All Of The Government's Important Economic Data Are Fraudulent -- Part II (Poverty Rate)

Of the big three government economic statistics under discussion here (GDP, poverty rate, pension and health liabilities), one of them does not have even a hint of honesty about it: the poverty rate.  It is a scam from left to right and from top to bottom.  The basic idea is that the government publishes poverty statistics stating that millions of people are living in poverty as a device to sell the voters on spending more government money to fix the problem.  Massive amounts of government money are then voted and spent.  However, poverty is defined in such a way that little or none of the additional government spending is counted in determining who is living in poverty, and therefore billions and billions of additional spending do not decrease "poverty" in the slightest.  Next time around, despite billions of additional government spending, the "poverty" rate is the same or higher, and is used yet again to sell the voters on yet more spending to cure the poverty. 

Please take note that "poverty" as defined by the government has nothing whatsoever to do with what most people think of as real poverty, namely physical deprivation.  It has nothing to do with hunger, nothing to do with poor quality housing, nothing to do with inadequate clothing.  A family living in government-defined "poverty" may well have inadequate housing or poor clothing, or could also be receiving $100,000 or more in in kind government benefits, or could even be asset millionaires taking a year's sabbatical from lucrative jobs.  The government "poverty" rate statistic simply gives no meaningful information as to how many people are living in actual poverty as the term is generally understood.  Rather, the number is just a scam designed to play on the voters' emotions to sell more ineffectual government spending, none of which will or can reduce the measured rate.

Here is all you need to know about the "poverty" rate scam.  According to a compilation by Robert Rector of the Heritage Foundation, the total amount of means-tested government (Federal, state, local) anti-poverty spending as of the latest statistics (2011) is $927 billion per year.  According to the Census Bureau, the income thresholds for living in poverty, which vary by household size, were $11,170 for a single person and $23,050 for a family of four.  Also according to the Census Bureau, there were 48.5 million people in the United States in 2011 living in "poverty."

Do you sense that there is something wrong there?  Let's do a little very simple math:  $927 billion divided by 48.5 million people is $19,113 of government anti-poverty spending for each of them.  That is nearly double the "poverty" threshold even if the "poverty" population divides itself up entirely into one person households.  If we have four person households, the anti-poverty government spending is $76,452 per household, well more than triple the $23,050 threshold set by the government itself.

By its own definitions, the government could completely eliminate poverty, with plenty to spare, by simply passing out the $927 billion in cash pro rata to the 48.5 million people.  Instead, the government is spending more than triple the amount that it would take to completely eliminate poverty, and is not making a dent.  How could this be possible?

Very simple.  The government defines "poverty" totally in terms of "cash income."  And then it passes out the benefits not as cash, but rather in kind.  Think Medicaid, food stamps, public housing, school lunches, transportation vouchers, Obamaphones -- you name it.  None of it counts.  Any actual cash grant is carefully set to come out safely below the poverty line. 

What's incredible to me is that discussion of the poverty rate data in the media continues to treat the information as if it is something meaningful, even as if it represents some actual measure of material deprivation of the people.  But today, with an average of over $76,000 per year doled out for every family of four in "poverty," it is not possible for any intelligent person to take the data seriously.  The continued publication of this data is just a scam plain and simple, specifically designed to deceive the public into supporting more spending.

And if possible, the scam is getting even worse.   The existing "poverty" rate data has been under criticism for a long time for exactly the reasons stated above.  (Rector of Heritage has been one of the leading critics.)  This has caused a certain amount of concern in the poverty profiteer community.   After all, it would only take the public about ten minutes of focus to realize that just counting the in kind benefits at say one-half the amount the government spends would instantaneously eliminate almost all measured poverty.   How to ward that off? 

The Obama administration has come up with a solution.  In November 2012 they came out with a new "supplemental" measure of poverty.  The basic idea is to make "poverty" no longer an absolute measure of well-being, but rather a relative measure, defined with respect to 33% of the median level of income.  And beyond that, the new definition is completely incomprehensible.  The obvious idea here is again to maintain a measure that can't be reduced no matter how much spending on the poor there is, and no matter how much the well-being of the low income population improves in absolute terms.  Or to put it another way, the idea is to deceive the public into believing that poverty is not decreasing in order is to protect the poverty bureaucracy from any attempts to shrink its level of spending.

Here is an article from the Daily Caller on November 16, 2012 by Mickey Kaus, titled MSM falls for "New coke" poverty con.  At least Kaus realizes that it is a con.  Of the many who wrote about it, almost all the rest completely fell for the scam.  Pitiful.