By James D. Agresti, January 25, 2020
While pressing her agenda to expand means-tested welfare programs, Democratic Congresswoman Alexandria Ocasio-Cortez is claiming that the federal government’s poverty statistics vastly undercount the number of Americans who are “destitute.”
In reality, the exact opposite is true because those statistics omit a broad range of government benefits, charity, and unreported income. When these are counted, the poorest fifth of U.S. households consume five times more goods and services than the poverty stats reveal. These material resources amount to an average of more than $50,000 per household per year, making the poorest fifth of Americans richer than the averages for all people in most developed nations of the world.
In a recent video, AOC alleges: “You would not know that our country is posting record profits because 40 million Americans are living in poverty right now, and if the poverty line was real—if it was around what some people think it should be—about $38,000 a year, we will be shocked at how much the richest society on the planet is allowing so much of its people to live in destitute [sic].”
Her number of 40 million is roughly equal to the Census Bureau’s figure of 38.1 million, or 11.8% of the U.S. population. This represents merely one of the widely different ways of measuring poverty, but it is the federal government’s official measure, and the media follows suit. As stated in a 2019 paper in the American Economic Journal: Applied Economics: “The official poverty rate is also one of the most cited government statistics in the popular press.”
Without vital context—which AOC and most news reports fail to provide—the oft-cited Census poverty stats are highly misleading. For as the Census Bureau explains, they don’t “include the value of noncash benefits such as those provided by SNAP [Food Stamps], Medicare, Medicaid, public housing,” and a host of other goods and services that the poor receive from government and charities. More specifically:
- Food Stamp beneficiaries received an average of $3,200 per household in Food Stamps during 2017.
- Medicaid beneficiaries received an average of $7,794 per person in healthcare benefits during 2016.
- Section 8 voucher beneficiaries received an average of $8,333 per household in rental assistance during 2016.
- Head Start beneficiaries received an average of $9,871 per child in childcare and preschool benefits during 2017.
- Other government programs provide noncash welfare benefits in the form of utility assistance, college grants, school lunch, school breakfast, community health centers, family planning services, prescription drugs, job training, legal services, cell phones, cell phone service, and internet service.
- Federal law requires most hospitals with emergency departments to provide an “examination” and “stabilizing treatment” for anyone who comes to such a facility and requests care for an emergency medical condition or childbirth, regardless of their ability to pay and immigration status.
- Private charities provide additional benefits to low-income people, such as food, clothing, housing, and healthcare.
Furthermore, Census income and poverty figures are obtained through household surveys, and low-income households don’t report much of their cash income in such surveys. Regarding this:
- A study published by the American Economic Journal in 2019 found that 63% of all New York State households who received benefits from two major cash welfare programs did not report any of this money to the Census Bureau.
- The same study found that people who did report receiving cash welfare from these two programs received an average of 65% more money from the programs than they reported to the Census Bureau.
- In 2013, the chief actuary of the U.S. Social Security Administration estimated that 3.9 million illegal immigrants worked “in the underground economy” during 2010.
- In 2016, the IRS reported that 63% of income not reported to the IRS by third parties (like employers) is never reported to the IRS by the people who receive the money.
The Big Picture
An official federal measure that accounts for all of people’s material resources is called “consumption.” Recorded by the federal government’s Bureau of Economic Analysis, it is a comprehensive measure of the goods and services consumed by households. It is also the World Bank’s “preferred welfare indicator, for practical reasons of reliability and because consumption is thought to better capture long-run welfare levels than current income.” Significantly, a 2003 paper in the Journal of Human Resources explains that “consumption standards were behind the original setting of the poverty line,” but government changed to the current method because of its “ease of reporting.”
The Bureau of Economic Analysis normally reports consumption for the entire nation and doesn’t break down the data to show how people at different levels fare. However, it published a report in 2012 that does that for 2010. Placed side-by-side with the Census Bureau income figures that underlie its poverty stats, the differences are striking—particularly for the poorest and richest U.S. households:
The federal data graphed above shows that the poorest 20% of U.S. households consumed an average of $57,049 of goods and services per household in 2010, while they reported an average of $11,034 in pre-tax money income to the Census Bureau. This means that widely reported federal poverty stats exclude about 80% of the material resources of low-income households. Put simply, the poorest fifth of U.S. households consume five times more goods and services than the poverty stats reveal.
