New “poverty” numbers measure income inequality, not purchasing power

Hotair ^ | 11/07/2011 | Tina Korbe

[fruser1]

The biggest problem w/focusing on income as an indicator of poverty is that it does not include assets.

If a middle class person retires, their income drops markedly, but they are actually doing quite well.

[Mr Ramsbotham]

I ran my recumbant bike for 10 miles the other day, and felt fine. Later I discovered that my odometer was off and I had really cycled 15 miles. Then I started getting really sore.

[The_Victor]

They should call it the Suypplemental Income Envy Measure.

[sickoflibs]

RE :”Called “The Supplemental Poverty Measure,” the new indicator suggests 49.1 million Americans face poor economic conditions, compared with just 46.6 million under the standard measure. That sounds “grim,” as an MSNBC headline put it — but, just as the standard measure is misleading in many ways, so, too, is this new indicator.
“ The new measure places income thresholds for poverty on a built-in escalator that rises automatically in direct proportion to any improvement in the living standards of the average American,” Heritage Foundation expert Robert Rector said in a statement. “So even if the real income of every single American were to double, the new measure would show no drop in poverty because the income thresholds would also double. The result is that, over the long term, poverty can be reduced only if the incomes of the ‘poor’ are rising faster than the incomes of everyone else.”
In other words, the new tool measures income inequality not purchasing power. Or, as Rector put it, “The old measure told us how much one household can purchase; the new measure tells us how much one person can buy relative to others.
”That’s convenient for a government that wants to pursue a redistributive agenda”

Worth noting!

The only way to reduce poverty using this metric is to take more away from all of us. If a Reagan was to come along and raise the standard of living for everyone in the USA, it would not count as moving anyone away from poverty.

Ironically it's inflation that can hurt the poor, inflation caused by 'demand side' theory.

[Mouton]

Well then, given this measurement, with about 50 million at the poverty level in the US, that is almost 20% of the population living in poverty. So, how about we give them a helping hand. Why not just move them to Mexico, say, Tijuana, where their level of wealth will instantly put them in the uppper levels...problem solved.

When I hear these assumptions made, I just wonder if any of the dopes making these assertions, and those believing them, have any idea of what “poverty” actually looks like. Proverty in my mind is not living in a structure that is heated and cooled, with a TV, telephone, refrigerator, furniture and a vehicle. Most of the poor in the world would consider that living like a prince.

[RayChuang88]

This report is clear indication we need major income tax reform.

Why? Because the current income tax system discourages savings and capital investment in the USA and also tilts the system in favor of the rich, who can afford the best tax lawyers and accountants to "work the system" to benefit themselves to the exclusion of the lower classes. With something like the Steve Forbes no-loophole 17% flat-rate income tax, we remove this huge barrier to economic upward mobility, and that ends up benefiting everyone.

[Mouton]

The only way to reduce poverty using this metric is to take more away from all of us.

and when they come to get it here, I intend to give it to them about 60 cents a shot worth.

[Mr. K]

How can this author be so cruel?

Doesn’t he realize “the poor” in this country are probably forced to be using LASY YEARS iPhone?

And the steaks and lobster they buy with their food stamps are dropping in quality ALL THE TIME

And their Cadillac Escalade they bought with their off-the-books job DOES NOT EVEN HAVE THE OPTIONAL LEATHER SEATS!

How dare you look down in their misery

[tnlibertarian]

I ran my recumbant bike for 10 miles the other day, and felt fine. Later I discovered that my odometer was off and I had really cycled 15 miles. Then I started getting really sore.

This post illustrates why I wish FR had a "Like" button. How in the world does whether or not Mr. Moneypants buys another yacht affect my putting food on the table?

[cripplecreek]

Poverty yesterday.

[Vaduz]

Obama&Co. have made things so bad that I had to put three items on lay-a-way at the 99 cent store.

[Reeses]

unavoidable expenses — like health care

Oh that one's real avoidable. Just check out the emergency room at any hospital. It will be full of foreign born people getting free routine medical care.

If you add up the benefits and government overhead costs of one typical welfare family, their average taxpayer cost is over $4,000/month. To earn that much after taxes someone would need to invest $2,000,000 in T-bills. Welfare families are virtual multimillionaires. It's no wonder that by hook or by crook 5 billion third worlders do everything they can to get here.

[CaptainAmiigaf]

Poverty in the USA is most often measured by TAXABLE income. A sixtyish man I often sail with is statistically “poverty stricken” as he has NO income at all. Of course he lives very well off the great amount of money he always earned BEFORE he retired, but has no INCOME today.
Also, how many Americans know what REAL POVERTY is as lived around the world? “Poverty” in the USA is upper middle class in great portions of the world we live in.

[GOPJ]

“ The new measure places income thresholds for poverty on a built-in escalator that rises automatically in direct proportion to any improvement in the living standards of the average American,” Heritage Foundation expert Robert Rector said in a statement. “So even if the real income of every single American were to double, the new measure would show no drop in poverty because the income thresholds would also double.

Liberals inventing new ways to lie every day - yike! Lucky for them the brain-dead MSM won't catch them at it.

[KarlInOhio]

Let me guess. They probably count gross income but don't count welfare and refundable income tax credits, so I look "rich" before being taxed, but no matter how much money is taken from me to give to the "poor" it will never raise them out of poverty. If someone's income is just below the poverty line, but once you add the value of free housing, free food, free medical care and a nice cash supplement from the government can anyone rational still count them as poor. In fact, since the government's programs are set up to penalize people for working, all of those anti-poverty programs probably create more poverty (as counted) because there is an incentive to not work (well, at least not on the books).

[Bigg Red]

My question is how the Census Bureau gathered such data. Income inquiries are not included in the mandated questions.

[TheOldLady]

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[Reeses]

How in the world does whether or not Mr. Moneypants buys another yacht affect my putting food on the table?

Mr. Moneypants quickly runs out of things to buy. There is only 24 hours in a day no matter how rich someone gets. They can only drive one car at a time, talk on one cell phone, watch one big screen TV, sleep in one bed, just like the rest of us. So they end up *investing* most of their surplus, often very smartly, indirectly creating jobs for the rest of us. If the government gets their hands on it they will destroy that wealth, and we will all be that much poorer for it. The biggest reason to let rich people keep their wealth is because they do not waste it on government hirelings and other moochers.

[Buckeye McFrog]

Excellent, excellent point.

Everybody needs to check out the Travel Channel footage of children hanging around the city dump in Managua, Nicaragua, waiting for the trucks to arrive so they can start sifting through the new garbage for scraps to eat.

Now THAT’S poverty! We should be doing something about THAT!
Poverty does not really exist in this country, but people are too selfish or insular to realize that and to be grateful.