Fun With Really Big Numbers: We Can Totally Afford to End Extreme Poverty in the United States

Today I was listening to Mike Pesca on Slate's The Gist podcast, and he had an interesting riff on Michael Bloomberg. Apparently Bloomberg recently received a prize for a million dollars and was kind enough to give it back to fund ten more prizes for $100,000 a piece for other do-gooders. Nice, right? But here's what Pesca figured out: For Michael Bloomberg's, one million dollars is .003058% of his wealth. Pesca points out that, for a millionaire, a prize of equivalent size would be $30.58. I did a rough calculation to figure out what this equivalent prize would be to me. Michael Bloomberg getting one million dollars is roughly like me getting $1.38 cents added to my annual pre-tax pay. Obviously I'm not a millionaire. But this got me thinking. Specifically, it got me thinking about a point Matthew Yglesias has repeatedly made over in Slate's Moneybox column. Yglesias is persuaded, and has persuaded me, that direct cash payments to poor people are actually the most effective way to confront poverty. It turns out that if we stop condescending to poor people and blaming them for their misery, and actually trust them to make rational decisions about how to improve their lot in life, they make better ones than the people who think they are incapable.

So, just how much money could someone like Michael Bloomberg give to poor people? Here's what I've come up with. [Note: I'm no math whiz, so if I've done any of this incorrectly, please let me know.]

Let's say we only focused our poverty-fighting in the U.S. I know that's jingoistic and also inefficient since a dollar goes a lot further towards fighting poverty in a much poorer country. But it's easy to relate to our fellow citizens, and you'll see at the end why this gets really interesting.

So, there are 313.9 million people living in the United States, according to Google (which probably knows better than anyone, including the government).

Now, a billion is a huge number. It's difficult to wrap your mind around. Imagine a briefcase with a thousand dollars in it. Not too hard to picture, right? Now imagine a thousand of those spread out on a football field or a mall parking lot. Already getting hard to picture, right? Now imagine stacking 999 more briefcases on top of each of those. That's a lot of cash.

It gets easier when you think about how much that is for each of us. If you divided that cash in that parking lot up among all the people in the country, it's $3.19 for each person. That's not just every working adult. That's every baby, every geriatric great-grandma. Everybody. But it's only $3.19.

bloomberg

Big deal, right?

But what if Michael Bloomberg decided to spend only half his wealth by giving it directly to everyone (not counting the cost of postage)? We have to leave him with some money of his own, right? So just half his wealth.

That's $60.85.

All of it?

$121.65 per American.

Still not that big a deal, right?

warren buffett

But what about Warren Buffet? Half his wealth would translate to

$103.53 per American.

$207.07 if he gave all his wealth to individual Americans.

What about Bill Gates?

$123.45 per American.

All his wealth?

$246.90.

But why would Bill Gates cut a check for $246.90 to Warren Buffet? If a million dollar prize is Michael Bloomberg's version of Ben Gorman's $1.38, Bill Gates' check to warren Buffet would just be an insult. It wouldn't be worth paying his secretary to cash it.

So, instead, what if Bill Gates gave all his wealth to only the poorest 1% of Americans?

That would be $24,690.

I can't quite figure out how poor the bottom 1% even are, because if you look at households that make less than $5000 a year, that's 3.52% of all American households. I am trying to imagine what the bottom third of those households get by on in a year, and I just can't do it.

Can you imagine what $24,690 dollars would mean to a family currently living on less than $5000 dollars a year?

And just imagine the stimulative effect on the economy. Those people wouldn't set that money aside for a rainy day. They would immediately spend it on things to improve their desperate circumstances, and that's not to say they would be frivolous with it. They'd buy a car so they could get to a job interview. They'd but a computer so they could write a resume and search for a job. They'd get some much-needed healthcare that isn't covered by Medicaid, something like braces for their kids.

All that money from that one super-poor individual, compounded by over 3 million people spending it all at once would mean a lot of people who make cars and computers and put braces on people's teeth would suddenly have more to spend. Hell, Bill Gates might see such a windfall on his Microsoft stock from all the Windows computers and Windows phones that he'd make a strong comeback that year.

But that's the problem. It would only be that year.

Only once.

But let's consider another alternative.

bar-chart-defense-spending

U.S. military spending was $683.7 billion back in 2011. Let's just use that number, even though it's gone up since then. This number does not include Homeland Security, the money we spend on securing our power stations, the amount we spend on FBI, state troopers, or local police. This is just the U.S. Armed Forces.

$683.7 billion. 683.7 of those parking lots full of a thousand stacks of a thousand cash-filled suitcases.

That’s $2178.08 per American.

Only a tenth of the US Military budget would generate $217.80 for every American.