AOC argues that the federal poverty line for “1 earner & a mother home full-time” should be $38,000/year, as compared to the current line of about $26,000 for a family of four. She attempts to justify this by saying that the current line “doesn’t include cost of childcare, geographic cost of living, or healthcare.” What she neglects to say is that low-income households typically receive such items and many others for free or greatly reduced prices.
In contrast, most U.S. households earn their healthcare, housing, food, childcare, phone service, and such for themselves, while also paying taxes that fund these items for others. As a result, U.S. middle-income households consume only 26% more goods and services than the poorest fifth.
The impacts of this wealth redistribution are even more drastic for the richest fifth of U.S. households, who forfeit a large portion of their income to taxes and receive few government benefits. They report 15 times more pre-tax money income than the poorest fifth of households, but they consume only twice as much goods and services as the poorest fifth.
Given that the available data treat the poorest 20% of households as a single group, while 11.8% of U.S. residents are officially in poverty, one might assume that poor households consume markedly less than the $57,049 average for the group. However, other government data suggests that is not the case. The U.S. Bureau of Labor Statistics collects data on a subset of consumption called “consumer expenditures.” These show a mere $2,179 difference between the lowest 10% of U.S. households and the second lowest 10%. Since consumer expenditures exclude many forms of non-cash welfare, and eligibility for welfaredeclines as income rises, the poorest 10% may consume more goods and services than the second-poorest 10%.
Contrary to AOC, the facts are clear that frequently reported federal poverty stats vastly overstate the number of Americans who are destitute. Moreover, Just Facts’ recent study of data from the World Bank and the U.S. Bureau of Economic Analysis reveals that the poorest fifth of Americans consume more goods and services than the averages for all people in most developed nations of the world. In spite of these facts, AOC decries “economic injustice in America” and insists that the U.S. cannot “capitalism our way out of poverty.”
By James D. Agresti
November 25, 2019
Leading presidential candidates and major media outlets are claiming that school districts with high concentrations of minorities and poor children generally receive less funding per student than other districts. That hasn’t been true for at least half a century, but people are spreading this myth through deceptive studies that exclude federal funds.
In reality, a broad range of credible studies that include all funding sources show that such school districts are as well-financed as others.
According to Democrat presidential hopeful and U.S. Senator Elizabeth Warren, “our current approach to school funding at the federal, state, and local level underfunds our schools and results in many students from low-income backgrounds receiving less funding than other students on a per-student basis.”
Along the same lines:
- Sarah Mervosh of the New York Times reported in early 2019 that “on average, nonwhite districts received about $2,200 less per student than districts that were predominantly white….”
- Maria Danilova of the Associated Press (AP) reported in 2018 that “the highest-poverty” school districts “receive an average of $1,200 less per child than the least-poor districts, while districts serving the largest numbers of minority students get about $2,000 less than those serving the fewest students of color….”
- Democrat presidential contender and U.S. Senator Bernie Sanders claims that “less is invested in the education of children from low-income families compared with their more affluent peers” because “school districts are funded out of local property taxes.”
- Clare Lombardo of National Public Radio (NPR) reported in 2019 that “high-poverty districts serving mostly students of color receive about $1,600 less per student than the national average.”
With the exception of Sanders—who provides no evidence to support his claim—all of the others misrepresent their sources by failing to reveal that they ignore federal funds. Moreover, their sources obscure this fact in the following ways:
- Warren cites a study by the Education Law Center, which refers to federal funding on page 2 but then never accounts for any of it. Instead, the study mentions on page 5 that it uses “actual state and local revenues” for its analysis.
- The New York Times and NPR cite a report from EdBuild, which doesn’t say a word about the exclusion of federal revenues. Instead, it tacitly slips this into a separate webpage of “research methods“ that references “revenues from state and local sources” while ignoring federal revenues except when subtracting out charter school funding.
