A look at government spending

[toh6wy]

My mom teaches a course on the working poor, and she came up with a set of statistics that I found interesting.

According to the United States Department of Health and Human Services, the Compassion Capital Fund (CCF), one of the government’s major ways it helps those in financial need, gave out about $43 million to various organizations in 2004. On the CIA’s World Factbook entry on the U.S., there is listed the U.S. population in 2005, the percent growth in population from 2004, and the percentage of people below the poverty line in 2004. With a little math, therefore, the number of people below the poverty line in 2004 comes out to be about 35 million. Even if all of the money from the CCF was used just for the officially poor, it would still mean that there was about $1.22 per person spent in one year.

Meanwhile, there is an organization called Project Billboard, which, using the amount of money already spent on the Iraq war by 2004 and the amount of time past since the beginning of the war, has calculated that, on average, $7.4 million per hour was spent on it in 2004. Put another way, the entire amount given out as part of the CCF for 2004 would have been spent in about 4.7 hours for the Iraq war.

In my opinion, this is fairly sickening. My question is, how is this justified? I’m curious to see your responses.

(Admittedly, these figures are two years out of date, but I couldn’t find data from this year or last year for all of these things, and I wanted it to be consistent. Besides, I doubt any of them have changed significantly.)

[edit]FCC... ahaha...[/edit]

 

[ainwood]

The 'poverty line' is a meaningless number. It is calculated to be people who live on less than half the median wage (IIRC). Therefore, if everyone was given an extra 10,000 a year - you would still have the same amount of people living 'below the poverty line' - in fact, the only way to eradicate poverty (by this measure) is to actually enforce some form of communist regime where everyone gets paid the same (or a large proportion of people do).

That said, the money to the CCF does appear to be low - but put that in context - how much is given to other aid agencies, and more importantly, how much is spent on social welfare (which should be the prime method of redistribution, rather than via independent aid organisations).

 

[El_Machinae]

I believe that in Canada, our poverty line is determined by looking at the percentage of income that goes towards food, clothing, and shelter.

As a result, it adopted 70 per cent of income as the cutoff point: families that spent more than 70 per cent of their income on essentials would have little or no income left to spend on transportation, health, personal care, education, household operation, recreation or insurance.

There we go. Now, that number is then quantified and made into an actual number (so if I went and blew all my money on steaks, suits, and mansions - I couldn't claim to be poor)

 

[ainwood]

Well, with all due respect, that's an even sillier measure of poverty! Its measuring the surplus that people have left-over for non-essentials - its lumping people who don't have enough money for luxuries in with those that don't have enough money for essentials!

 

[El_Machinae]

I don't know what you mean. It measures how much people are 'squeaking by', and adjusting it for inflation.

If you need $900 a month just to survive, and you only make $1100, then you're 'poor'. If you make $1200, you're not poor. Seems pretty simple. If you don't make more than essentials, then you'll never prosper or grow.

It sets a minimum standard. As well, if the entire country prospered (everyone was making 2x what they need to survive, for example), then no one would be below the poverty line.

It gives us a goal to measure against.

I guess we could use a separate 'destitute line' as well, but the numbers of those people is pretty durned low.

 

[ainwood]

I don't know what you mean. It measures how much people are 'squeaking by', and adjusting it for inflation.

If you need $900 a month just to survive, and you only make $1100, then you're 'poor'. If you make $1200, you're not poor. Seems pretty simple.

So if you need $700 a month to live on, someone earning $1000 a month is 'poor' and someone earning $1001 is not? Irrespective of their circumstances (Where they live, how far they have to commute to work?)

If earn 10,000 a month, yet you live in a a house that costs you $8,000 a month you are 'poor', yet if earn $1,000 a month, yet live in a house that only costs $400 a month to rent, you aren't?

 

[Winner]

Well, the winter here lasts longer than 120 days now. What's worse, it is told that the freezing conditions may last for another month. Now tell me about the climate change...

 

[El_Machinae]

Ah Ainwood, I see your issue.

