Recession and Poverty

March 17th, 2008

The National Bureau of Economic Research (NBER) determines when the United States is in a recession. However, the group usually does not make the determination until 6 to 18 months after we enter a recession. Generally, economists define a recession as two consecutive quarters of economic contraction. Using that definition, a recession would not become an official recession until about 6 months into it.

The president of the NBER, Martin Feldstein, has said that we are in a recession, but that is not an official NBER declaration.

Also, three out of four Americans now think that the United States economy is in a recession, according to a CNN poll.

I worry that a recession will worsen the poverty problem in the United States. After having observed the international instability caused by the recent credit crisis, I worry that a United States economic recession would worsen poverty internationally.

A recession will also greatly hinder the ability of anti-poverty organization to find investments, loans and other funding.

At the risk of sounding cliché, I recommend we hope for the best but prepare for the worst.

Whatever happens, I hope we all learn that we need to find a more stable economic system. The boom/bust cycle makes people too complacent during booms, and too weak and fearful to change anything during busts. The very existence of poverty demonstrates a massive flaw in our economic system. We need to create a more stable and meritocratic economy without poverty and preferably without so much speculation and usury.

I encourage everyone interested in United States economics to research the Federal Reserve. As Henry Ford said, “It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

If you do research the Federal Reserve, I recommend you try to figure out its actual interests, and do not assume it has the interests of the typical citizen in mind. Also, research the effects of inflationary monetary policies. Remember, people in power predictably tend to do what benefits themselves regardless of whether it hurts or helps people like you and I.

Poverty and the Expensive War on Drugs

March 15th, 2008

In his song Changes, Tupac Shakur said, “Instead of a war on poverty, they got a war on drugs so the police can bother me.” That powerful line has always stuck with me.

I believe we, the people of in society, can end poverty whenever we decide to end it. However, we generally rely on a government that underfunds poverty alleviation programs. Instead of putting it towards ending poverty, we let the government put our tax-dollars towards waging a needless war on drugs.

Estimates generally say that the “war on drugs” costs the United States government $50 billion per year. Worse yet, prohibition hands the lucrative drug market over to violent criminals, thus funding and increasing violent crime, which has a lot of unmeasured socioeconomic costs.

Just like with the alcohol prohibition, drug prohibition does not seem to decrease usage, but instead it costs a lot of money while increasing violent crime and corruption. Drugs may cause problems in society on their own, but I firmly believe drug prohibition makes matters much worse.

I would much prefer if drugs were legalized and the money spent on the “war on drugs” was put towards poverty alleviation. Better yet, the money could be given back to the tax-payers in the form of working-class tax-cuts, which I believe would also help reduce poverty.

In addition to saving the money spent on the needlessly devastating war on drugs, the government could tax drugs. In theory, I do not like any taxes, but I would much prefer taxing drug usage than income paid for labor. And I would much prefer taxing drugs than criminalizing them. Taxing drugs could bring in hundreds of billions of dollars in tax revenue. Again, the government could put that money towards poverty alleviation programs or income tax cuts.

Instead of wasting so much money throwing non-violent pot smokers in jail, imagine if we put all that money and extra tax-dollars into poverty alleviation programs. For example, imagine how much education that funding could provide to poor kids.

What do you think about the relationship between poverty and the war on drugs? Post your comments in this thread at the World Hunger and Poverty Forums.

Localized Poverty Tour

March 13th, 2008

I often stress the importance of using grassroots organizations to alleviate poverty on a local level. Local organizations understand the local community and can meet the local community’s specific needs.

Unfortunately, most communities have become too passive about poverty. Almost all people realize they would rather live in a world without poverty, but they do not make local poverty alleviation a priority in their personal lives. Many people’s views on poverty amount only to passive indignation.

We need more than passive indignation to end poverty. We need to actively work to end poverty.

