Victory in the War Against Poverty

There is no poverty per se in America

GEORGE NOGA
FEB 18, 2024

According to official US Census Bureau statistics compiled in 2023 (based on 2022 data), the poverty rate¹ is 12.4% resulting in 38 million Americans in poverty. This means the US has one of the highest poverty rates and child poverty rates of any developed country, with more people living in poverty than Indonesia and a higher poverty rate than Europe. This simply doesn’t pass the smell test.

As demonstrated herein, there is virtually no poverty in America. The true poverty rate is between 2.5% and 3.5% and consists almost entirely of people with severe cognitive challenges. The real problem is not poverty per se, but social dysfunction resulting from low IQ which then leads to poverty – more about this infra.

Following are some of the most egregious flaws in the official measure of poverty.

• Excludes income from 88 government programs for low-income Americans
• Fails to include refundable tax credits including the EITC
• Debit cards loaded with food stamp benefits not counted as income
• Based on spending² rather than income, only 2.5% are below the poverty line
• No income from the underground (cash) economy is included
• 42% of poor households own homes with an average of 3 bedrooms, 1.5 bathrooms, a garage and a patio or deck; 80% have air conditioning³
• Poverty is defined in relative terms; it rises along with median income
• 70% of the those below the poverty line report they suffer no material hardships and can meet all their essential needs for food, shelter, clothing and health care

The True Poverty Rate

As reported supra, when based on spending, the poverty rate falls to 2.5%. A BLS⁴ study based on spending (excluding only taxes) found that the poorest quintile of Americans spends only about $1,200 per year less than the second lowest quintile and only $3,000 less than the middle quintile. The richest quintile spends only double that of the poorest quintile. How’s that for equality?

Based on a 2022 population of 320 million, 2.5% is equal to 8.0 million people in poverty, while 3.5% equals 11.2 million people. The Census Bureau reports 38 million in poverty, but when we exclude the 70% who self report no hardship, we get 11.4 million or 3.6% below the poverty threshold. In yet another independent confirmation, a recent Wall Street Journal article pegged the true poverty rate at 2.5%.⁵ Based on all the prior data, the true US poverty rate is between 2.5% and 3.5%. It would approach zero percent if those with the most severe cognitive challenges were excluded.

No Poverty Per Se in America

In any normal population distribution, 2.5% have an IQ of 70 or below, i.e. they struggle to fill out a simple form. Not uncoincidentally, these are the very same people who fall below the poverty line, as low cognitive ability is associated with a myriad of social pathologies. If you looked at a Venn diagram, the two circles (those in poverty and those with low “G”, or general intelligence) would nearly completely overlap. These people deserve our compassion and assistance. We do not help them with political correctness and by ignoring the true cause of their predicament.

The conclusion is straightforward. The number of Americans in poverty is nearly precisely equal to the number with extremely low ”G”. They are one and the same. Therefore, poverty per se in America is incredibly rare and borders on non-existent. America can declare victory in its 60-year war against poverty.

The war on poverty is being waged against the wrong enemy. Public policy solutions must be redirected at the pathologies associated with low “G” and away from providing economic benefits. We need to tailor solutions focused on low ability and untreated mental illness. Poverty is a sociological, not an economic, problem.

Is America More Poverty Stricken Than Haiti?

Relative poverty is a metric used by international organizations to measure poverty; it defines poverty as less than 50% of median income. According to this convoluted statistic, a country that is uniformly and utterly destitute has less poverty than America. Where everyone is dirt poor, no one is relatively poor. According to relative poverty calculations, a much higher percentage of Americans are poor than in Haiti, Chad, Congo and Cuba. I can’t make this stuff up.

1. The Census Bureau reports two different measures of poverty. The official measure, in existence since the 1960s, is 11.5%, and the supplemental measure first published in 2011 is 12.4%.
2. The Census Bureau reports those in poverty spend two dollars for every dollar of reported income.
3. This is larger than the average home of middle income families in France, Germany and the UK.
4. Taken from a study by the BLS, or the Bureau of Labor Statistics.
5. Wall Street Journal op-ed by John Early, former Assistant Commissioner of the BLS and Phil Gramm, former Chairman of the Senate Banking Committee.

© 2024 George Noga
More Liberty – Less Government, Post Office Box 916381
Longwood, FL 32791-6381, Email: mllg@cfl.rr.com