Suppose that, on average in a city setting, a person 'needs' $800 (minimum) to get food, shelter, and clothing. That is what they set at the baseline. If a person is foolish and takes a $1000 mortgage (and consumes most of his budget), then he is not counted as 'poor' but as 'stupid'. The system cannot save stupid people. However, if a person is able to survive off of $300 (because of taking advantage of charities or luck), they are still considered poor (but only for keeping things simple, in truth they are not as poor as others)

It's not an individual measure, it's considered a standard measure (that moves with inflation). As well, the figure does not factor in commuting costs, which is why there is some leeway. The system figures that if more than 70% is being spent on just surviving, then the person cannot really afford to commute either.

I don't mind it (though I'm not explaining it well). It gives us something to shoot for, because it sets a minimum baseline (that moves with inflation) that were trying to get people out of. Edit: as well, it is possible to get everyone above the poverty line, which is not possible with some systems of poverty measurement.

 

[toh6wy]

The 'poverty line' is a meaningless number. It is calculated to be people who live on less than half the median wage (IIRC). Therefore, if everyone was given an extra 10,000 a year - you would still have the same amount of people living 'below the poverty line' - in fact, the only way to eradicate poverty (by this measure) is to actually enforce some form of communist regime where everyone gets paid the same (or a large proportion of people do).

That said, the money to the CCF does appear to be low - but put that in context - how much is given to other aid agencies, and more importantly, how much is spent on social welfare (which should be the prime method of redistribution, rather than via independent aid organisations).

That's not really relevant. I (my mom, really) was just using people below the poverty line to make a point - as in, even if all of the CCF money were distributed among the poorest of the poor, they would see little more than a dollar each. If it was distributed among people who are unofficially poor as well, it'd be even less per person.

As for your second point - even if I were to put it in context, I imagine it would still pale in comparison to $7.4 million per hour. And so my point stands.

Well, the winter here lasts longer than 120 days now. What's worse, it is told that the freezing conditions may last for another month. Now tell me about the climate change...

At first I thought you posted in the wrong thread, but now I'm not sure. Is this a metaphor for something? If it is, could you please explain it?

 

[ainwood]

As for your second point - even if I were to put it in context, I imagine it would still pale in comparison to $7.4 million per hour. And so my point stands.

Well, you should check that out.

NZs total government spending is about NZ 4.8 million an hour - and we only have 4 million people to cater for.

 

[general_kill]

The 'poverty line' is a meaningless number. It is calculated to be people who live on less than half the median wage (IIRC). Therefore, if everyone was given an extra 10,000 a year - you would still have the same amount of people living 'below the poverty line' - in fact, the only way to eradicate poverty (by this measure) is to actually enforce some form of communist regime where everyone gets paid the same (or a large proportion of people do).

That said, the money to the CCF does appear to be low - but put that in context - how much is given to other aid agencies, and more importantly, how much is spent on social welfare (which should be the prime method of redistribution, rather than via independent aid organisations).

Hmm, never knew that.

 

[Desmond Hawkins]

This "CCF" doesn't represent all of the money given out to the poor throughout the entire nation. The Iraq War is meaningless and expensive, but perhaps your argument would be better supported if you found a statistic showing the total redistribution of wealth to the poor.

 

[The Yankee]

The 'poverty line' is a meaningless number. It is calculated to be people who live on less than half the median wage (IIRC). Therefore, if everyone was given an extra 10,000 a year - you would still have the same amount of people living 'below the poverty line' - in fact, the only way to eradicate poverty (by this measure) is to actually enforce some form of communist regime where everyone gets paid the same (or a large proportion of people do).

That said, the money to the CCF does appear to be low - but put that in context - how much is given to other aid agencies, and more importantly, how much is spent on social welfare (which should be the prime method of redistribution, rather than via independent aid organisations).

I'm not sure it's such a meaningless number. You're correct in saying that if everyone got an extra $10,000 a year, the number would remain constant. But that doesn't take into account that pretty much everything else is going to cost more and soak up that extra ten grand per year.

At least the poverty line does give some indication of the wealth distribution of society, if nothing else.