----- Original Message ----- From: "John D. Giorgis" <[EMAIL PROTECTED]> To: "Brin-L" <[EMAIL PROTECTED]> Sent: Monday, January 21, 2002 4:20 PM Subject: Re: Presidents RE: Corruption in a Democracy
> At 05:14 PM 1/19/02 -0600 Dan Minette wrote: > >Lets look at the average income of the bottom 40%. This clearly includes > >not just the unemployed, but a lot of working people too. This income > >gained 6% from 70 to 80, and the same from 80 to 90. But, in both cases, > >the following recession wiped out half of the gain. So, the overall gain > >from 70 to 93 was only 7%. > > > >But, if you look at the top 5%, a very interesting thing occurred. The top > >5% gained 13% from '70 to '80. It then gained another 4.5% from '80 to '83. > >While the bottom 40% lost half of their gains, the top 5% kept on gaining > >income at the same rate. Indeed, the overall gain for the top 5% was 54% > >from 80 to 93. (For completeness, the income of the middle 20% rose 4%, the > >income of the 4th quintile rose 10% and the income of the top quintile rose > >30% during that time.) > > > >Given all this, how in the world would you expect poverty to decease over > >that period? > > Ummm...... because we spent billions upon billions of dollars on it? > We are not really spending all that much on the general fighting of poverty. At http://www.cbo.gov/showdoc.cfm?index=1944&sequence=0&from=7#table1 I obtained numbers for the programs that involve paying for daily living expenses of poor families. They are: Food Stamps 19 Family Support 25 Child Nutrition 10 Total 54 billion Considering the fact that there are 8 million families in poverty, it is hard to see how spending on this level would raise them out of poverty. I know that I did not include the biggest ticket item, Medicaid, in this. This is certainly a critical aid, and I believe a number of people would die without it (as long as hospitals were not simply forced to absorb the costs and add it to the cost of care for everyone else). But, I don't think that one should be surprised that it does not eliminate poverty. > > >It ignores the fact that the boom of the '90s was > >responsible for the decrease in poverty. > > Yeah, looks to me like economic growth is good for the poor, whereas > economic recessions are positively devastating for the poor. They are. However, one sees that the poor are different from the rich in that a downturn overcomes virtually all of the advantage of a sustained period of economic growth for the poor, while actually improving the income of the wealthy. Let us consider two periods 1980-1993, and 1982-1993. The first includes two recessions, the second includes just 1. The second can be seen as a trough to trough. >From 1980 to 1993 and from 1982 to 1993, the following change in income was observed: 80-93 82-93 bottom 20% -2.3% 1.4% 2nd 20% 1.9% 4.3% 3rd 20% 3.8% 6.0% 4th 20% 9.6% 10.8% top 20% 30.0% 27.9% top 5% 54.2% 50.7% One can see that the top dogs really prospered under Reagan/Bush, and the people at the bottom didn't. For the bottom folks, the two recessions more than wiped out the gains made in the expansion in between. Including the big recession of 80-82 only increased the income gain of the top dogs. If you were to count on the 82-93 improvement for a cycle to virtually eliminate poverty, it would take well over 100 years. Personally, I think this is a reflection of the long term lack of demand for most workers...but I'll debate that separately if folks are interested. Finally, IIRC, this doesn't include capital gains. If so, the top folks have even a greater share of income than is depicted by the figures I use. Dan M.