But we have to have some military defense, right? Well, what if we only cut down our ability to defend ourselves from our enemies (Who? North Korea?) to 90% of our current capacity?

Then, what if we kicked that 10% to the poorest 1% of Americans?

Only a tenth of that would give $21,780.80 for the poorest 1%.

Every year!

Homeless Family

Now, I'm not saying we should fight poverty in this blunt way. Welfare critics believe that cash payments create a perverse incentive not to work, and I think, in this case, that would certainly happen. If someone making $1000 dollars a year gets an annual check for $21,780, who would want to get $2000? But even if you curved it to incentivize work and focused the money and children, the disabled, and a boost to Social Security (which should be means-tested and uncapped anyway, because Warren Buffet does not need his Social Security check, and he can certainly afford to pay just as high a percentage of his income into the system as you and I do), we could end extreme poverty in the U.S. (people living on less than $2 a day) and, by my estimation, double the buying power of everyone living under the federal poverty line.

Now, I know there are some people who will cry, "Socialism!" or even "Communism!" Some of these people simply don't know what those terms mean. Others do but only like their redistribution to go one way, through tax cuts to the wealthiest among us.

To the first group, I'd say, "You are currently looking at a computer screen giving you information through a system developed through government investment called the Internet. That's a form of socialism. Now use the Internet to find out what 'Socialism' and 'Communism' really mean." To the latter group, I'd say, "Suck it, plutocrats. Some of us don't believe liberty necessitates the abject misery of our fellow citizens. This wouldn't raise or lower your taxes by a single penny either way. And it doesn't even take money away from the ultra-rich. So pull your copy of The Fountainhead out of your butt."

I'm not saying we need to cut military spending by 10%. Or 5%. Or 15%. And I'm not saying anybody needs to get a check for 21 grand. Or even a briefcase with one grand in it. I'm saying that Micheal Bloomberg and Warren Buffet and Bill Gates, even with all their wealth, are incapable of ending extreme poverty in this country. They simply can't do it.

But we can. We can afford it. Easily.

Dog Poo in Motion: A Political Fable

My sister- and brother-in-law are down visiting, and, much to our cats' dismay, they've brought the dog. Tonight, when I stepped out onto the back porch to smoke my pipe, I found a medium sized, curled up dog turd off to one side. I made a point not to step on it, but otherwise ignored it while I smoked, until I realized it was moving. It turns out that a dark brown slug had decided to change course, and had curled around himself, obscuring his antennae and inadvertently masquerading as something else entirely. As I watched the slug straighten out and choose a new path, I realized there's a political moral to this story.

Large groups of people, like political parties or entire nations, are like slugs in some ways. They move slowly. They are bloated. Politically speaking, they are basically shaped like slugs, with a few people on the far right and far left but most people spread relatively evenly on a spectrum in the middle. They choose their directions slowly, ignorantly, and greedily. Once they get moving, they are basically propelled by a combination of momentum, some undetectable undulations, and slime of one kind or another. And, most importantly, when they can't decide which way to go, they begin to look like something of a mess.

I think both our country and both its major political parties are at such a point right now. I have my preference about our direction (universal health care, gay marriage, a genuine response to global warming, a more moral distribution of power and wealth), which incline me to want the Democratic party to figure out a unified direction and start heading there. Frankly, I think the Dems, especially in Congress, are so indebted to moneyed interests, so focused on being nice and bipartisan, and so fearful of hazy, vague taunts of "socialist" and "liberal", that they can't inspire. However, I also know that real debate is essential for a healthy democracy, so I'd like to see the Republican party choose a new direction, even if it's one a don't agree with, rather than circling around leadership like Governors Sanford and Palin and contributing about as much to the national debate as Jon and Kate Plus Eight. Both parties are spiraling around themselves, and, as a nation, we've curved into this fetid, unsanitary shape. We should acknowledge what the slug is teaching us: From a distance, one could be forgiven for mistaking us for a dog turd, so we'd better get moving somewhere fast.

Selfishness and Sacrifice: An Honest Health Care Reform Debate

Congress is now up its neck in a debate about the nature of health care reform. From out here in the sticks, it looks to me like about a third of the representatives and senators are worried they'll pay a heavy price if they don't produce real health care for everybody, another third are worried they'll get clobbered if they produce anything resembling a tax increase or a cut in health care for the super-covered, and the middle third are worried about both. The most likely outcome, as I see it, is that they will all come to a consensus that the easiest position to defend is to do nothing of consequence and figure out how to blame the other side come election time. And they are probably right. And people will die early or unnecessarily as a consequence. And that is preemptively pissing me off.

