The Face Of "Deep Poverty" In America

The famous line, attributed to Mark Twain, is, "There are three kinds of lies: lies, damned lies, and statistics."  Readers here know that I have been a frequent severe critic of the federal government's statistics on the subject of poverty.  At the time of their creation, these statistics may have borne some relationship to real poverty as you think of it -- physical deprivation, including lack of enough to eat or adequate clothing -- but any such relationship that may have once existed has long since gone away.  Today the "poverty" statistics fairly fit Twain's description -- they are far worse than mere "damned lies."  

The reason is that all kinds of people whom you would never think of as poor, and who are not poor in any real sense or suffering from any sort of physical deprivation, are lumped into the statistics.  In calculating the "poverty" rate, Census counts only "cash income" in the current year, a statistical artifact that arbitrarily excludes substantial resources that people have available to them to live comfortably.  Large categories of obviously non-poor people counted in the "poverty" statistics include retirees living on ample savings or home equity, students living on scholarships and fellowships (do you know that affluent Ithaca, New York, has a reported "poverty" rate exceeding 40%?), twenty-somethings living off resources of affluent families, and otherwise successful businesspeople having a bad year -- and that's before we even get to the vast population of government dependents living on government handouts, nearly all of which are also systematically excluded from the artificial definition of "cash income."  (This does not mean that there are no bona fide poor people included in the poverty statistics, but only that the reported numbers are wildly overstated, and we are given no meaningful information on the real state of poverty in the country.)

But of course the fake Census statistics are useful for advocates of more government spending and programs, who can use the inflated numbers to tug on the heartstrings of the uninformed.  For example, here we have Clyde Haberman, writing in the New York Times on May 1 and using the fake government poverty statistics to advocate for more government spending to alleviate the suffering of the poor:

Nationwide, the Census Bureau counts 46.7 million Americans as living in poverty, which for a family of three (typically a mother and two children) means annual earnings of less than $20,160. About 20 million people live in deep poverty, with earnings below $10,000 a year for a family of three.

Twenty million in "deep poverty" -- that sounds bad, a lot worse than mere "poverty."  Are your heartstrings tugged?  How bad must the sufferings of these people be?

Well, consider one of them:  Donald Trump!  


His "cash income" in 1995 is now reported to have been a negative $912 million.  Talk about "deep poverty"!  It's way less than $10,000 -- and he had a family of five to support at the time.  He could well have been the "poorest" person in the whole United States in 1995 -- at least if you define "poor" the way the geniuses at our Census Bureau define "poor."  And the suggestion is that Trump then used the negative $912 million to zero out his "cash income" for up to eighteen years after 1995.  He was likely in "deep poverty" all the way up to 2013!  Is it any wonder that our "deep poverty" rate is so high?  

You are probably wondering, could it really be possible that the U.S. Census Bureau, in calculating the "poverty rate," could count a businessman like Trump in "poverty" for almost two decades just because he had a bad year in which he took a write-off that zeroed out his income and then some?  And the answer is, absolutely he would have been counted in "poverty" in 1995 and all the way until the negative was exhausted.  It's just the way the "cash income" numbers shake out.  Trump fell in one of the many categories of non-poor that are used to gin up our fake statistics.  (Note that it is unlikely that Trump was personally surveyed by the Census.  But the Census sample is plenty big enough that it will inevitably include numerous members of Trump's "businesspeople with write-offs" category.)

But, you say, Trump is just a fluke, and flukes like that can't really skew the numbers much.  Not at all.  Lots of businesses have periodic losing years, even though overall they are successful.  How many instances are there in any given year of businesspeople with a negative year who get counted in poverty?  And the answer is, you will never find that out from the Census statistics or any other information that they put out.  Nor will you find out how many said to be in "poverty" are actually students from affluent families, or retirees living comfortably on savings or home equity loans or proceeds from sale of a house, or people taking a year off from successful careers, and so forth.  Sorry, but those are state secrets.  If we let that information out, how would people like Clyde Haberman be able to tug at your heartstrings with cries of tens of millions in "deep poverty"?