For organizations to work on fighting poverty on a larger scale, I suggest a poverty tour. By this, I mean to suggest that an organization focus on one local community at a time. One at a time, the organization could go to single towns or neighborhoods, and stay for a certain period of time. During that time, the organization could research the local situation and help spark a customized, local movement to end poverty in the specific place.

If you know about any organizations already doing some sort of poverty tour, then post about them in my World Hunger and Poverty Forums. Otherwise, keep in touch if the idea interests you. In the future, I will try to help organize such a tour.

Fight Poverty with Student Loans for Young Kids

March 13th, 2008

On this blog, I often stress the importance of using education in efforts to alleviate poverty. Education puts people on a healthy path, giving them self-esteem and self-respect. Quality education gives people the skills and credentials to support themselves and their families.

Today, I want to point out that we need to make sure children get a quality education from a very young age. Poor children usually have already fallen behind before they even get into kindergarten. After that, poor children go to the worst schools in the unhealthiest environments. I suggest that anti-poverty organizations find ways to get young children from poor neighborhoods into quality schools.

If the children get a quality education in a healthy environment, they will have a great chance of not only escaping poverty but also of achieving more success in their life. Later in life, they will make more than enough money to pay back any student loans. In addition to student loans, the kids can get scholarships which they will not even have to pay back.

I think it may greatly help to enable poor kids to go to boarding schools in non-poor neighborhoods. That will not only give them a quality education but it will also get them away from the hindrances and ill-effects of poor neighborhoods, which have large amounts of drugs, violence, hopelessness, unhealthy influences and bad role models.

Getting kids out of poor neighborhoods and into quality private schools could break the poverty cycle.

If you know of any organizations that already provide scholarships to very young children from poor neighborhoods, please post about them in my World Hunger and Poverty Forums. I would love to help spread the word about such organizations. Please also use the forums to post comments about this blog post.

Food and Energy Costs Worsen Poverty Problem

March 11th, 2008

UN officials named the biggest challenges to meeting poverty reduction goals as the rising prices of food and energy as well as global warming.

The demand for oil will continue to increase as countries all over the world continue to industrialize and develop. Of course, we continue to use up more and more of our limited supply of oil. As supply goes down and demand goes up, the costs of anything involving the use of energy increases, namely food and imports.

Poor regions suffer as poorer people can no longer afford as much goods and services as prices rise. Also, charity becomes hindered since charitable funds buy less and less.

Even in the United States and the developed world, rising prices will obviously throw even more people into poverty and worsen the conditions of people already in poverty.

Of course, even with rising prices, the world will continue to have enough resources to provide food, clean water, shelter, healthcare and education to everyone. But we need to change our society structure so that people have more access to the world’s abundant natural resources.

Additionally, we can not leave people dependent on charity or welfare. We need to make as many people self-sufficient as possible, as many families self-sufficient as possible, and all local communities self-sufficient.

As Lao Tzu famously pointed out, it is better to teach a man to fish than to give him a fish. Unfortunately, charitable organizations can barely afford to buy the proverbial fish for the hungry, let alone afford to teach them to fish.

Before matters get even worse, we need to invest a lot more in helping people help themselves. It will cost a lot more upfront, but it will cost us less in the long run, and it will save much more people overall. Namely, we need to invest heavily in education to give people the skills to support themselves and their families. Also, we need to focus on finding ways to empower local economies to make them independent of the need for charity. In fact, large amounts of charitable funds or food have often undermined local economies by putting local businesses out of business and leaving the economy and its people worse off.

What do you think? How do you suggest anti-poverty organizations help people and economies become more self-sufficient? Post your answers in this thread at the World Hunger and Poverty Forums.

UN Meeting on Poverty Scheduled for September

March 10th, 2008

UN chief Ban Ki-moon has announced that he plans to co-host a UN meeting on poverty with the president of the (UN) General Assembly.

The meeting will take place on September 25th, during the general debate of the UN General Assembly which runs from September 23 to October 3.