Now, I've made it clear that I'm an Obama supporter, but that doesn't mean I'm some liberal version of a Rush Ditto-head. One of my beefs with Obama is that, too often, his attempt to usher in a new era of more polite politics devolves into a situation in which people get to pull the same kind of crap they always have, but they aren't called on it because they are so busy trying to be nice. And I'm not just talking about the Republicans in congress. The stimulus bill was a bunch of pork-laden crap, and there were really good reasons to oppose it, but these weren't the reasons I heard Republicans voicing. I think they were trying to figure out a way to be nice and enter into this new era of politics, so they criticized it for increasing the national debt. Now, the national debt is a real long-term problem, but no one should take a single Republican who was in office during the Bush presidency seriously on that front, since they all approved a couple wars and massive tax cuts at the same time. If the national debt is a serious concern, you whine about it during a debate about an unnecessary war, or you mention that when you're considering tax cuts for the rich. During an economic crisis, you either point to your consistent track record on the issue, or you shut the f--- up. No, the Republicans should have been shouting because the stimulus plan was misdirected. If that amount of money had been turned over directly to tax payers in the form of a progressively devised direct payment, the Republicans could have called it a tax cut. This would have been better for them, since a tax cut for the neediest Americans might open the door to a group who (let's face it) is wising up to the fact that the Republicans have not been working on their behalf for the last thirty years. Big win for them when they are looking to broaden their demographic appeal. Meanwhile, the Democrats could have touted the progressive structure of the stimulus as a sign that they took their mandate to heart, doing what the Bush gang did in spinning the bad polling about moral issues into a right wing mandate, only in reverse. They could have satisfied the far left, who they will certainly disappoint on other issues, and shown the lower-income red-staters just what a progressive tax structure might look like for them: a check. Instead, the Republicans essentially voted against Pelosi, making them look like "The Party of No", and the Democrats pushed through a stimulus plan that heavily favored the "too big to fail" CEOs, making them look like "The Party of Guys with Matching Priuses and Ferraris". Now, imagine a stimulus bill that, a year ago, had taken the form of significant checks, skewed significantly toward the lower and middle class. What do us poor folks do with that? The less responsible go out and buy TVs, tickets to Nascar, whatever. Good: that's some needed economic stimulus. The more responsible buy things like first homes or cars. That makes a significant dent in the housing crisis and helps bail out the auto manufacturers. The most responsible pay off their credit cards and put their checks in the banks, which helps to rescue the balance sheets of the banks themselves. Would it have created as many jobs as giving money to state governments to build roads? Possibly. Would that stimulus have hit the economy more quickly? Certainly. Consequently, it might have created more jobs, and better, more permanent ones, and it also would have prevented those super-massive bailouts for corporations. Now, as congress considers a second round of stimulus, the argument will not be about whether we should do this, because now folks are concerned about their jobs so they will put that money in the bank, and the banks are one of the sectors we've already rescued. Instead, the debate will be about the debt, which both sides have no real moral authority to gripe about. And that brings us back to health care.

When it comes to the health care debate, like Stimulus I, the debate will be about the wrong thing. It will be about whether or not we should have a public option, and the alternative of the status quo will be presented as revenue neutral and economically viable. And that pisses me off.

Now, I know the danger of over-simplifying an issue. We see it every time the issue of abortion comes up. One side tries to paint the other as a bunch of sluts who kill babies as birth control willy-nilly or, alternately, as a bunch of stupid religious zealots keeping women in some kind of chauvinistic sexual bondage when they aren't busy killing doctors. Both these positions might exist on the margins, but they are in such infinitesimal numbers that any popular vote to enact either side's agenda would be a loser. Imagine a ballot measure to charge any woman who had an abortion with homicide and lock her up for thirty years, even if the baby would not have survived and possibly threatened the health of the mother. Beyond the immorality, talk about a budget nightmare. No way that would pass. Or imagine the inverse; some kind of schema of mandatory abortions for some women. Would either initiative even come close to passing without people being deceived by some campaign to mask the true nature of the legislation in ridiculous rhetoric? Of course not. So any debate about abortion needs to be about the two things we're most uncomfortable confronting: the fact that we will have abortions (which we're all uncomfortable with) and we will have unwanted children (which we're also all uncomfortable with). That's a much more complex debate, but it's the one we need to engage in.

The health care debate, on the other hand, needs to be simplified to some degree, to get us away from the wrong argument, so that we can get to the real debate, which will be complex, but far less deceptive and heartless. We live in a country that, despite its economic woes, can afford to provide health coverage to every single citizen. We simply can. We have a system that is increasing in cost at an almost exponential rate, and it will eventually get to a point where we can't afford it. Health care is already one of the leading causes of personal bankruptcies, greatly harms many businesses' competitiveness if not their outright success, and will eventually bankrupt the government as well. And yet, the debate is about whether we can afford universal coverage. That's simply infuriating. We can't afford not to have universal coverage... or we have to change the law so that people without coverage do not have to be served by hospital emergency rooms, and can be allowed to die.