- The AP cites a report from the U.S. Commission on Civil Rights that repeatedly mentions federal funding, but when it presents the $1,200 and $2,000 underfunding figures quoted by the AP, it cites a study from the Education Trust that explicitly excludes “federal sources.” The Commission on Civil Rights doesn’t even allude to this fact—and to discover it, readers must go to the footnote and then locate the study from a citation with an unclickable link.
In short, these politicians and journalists never hint that their statistics exclude federal funds, and the sources they appeal to bury this crucial caveat. This ensures that only diligent readers with time to investigate will learn the truth.
Moreover, those who propagate this falsehood often call for more federal funds to fix this contrived disparity. But since they ignore federal funding, their proposals to increase it will not change the statistics they present.
Warren’s K–12 education plan, for instance, makes the false claim quoted above and then calls for “quadrupling Title I funding—an additional $450 billion over the next 10 years—to help ensure that all children get a high-quality public education.” Title I is the largest source of federal K–12 education funding, but because Warren doesn’t count this money in her statistics, her plan won’t affect her own measure of school funding.
Wide-ranging studies that include all education funding—like those conducted by the U.S. Department of Education (1996), Ph.D. economist Derek Neal (2006), the left-leaning Urban Institute (2008), and the conservative Heritage Foundation (2011)—have all found that school districts with higher portions of minority students spend about the same amount per student as districts with smaller portions of minorities.
The Urban Institute study, which looks the furthest back in time, found that “differences in spending per pupil in districts serving nonwhite and white students are very small” since at least 1972.
Likewise, a study published by the journal Education Next in 2017 found that “per-student K–12 education funding from all sources (local, state, and federal) is similar, on average, at the districts attended by poor students ($12,961) and non-poor students ($12,640), a difference of 2.5 percent in favor of poor students.” The study also found that “this difference has not changed much since 1994–95,” the earliest data in the study.
Within school districts, research published by the Brookings Institution in 2017 found that “on average, poor and minority students receive between 1-2 percent more resources than non-poor or white students in their districts, equivalent to about $65 per pupil.”
The Property Tax Charade
Warren alleges that “school systems rely heavily on local property taxes, shortchanging students in low-income areas.” This was previously the case, but it hasn’t been so for decades. As explained by the Urban Institute:
In the past, because public schools were funded largely by local property taxes, property-rich and -poor school districts differed greatly in expenditures per pupil. Since the early 1970s, however, state legislatures have, on their own initiative or at the behest of state courts, implemented school finance equalization programs to reduce the disparity in within-state education spending.
Consequently, data from the U.S. Department of Education show that local revenues have declined from 83% of all school funding in 1920 to 45% in 2016:
Furthermore, the chart above only shows national averages. These don’t reveal the fact that school districts in low-income areas typically receive greater portions of their budgets from state and federal funds. For example, the U.S. Government Accountability Office reported in 2011 that some school districts receive no federal Title I education funding, while others receive as much as 36% of their budget from it.
Along with increasing shares of school funding paid by state and federal taxpayers, the inflation-adjusted average spending per student grew by 22 times in the same era:
Some people openly argue that federal funding should be ignored when comparing schools, because this money is meant to help disadvantaged students. However, federal law is at odds with such logic.
The Education Trust, for example, writes that it excludes such funds from its analysis because “federal dollars are intended—and targeted—to provide supplemental services to such specific groups of students as those in poverty, English learners, and students with disabilities.”
In accord with that view, the Obama administration published an issue paper stating that federal education funding “is intended to provide the extra help low-income students need to succeed, but it cannot do that if state and local funds are not evenly distributed to start with.” The administration also drafted regulations to impose this requirement on school districts.
In contrast, the applicable federal law explicitly states that “nothing in this subchapter shall be construed to mandate equalized spending per pupil for a state, local educational agency, or school.” Thus, the Congressional Research Service determined that the Obama administration’s proposed regulations “appear to directly conflict” with the law.
Federal law does require that states and localities not reduce their funding to schools when they receive federal funds. This provision says that states and localities can only use federal funds “to supplement the funds that would, in the absence of such federal funds, be made available from state and local sources,” “not to supplant such funds.” This does not require that funding be equal before or even after federal funding. It simply requires that states and localities don’t cut other funding just because they receive federal funds.