September seems like far off, but hopefully it will give them time to plan the meeting and make it more effective.

The United Nations adopted eight goals “Millennium Development Goals” in 2000. One goal included halving the amount of people in extreme poverty and halving the number of people who suffer from world hunger by 2015. At the current rate, the world will not achieve the goals.

The world has enough resources to provide food, clothing, clean water, healthcare, and education for everyone in the world. I hope the people of the world start making it a priority to end poverty. We can do it. I hope we do.

Imagine No Lending

March 9th, 2008

In a recent post at the Philosophy Forums, I speculated that a society could avoid problems such as the recent credit crisis by not coercively enforcing contracts. In other words, lending would not exist in a formal way in that borrowers would not be forced to pay back what they borrow. I believe it would put the onus on the lenders to only lend responsibility. Additionally, it would mostly eliminate credit-based economics which would help stop usury and thus help alleviate what some people call wage slavery. Of course, that is mostly a philosophical proposition; in practice, it would take a long time to safely transition from a credit-based economy to an economy without enforced contracts. Anyway, you can join the discussion at the following URL:

http://onlinephilosophyclub.com/forums/viewtopic.php?t=380

Basically, I believe that an economy without as much usury would have less poverty. In such an economy, laborers would get to keep the full fruits of their labor rather than have to pay it to rich, unproductive usurers. As a result, such an economy would have much higher wages and laborers would not need to borrow money. That would lead to much less poverty.

Of course, we could not implement it abruptly in our current economic system. Currently, most working-class people depend on credit to survive. It would help them to change that, but we need to change it carefully.

Unfair Taxes and Poverty

March 8th, 2008

Forbes named Warren Buffett as the richest person in the world as of March 5, 2008. Personally, I admire Warren Buffet for a variety of reasons. Namely, he behaves in a down-to-earth way, and he has earned the title of philanthropist. Last year, he pointed out that he pays a smaller percentage in taxes than his secretary. He also has pointed out that he believes the CEOs of all the top companies pay less in taxes than their secretaries.

Mainly, the rich people do it because they get to just pay a smaller “capital gains tax” rather than the regular income tax that most workers pay.

Ironically, workers are not really making an income if you ask me. Out of desperation, the typical working person has to sell his or her labor at extremely low prices. The typical working person is not profiting, but just desperately trading his or her labor away for whatever low amount he or she can get from the powers that be.

The lazy usurers who actually profit pay a smaller tax rate!

I think many working-class people believe taxes can help them regain some political standing. But I believe the rich can always manipulate the government to use it in their favor. As a result, in theory, I oppose taxation.

I recommend that the working-class demand tax relief.

Additionally, for people who feel some taxes remain necessary, I suggest taxing property ownership rather than income paid for labor. Let me explain why.

Unfair economies mainly oppress the working-class by letting the upper-class monopolize control over the natural resources. By claiming to own more than their fair share of the natural resources, the upper-class can make money by making the working-class pay them for permission to use the natural resources.

Taxing property ownership instead of income paid for labor would possibly help hinder the monopolization of natural resources by the upper-class. It would work most effectively if the tax only existed for people who “owned” an excessive amount of property, but not those who only “own” less than their fair share. For example, let’s not let the government tax the average working person who may purchase a cramped house on a small plot of land with a mortgage.

In theory, I do not support any form of taxation because I do not trust government with that power. However, as a matter of practical reform, I much prefer taxing property ownership and usury than taxing income paid for labor.

Remember, I think we could end poverty by giving all people fair access to natural resources. Poverty exists, in part, because working class people have to pay just to use natural resources to get the fruits of their labor. And that money flows to an unproductive ruling class. In other words, the so-called “owners” of the land, machines, oil, and other natural resources demand a huge cut from the workers’ production. And that is, I believe, the main reason why wages are so low. (Lack of education is the next reason, but working-class families could afford more education if they had higher wages.)

