they have long been criticized as a measure of minimum subsistence rather than of full participation in modern life.
Housing, childcare, and healthcare costs have risen much faster than general inflation and much faster than wages in many metro areas, so a family at or even above the median income can feel financially fragile, especially with children.
Benefit “cliffs” are real in many programs: as earnings rise, Medicaid, childcare assistance, SNAP, and housing subsidies can drop sharply, so marginal effective tax rates can be very high for some low‑ to moderate‑income families.
Where the 140k “poverty line” is more debatable
The author takes current food‑budget shares (around 5–7% for many households) and mechanically inverts Orshansky’s rule to get a multiplier of about 16 instead of 3, then applies that to argue a “crisis” line around 130–150k; that is an internally consistent thought experiment, but it is not a standard or widely accepted measure of poverty or basic needs.
National data show that the median income for a family of four is well below 140k, yet a large subset of those families are not in persistent arrears, eviction, or bankruptcy; that does not mean they are comfortable, but it suggests 140k as a universal “below this you’re in crisis” line is too high for many regions, especially outside high‑cost metros.
How non‑cash and under‑reported resources affect the picture
Official poverty measures historically ignored most in‑kind aid (SNAP, housing vouchers, Medicaid), though “supplemental” measures now try to include at least some of those benefits; this means the traditional poverty rate overstates hardship relative to what people actually consume, while the author’s critique focuses on the opposite problem—how much it costs to reach a more comfortable standard.
Non‑cash benefits can be very large for some low‑income families—free or nearly‑free health coverage, substantial food aid, housing assistance, and childcare subsidies—so households with very low reported earnings can have materially higher real living standards than their cash income alone would suggest.
Fraud, cohabitation, and “hidden” income
Program rules typically require counting the income of a cohabiting spouse, and in some cases a cohabiting partner, but enforcement depends on self‑report plus periodic checks, so there is room for misreporting (for example, claiming to be a single‑parent, single‑income household while receiving support from an unreported partner).
Studies and audits tend to find some level of misreporting and fraud in means‑tested programs, but the best evidence suggests it is a minority share of total benefits, not the dominant pattern; most recipients appear to be eligible under program rules, even if the rules themselves can be debated.
Pulling it together
The essay is strongest when it highlights: the archaic design of the official poverty line; the way housing/healthcare/childcare outpace wages; and the reality of benefit cliffs that punish incremental earnings.
It is weaker when it treats a single “participation” budget (with specific housing and childcare assumptions) as if it defined a hard national poverty line at ~140k, and when it underplays that many low‑reported‑income households receive substantial in‑kind support and sometimes additional unreported help (relatives, partners, informal work) that lift them above bare starvation.
If you like, a next step would be to build a simple spreadsheet for one or two specific regions, using local rent/childcare/insurance numbers, and compare: official poverty line, your own “basic needs” budget, and what various benefit packages would actually cover for a single‑parent vs. cohabiting‑couple scenario.
Even if that happens, we would revert to strongman control in states and municipalities. Soon, you would be equivalently taxed unless the people finally rise up and recognize their responsibility for how they vote.
Even people now living in HOAs see that phenomenon today. Our HOA dues have increased by a multiple of 6 over the past 25 years, while participation in community-building measures has disappeared. There are two tinpot BFs running this ethnically mixed neighborhood, and their cousins or friends get the extra jobs now deemed necessary because they don't engage the people to have block captains, do community clean-up days, etc. They don't assess fines as the by-laws would allow on the people who are making messes; they write checks to have things fixed for hauled away, then just raise the dues.
“Entire?” It really isn't. And let's not forget that women now aged 80 are the ones that entered the mainstream workforce back in the 1960s, meaning that neither mom nor grandmom is available for childcare, because they are still working to pay off that mortgage before retiring—and great-grandmom (the 80-year-old) may only be marginally capable of running after toddlers. We have become Sovietized.
Go back to India.
Benefits are color coded.
Social Security has passed several SCOTUS rulings.
Sorry but marginal income tax rates do not work like you say.
In an ideal world. Finding another person with conservative values that align is like finding a marital partner—not that easy. Even back in the 80s-90s when I was raising mine, elementary teachers, Sunday School teachers and other parents in the scout troop were wanting to demonstrate condoms on bananas and similar enlightened ideas.
One mother took several of our 8-year-old cub scouts on a "20-minute hike" to see a beaver dam at a mountain campsite to which we had driven for the weekend, and they didn't return for 8 hours, just as the other dads and moms were about to call the state police, our searches having failed. That mother had not followed directions from the man who knew the terrain. They had one soda and one small bag of chips with them for five kids and the know-it-all mom.
Granted, we were living in a city and that's the kind of default liberals who were available, but that's also where the work was. My solution was to move next door to an old-time Catholic Church, where multiple family-oriented grandmothers lived in rowhouses on the adjacent blocks. But today's grandmothers are the pot-smoking blue-haired anti-ICE protesters.
Right after you go back to Europe, I will.
That is most definitely not in place in Washington State, where the welfare gravy train has not been interrupted AT ALL yet.
The day one of these welfare leeches has to lift a finger and do any work will be like a bomb going off at the school where my wife works. There will be no other topic at dinner for months.
I asked ChatGPT about Indian CEO’s of American companies. Here we are:
Some prominent Indian‑origin CEOs:
Sundar Pichai – CEO, Alphabet & Google.
Satya Nadella – CEO, Microsoft.
Shantanu Narayen – CEO, Adobe.
Arvind Krishna – CEO, IBM.
Sanjay Mehrotra – CEO, Micron Technology.
Nikesh Arora – CEO, Palo Alto Networks.
Vasant (Vas) Narasimhan – CEO, Novartis.
George Kurian – CEO, NetApp.
Jayshree Ullal – CEO, Arista Networks.
Raj Subramaniam – CEO, FedEx.
Leena Nair – CEO, Chanel.
Shailesh Jejurikar – announced CEO, Procter & Gamble (from 2026).
PepsiCo did have a very prominent Indian‑origin CEO: Indra Nooyi, she eventually retired.
These are only a selection; current estimates suggest dozens of Indian‑origin CEOs across the Fortune 500 and other global blue‑chips.
“And when most families run up against that, then our country has a demographic disaster or an immigration / cultural disaster.”
It would be like it’s always been in this country excepting the magical period between 1950 and 2000.
We won’t see that again.
Well first of all, DRASTICALLY cutting the feds down to what is constitutional will STOP and possibly REVERSE the relentless hidden tax of inflation since around 1900. Since states are constitutionally forbidden from printing money and inflating the money supply, state and local issues would not increase inflation.
Secondly, in all of 100 years during the 1800's when federal gov't spending hovered around 5% GDP, your "strongman" scenario at the state and local level was not a serious issue.
Again the MASSIVE unconstitutional portion of the federal gov't is THE BIGGEST problem we have in America that literally threatens the lives, liberties, and wellbeing of the American People.
Well, you didn’t understand the statement.
Guess you’ve never paid IRMA because that is exactly how that works. One penny over the line and you go into the full amount of the next premium penalty bracket. Go into the next tax bracket and every penny over the bracket threshold is taxed for the full amount of the next bracket.
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