This may sound like a kind of modest proposal, but it's not an exaggeration: as long as our system requires that people with no coverage be provided with care, we have to figure out a way to provide them with coverage and get them to pay in while they are healthy. We already have universal health services. They're just really unequally and inefficiently delivered. People without health insurance don't pay, but they cost a lot. People with the most resources pay for their own care, but do not pay enough to cover the uninsured. That's clearly not sustainable. So we need to decide, will we let the uninsured simultaneously bankrupt the system and die unnecessarily in the process? Or, will we figure out a means by which the people with more resources pay more but receive two pretty significant bangs for their buck; they get to live in a country where their businesses and government can continue to be successful, and they don't have to live in a country where people are dieing unnecessarily all around them?

Now, here's something you will not hear coming out of the mouth of any congressional representative or senator who opposes universal health care, or its little brother, the "public option", or its bastard child, the public co-op: "It is more important that the wealthiest among us maintain both their incomes and the quality of care they've become accustomed to than that the government remain financially viable and poor people live."

They may say part of it out loud. They'll say we must maintain the quality of care. Fine, but if we expand that to everybody it costs money, and if we don't people die and the government goes bankrupt.

Or they'll say we can't afford to insure everyone. Fine, then we need to stop serving everyone at more expense in emergency rooms than we would if they had individual doctors and preventative care, and simply let them die.

They may say we're classists, or socialists, or Marxists, or some new slur for people who recognize that some people make more money than others, if we try to make wealthier people pay more of the cost. Fine, then we can have a flat tax on everyone, which poor people will not be able to pay, and it won;t be financially viable and we're back where we started, or we're back to letting the poor people die. I suppose there's another option there: We could let the poor go to debtor's prisons for not paying their health care taxes, then provide them with care there, driving up the costs for everyone, and create universal health care at a much higher price that way.

Universal health care is not only the one option which prevents a lot of unnecessary death, but, if done correctly, it's also the more financially sustainable choice. Anyone who says anything else is really saying their current coverage, at their current price, is worth more than both the lives of poor people and the quality of their country as a whole. I know the hard-core, Adam Smith capitalists truly believe in the virtue of selfishness, and I commend them for their strength of their conviction, even if I don't agree. I just want someone to marry the courage of their dogmatic adherence to capitalist virtue to the courage to say so publicly and clearly, especially on an issue where the intrinsic winning-and-losing nature of capitalism, the vaunted "creative destruction", results directly in people dieing. These quiet, seemingly compassionate capitalists are a bunch of hypocrites and cowards, and that's the nicest way I can put it.

Now, this kind of bald truth might not fit well in Obama's new, more polite politics, but it has to be said if we'll move to the real debate, which will still be incredibly complicated and will require politeness and decency. See, once we get beyond the acknowledgment that we have to move to some form of universal coverage, we still need to figure out exactly who is going to sacrifice, and how much. Health insurance companies, unless we leave in a bunch of unnecessary redundancy, will have to shrink down to efficient distributors or cease to exist entirely, and that's a significant sacrifice, though it's only from a small group of people. I expect those folks to fight to the bitter end, though they have to be able to see that they're doomed eventually. Doctors will want to make sure they get to maintain their salaries, though many will be grateful they get to spend more attention on treating patients than on haggling with insurance companies. Individuals outside the health care field will want to make sure they still have the options they currently enjoy. That's reasonable, as long as they realize that some fifteen million people have zero options, so they may have to make some sacrifices, too. (Over all, I think this gripe is greatly inflated. Does anyone really think that if only one government run insurance plan existed, their personal physician would not accept it, and would only serve patients who chose to pay out of pocket? Show me that doctor, and I'll show you a cosmetic surgeon.) Individuals will also have to acknowledge that there will be forms of rationing, probably in the form of delays of non-life-threatening elective procedures, though even here I expect some compromise situation can be developed where people can choose to pay extra to have procedures expedited so that everyone receives a baseline of care and the wealthy can get better care at their own expense. Developing the system, and addressing these concerns, will be difficult and will require courage. In fact, the more courageous we are at the outset (closing down insurance companies, for example, rather than leaving them in to add a profit margin to the cost of health care) the better the entire system will be in the long run.

But the one thing that we simply cannot accept is the kind of cowardice that allows Congress to push this off into the future, toward an immoral and unsustainable end. And that, I fear, is exactly what we're going to see over the course of the next month as this false debate is used to push the issue down the agenda. And it begs the question: Why are the people in Congress working so hard to avoid pissing off some of their constituents and losing their jobs, if they really want to make someone else deal with these issues anyway?