Sunday, September 25, 2016

Could We Eliminate Poverty In The U.S.? - YES!

(The chart above is from the Economic Policy Institute.)

Could the United States eliminate poverty within its borders? It's an interesting question. Sadly, too many Americans don't think we could. They will quote the saying that "the poor will always be with us". They think it would take a prohibitive tax rate to eliminate poverty -- a rate that the working and middle class could not afford to pay. They believe the best we could do is for the government to provide a subsistence level for the poor.

I believe they are wrong. The United States is the richest country on Earth, and the richest country that has ever existed in the world. We have the economic means to eliminate poverty, and we could do it without a lot of new government spending. All we need is the moral and political will to do so.

How could it be done? Well, look at the chart above. It shows that 65% of the poor have the ability to work, while 35% do not (children, students, the disabled, seniors). Of that 65%, 63% are already working. They just aren't paid enough to lift them out of poverty. That in itself is shameful. No one willing to work hard should have to live in poverty.

We could lift the working poor out of poverty by simply raising the minimum wage to a livable level (like $15 an hour), and index it to the level of inflation so they don't slip back into poverty. That wouldn't cost anything in new taxes or government spending. In fact, it would save money, because taxpayers would no longer have to subsidize these people through government assistance.

The truth is that far too many corporations and businesses don't adequately pay their workers. They rely on taxpayers to pay what they should be paying themselves. But taxpayers shouldn't be subsidizing the payroll of private companies.

Then we could address the 37% who could work, but aren't. Republicans would have you believe these people don't want to work -- that they are lazy and want to live off the government. That is bullshit. No one wants the stigma of having to live off government assistance -- and believe me, our politicians have made sure those receiving assistance are stigmatized as much as possible. These people would love to have a job paying them a livable wage.

This should be dealt with through effective job creation and job training. This would require some government spending, but would actually or nearly pay for itself by also getting these people off of the government dole.

That leaves only the 35% who are unable to work. Seniors living in poverty could be lifted out of poverty by expanding Social Security benefits. This would not require higher income taxes, since Social Security is paid for through payroll taxes (FICA tax). That payroll tax revenue could be increased by simply raising the cap on income subject to that tax (or eliminating it). This would require the rich and upper middle class to pay more, but would not affect the huge majority of workers at all.

That leaves us with the disabled that can't work and children and students. Those will always be with us, but there is no reason they should have to live in poverty. The children who have parents will be lifted out of poverty by requiring a living wage for their parents. The rest could be lifted out of poverty through more government assistance (using the funds saved by the measures above). And if it required a little more money, we have a bloated military budget that could be trimmed without affecting national defense.

We have the money to eliminate poverty in this country, and it could be done without massive new spending by the government. All we need is the will to do it.

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