The law also requires that local school districts provide services that “are at least comparable” to all schools within their district before they receive federal funds. New York City, for example, cannot provide unequal services to schools and then use federal funds to equalize them. To meet this requirement, districts must provide similar staff-to-student ratios, “curriculum materials,” and “instructional supplies” to schools in their district in order to receive federal funds.
Nevertheless, politicians and unions sometimes create funding disparities within local school districts by agreeing to contracts that give senior teachers more pay and discretion to choose the schools where they work. These higher-paid teachers tend to avoid inner-city schools with high rates of crime and student discipline problems, resulting in lower spending-per student in poor neighborhoods. Federal law permits this practice by excluding “staff salary differentials for years of employment” from its compliance provisions.
Regardless of any rationale for excluding federal funds from school funding comparisons, it is deceitful to omit such money without even a hint. Yet, Elizabeth Warren, Bernie Sanders, the New York Times, National Public Radio, and the Associated Press are doing just that.
Such disinformation is enabled by advocacy groups like EdBuild and the Education Law Center, which publish reports that exclude federal funds while burying this vital fact.
Warren takes the deception even further by leading people to believe that she actually accounts for federal funds. She does this by claiming that “the current investment in Title I—$15.8 billion—is not nearly enough to make up for state-level funding inequities,” but her supposed evidence for this is a study that excludes all of this money. This provides false grounds to continually demand more from taxpayers and to portray the U.S. education system as systemically racist.
by Tabitha Korol and Kevin O’Neil
We can all fight for a cause, but “The function of wisdom is to discriminate between good and evil. – Marcus Tullius Cicero
They began as idealists, working to save the French-Jewish army Captain Alfred Dreyfus who’d been falsely accused of conspiring with the Prussian army. The Dreyfus Affair of the mid-1890s and early 1900s was the impulsion for people to unite in support of the rights of the individual before a military authority that was rightly seen to be draconian and dismissive. A worthy cause, yet the case divided France into the anti-Dreyfusards, fascist, Jew-hating ultranationalists, and the “Dreyfusards,” the anti-fascists who formed associations and humanitarian consensus to gain his exoneration.
Today’s anti-fascists, “Antifa,” miss the point if they see themselves as successors to the Dreyfusards. The latter were inspired by love of the individual, a positive inspiration, whereas Antifa is motivated by negative hatred for the establishment and the abuse of the individual who happens to disagree with them
Defining the term fascism has proven notoriously difficult. There were German antifascists in the early 1900s who joined the Jewish working class to fight for dignity and better wages, and Italian antifascists who fought against Benito Mussolini’s Fascist Party and Hitler’s growing influence. There were also Spanish antifascists both before and during Spain’s civil war, with writers Orwell and Hemingway among their ranks.
But there are sufficient differences between the various fascist regimes that make it virtually impossible to identify a commonality. However, most leading scholars agree that all fascists support the violent revolutionary overthrow of the state’s entire government to be replaced with a totalitarian system that diminishes the value of the individual to a mere component of the whole. Any difference of opinion is seen as fair game to be silenced.
Antifa are a burgeoning collection of discontented militant-leftist groups who, convinced that white supremacism was responsible for chattel slavery and the Holocaust, are allied in their attempt to overthrow “white” western government by any means available, including violence.
British political theorist Roger Griffin, author of “The Nature of Fascism,” wrote, “Fascism is a genus of political ideology whose mythic core in its various permutations is … palingenetic,” which means that a “rebirth” would follow the demolition of the existing political order. By this scholarly definition, Antifa’s own methods and goals fulfill the criteria – not of anti-fascism – but of Fascism!
After interviewing 61 current members in 17 countries, Mark Bray, author of “Antifa: The Anti-Fascist Handbook,” asserts that militant antifascism is a “reasonable, historically informed response to the fascist threat that persisted” after World War II and into recent years. They argue that every fascist or white-supremacist group has the potential of being the start of Mussolini’s original hundred or Hitler’s first fifty-four members of the German Workers’ Party. Hence, they believe they have a righteous obligation to stop what they regard as fascist “violence, incivility, discrimination, and speeches that stimulate further white supremacy, oppression and genocide.”
