It is no coincidence that the same 47 million who pay no federal income taxes are the same group who need assistance with food and other necessities of life: They are hungry and they have very little income. I don’t know their average income, but this much I know: It is less than $15,292 per year. That is the amount arrived at by using data from the Tax Foundation.   They reported that the bottom 50 percent of American tax filers in 2009 (69 million) had an average adjusted gross income of $15,292. Since 47 million represents the bottom 68 percent of the bottom one-half, and assuming a linear distribution, we can arrive at a good estimate that their average annual income is near $10,416.

 

Yes, but…aren’t they all just a bunch of free loaders, takers who won’t work and want all the rest of us to support them? Those are all assertions, and I deal with facts. Anyone can make an assertion; facts are harder to come by, and they require a lot more mental effort in analyzing, synthesizing, and evaluating them.

 

Here are a few facts that argue against the assertions in the preceding paragraph.   2009 was a year of deep recession. Low paid workers are among the first to go in a recession.  Very few replacement jobs are available in economic downturns.  Even highly educated and highly skilled workers have a difficult time in finding work during a recession.   Food stamps are a safety net for everyone, not just the very poor. It follows that those who are poor, and unemployed during a recession, need assistance with food and other necessities of life. That conclusion is valid here and in any country around the world.

 

Even during normal economic times when jobs are more plentiful, the facts argue against those at or near the bottom of the income and wealth curves as free loaders and takers. First, the most important factors behind future economic success are the tax and inheritance laws. Inheritances account for at least 90 percent of all wealth. (Wealth is equal to assets minus debts, the best measure of economic success). The top 20 percent hold $53 trillion in wealth; the next 30 percent hold $8 trillion; and the bottom 50 percent hold zero wealth. Incomes are distributed in nearly equal percentages.  

 

Here is why a person in the lower half of either the income or the wealth distribution curve is swimming upstream against a powerful current. Since 1970, both incomes and wealth have been moving away from those in the bottom 80 percent, and to those in the top 20 percent.  There are no reversal mechanisms in place to alter those trends. Yes, a few athletes and entertainers are always welcome to move up the income and wealth curves, but very few others. It is a fact that, in America, the rich are getting richer, while the poor are getting poorer. Those are not unverifiable assertions. They are all facts. There are many other associated or correlated facts: Poverty is the home of hunger, illiteracy, drug usage, mental health issues, teen pregnancies, high obesity rates, high crime rates, high imprisonment rates, lower life expectancies, and social immobility. 

 

In fact…hold onto your seats for this…the United States is number #1 in the entire industrialized world in every one of the above negative categories associated with poverty except life expectancies!  

 

All the above data and conclusions come from a variety of reliable sources and from highly reputable scientific studies, far too numerous to list here.   I have reviewed many of them, and I have conducted much research into these matters personally. They are all on solid scientific grounds.

 

We’ve identified the sources of poverty, as well as the growing trend toward more of it. But is it possible to grow our way out of these vast disparities in wealth and income (and all the problems associated with poverty)?  There are two answers: A short-term answer, and a long-term answer. In the short term (next 10 to 20 years) the answer is “no.” That is because real economic growth (net of inflation) is growing at nearly the same rate as population growth.   So even as we produce more products and wealth, no more of it will flow to those in the bottom 50 percent. Put another way, zero raised to any power is still zero. In still other terms, you cannot produce or grow wealth where there is too little income. It must all be spent on survival needs.

 

In the long term (about 50 years), our present economic course is unsustainable. In that same time period, the wealth held by the top 20 percent will grow and compound to $1.6 quadrillion if present trends hold. That’s $1,600 trillion. Before that happens, the course of human history suggests major turmoil of unprecedented proportions will take place. I am not a predictor of human behavior, but I would not blink at all if others predicted the bloodiest civil war in human history was inevitable in less than 50 years.   The consequences could be that serious without a few changes in how and to whom we allocate jobs, incomes, wealth, and opportunities.

 

There are those who like to divide people into groups of “makers” and “takers,” or “successful” and those who want “free stuff.”   Perhaps the only thing the poor really want is a job that pays a livable wage and the opportunity to move up.  The longer term answer to poverty reduction is to provide educational opportunities for all, while understanding that there are just as many bright and talented kids in the bottom halves of income and wealth distributions curves as there are in the top halves.