Friday, December 14, 2012

Poverty Pays

Every year, the federal government establishes the income thresholds to determine whether or not someone is in poverty.  Currently, if you are unmarried and without children and making less than $11,139 a year, the government then says that you are in poverty and eligible for some or all of the 80 different federal welfare programs and hundreds of state programs that are designed to be so-called safety nets for our nation's poor.  Similarly, if you are an unmarried parent with 2 children under 18 and making less than $17,374, you are also in poverty.

Once in poverty, you then have access to free health care through Medicaid; free food under the food stamp program;  free telephone and cell phone services; free child care; and the list goes on and on.  None of which is ever considered to be income or taxed.  In fact, if you are in poverty and do file a tax return, you will not only receive a refund for any taxes that you might have paid, but, under the Earned Income Tax Credit laws, you are probably eligible to get even more money back from the government.

But all these "free" programs have a value.  For example, being on Medicaid with two children is probably worth about $12,000 to $13,000 year because that would be the cost if that Medicaid recipient had to pay for that insurance themselves.   Knowing this, Senator Jeff Sessions and his staff set out to convert all these programs into cash equivalents so he could determine how poor the people in poverty really are in this country; and the results are shown in this chart:

Clearly, the chart shows that you are better off  being a household in poverty than being an average middle class household; and, by a factor of 20%.   Obviously, someone who knows how to work the system can do quite well for themselves.   This is why studies have shown that the poor in this country typically have a car, at least one big screen TV and, air conditioning. 

Something is seriously wrong with a system where you are better off being poor than working.  Maybe that's  why so many millions have given up looking for work or are satisfied to be in low paying jobs.  As noted before, our workforce is literally being destroyed; while, at the same time, we are creating a society that is increasingly dependent on government.  If you don't think that's a bad thing, just look at Greece today.


---  Federal Poverty Table:

--- The Source of Chart above:

---  Heritage Foundation: Understanding Poverty in the United States: Surprising Facts About America's Poor

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