Whatever we do, we need to alleviate the unfair economic burden put on the working-class. As I have said before, that unfair economic burden causes poverty in the so-called first-world.

What do you think? Do you agree that it would help to tax property ownership and usury instead of income paid for labor? Post your responses to this blog post and those questions in this thread at the World Hunger and Poverty Forums.

Widespread Poverty in the U.S. Does Exist

March 7th, 2008

I have noticed some people have a tendency to try to underestimate poverty in the United States. These people try to make United States poverty out as mostly an illusion. They seem to most often think that “liberals” try to play with the numbers to make it seem like many people live in poverty when the people actually live comfortable lives.

The myth that widespread poverty does not really exist in the United States seems utterly absurd to me. The people perpetuating the myth could easily see the falsehood of it by simply driving down an inner-city street. But I suppose many people would choose not to drive around in those dangerously poor neighborhoods. On the same token, I wonder if they have ever watched any of the many movies displaying United States poverty such as Boyz N the Hood–one of my personal favorites.

You do not need the numbers and statistics to see the widespread poverty in the United States.

I understand the desire of people to point out the contrast between the United States and “third world” communities so desolate that the majority of people live in huts with dirt floors, where watching others literally starve to death becomes a daily routine. I can see that the hungry children in the United States have a better situation than those who starve to death.

However, in some ways, I find United States poverty even more disgusting than “third world” poverty. Something makes me even sicker at the thought of hungry kids suffering right down the road from a grocery store overstocked with food. The social juxtaposition of overabundance and poverty in the United States–the most socioeconomically unequal country in the world–in some ways bothers me more than the harsher devastation of people who live in nations with so little. In some ways, I get more disturbed by poor people suffering next to rich people than starving people suffering next to other starving people.

In any case, poverty exists throughout the world. It exists in the United States. It exists in an even more widespread way in nations plagued by devastation and international economic exploitation.

Fortunately, the world has enough food to feed everyone. We, the people of the world, have the resources to provide food, clothes, shelter, clean water, education, and healthcare to everyone no matter where in the world they live. We can end poverty anytime we wish.

Unfortunately, we have chosen not to end poverty so far. As of now, we have continued to choose to let children suffer in poverty and, in the worst parts of the world, die from starvation. Even in the United States and the developed world, we still let millions of children grow up hungry in poor neighborhoods, where they go to substandard schools, surrounded by violence, hopelessness, and bad role models. As a result, many of those children will remain in poverty their entire lives, which will continue the poverty cycle for even more generations.

Let’s not let ourselves shrug off poverty in the United States or in the developed world. Let’s work to end poverty everywhere, namely by breaking the poverty cycle.

What do you think? Have you ever heard people try to claim poverty in the United States does not exist? Tell us what you think about it in this thread at the World Hunger and Poverty Forums.

Charles Loring Brace’s Work in Child Poverty

March 6th, 2008

I just read a very interesting article by Howard Husock about Charles Loring Brace’s work to help poor children in New York City. I had not heard much about Charles Loring Brace beforehand, but the article explains his life and the work he did in the 19th Century.

Most notably, Brace helped alleviate child poverty by starting a massive foster-care program which consisted of moving poor kids from the streets of New York City into midwestern farm families. He sent over 50,000 orphans and street children out west to live under the “healthy influence of family life.” He also founded the Children’s Aid Society. I found a PBS documentary about his work: American Experience - The Orphan Trains

He also created “Lodging Houses” for newsboys and other street-kids. These houses took in over 170,000 boys.

Brace focused on teaching the children to take care of themselves as much as possible. He worked to get them into school. He focused on instilling values in the children that would help them make smart decisions throughout their life.

After reading about Brace, I admire him because he did not spend too much effort in advocacy but instead focused on direct action. Nowadays, many anti-poverty groups focus their efforts heavily on advocating policy change in government. But Brice focused more on actually helping the children.