And fascism, real fascism, must be opposed. Edmund Burke’s statement was never more apposite, “The only thing necessary for the triumph of evil is for good men to do nothing.”
In “The View from My Window: The Ethics of Using Violence to Fight Fascism,” Elie Wiesel recalled familiar riots while he was watching one play out below his fifth-floor window in Berkeley. It brought to mind the millions of people who fought fascism throughout Europe and he suitably wondered at what point resistance to fascism may be justifiable.
A very sobering question! And whatever the “point” is at which action is justified, one thing is certain: we must be able to define fascism and be convinced that the group we oppose is truly fascistic.
Not only had Wiesel witnessed real fascism at work, but had suffered from it, and lost both parents and a sister to the Nazis. He recalled the brave month-long resistance of the Jews in the Warsaw Ghetto when the Nazis came to liquidate it, April 19, 1943. Move than fifty-six thousand Jews were killed, very few escaping. This is the face of real fascism.
America is not Warsaw; neither is it remotely similar. We are not ruled by an authoritarian power, and our laws are not for the subjugation of the individual but for his/her protection. Antifa must ask themselves if they are even capable of actually recognizing true Fascism.
Columnist Mark Thiessen wrote in The Washington Times (6.30.17) that Antifa was the “moral equivalent of neo-Nazis.” The statement may or may not be prescient, but it will not be the first time in history that a movement that began as an ideological liberator abandoned reason and descended into violence and incoherent rage. In the famous words of Goya, “The sleep of reason produces monsters.”
If Antifa truly aspire to being worthy successors to the antifascist groups of history, they must urgently learn the meaning and methods of fascism and be prepared to come to some very disturbing conclusions.
Armstrong Economics Blog/Rule of Law
Re-Posted Jan 21, 2020 by Martin Armstrong
There is a new separatist movement forming in Virginia over the proposed gun laws. This new separatist movement taking place is in a state that already separated into two back in 1863 which some question whether it was lawfully carried out back then.
US Constitution: Article IV: Section 3
New States may be admitted by the Congress into this Union; but no new State shall be formed or erected within the Jurisdiction of any other State; nor any State be formed by the Junction of two or more States, or Parts of States, without the Consent of the Legislatures of the States concerned as well as of the Congress.
The interesting question was that since Virginia moved and joined the Confederate States, was their consent still required if they did not regard themselves to still be a state of the union? Hence, West Virginia was formed during the American Civil War (1861–1865) and is actually the only state to form by seceding from a Confederate state. The western part of the state of Virginia (1776–1863), was deeply against the views of the rest of Virginia over slavery. The population of West Virginia moved to separate from Virginia and was formalized by admittance to the Union as a new state in 1863.
Today, we have yet another rising separatist movement within Virginia as a result of House Resolution 8 which was introduced on January 14, 2020. This provides for an election to be had, pending approval of the General Assembly of the Commonwealth of Virginia, and a majority of qualified citizens voting upon the proposition prior to August 1, 2020, for the admission of certain counties and independent cities of the Commonwealth of Virginia to be admitted to the State of West Virginia as constituent counties, under the provisions of Article VI, Section 11 of the Constitution of West Virginia. The Legislature of West Virginia separated over the differences which had grown between the counties of Western Virginia and the government at Richmond, of the Commonwealth of Virginia. They concluded that they were irretrievably divided and therefore they formed a new State of West Virginia.
The Trans-Allegheny portions of Virginia perceived that they suffered under an inequitable measure of taxation by which they bore a disproportionate share of the tax burden in the state which is often a common complaint under socialism. They have argued that the Trans-Allegheny region has been denied its equitable share of representation in the government prejudiced by a large number of people demanding benefits from Richmond.
The realization that when the majority demands benefits from those who produce, much like Rand’s Atlas Shrugged, then the majority can impose tyranny upon the minority and thus government no longer becomes the unbiased arbitrator within society. The neglect for the interests of many of the remaining counties of the Commonwealth of Virginia is at the heart of this rising separatist movement.
More recently, the government at Richmond has adopted the restraint upon the rights guaranteed under the Second Amendment of the United States Constitution to the citizens of that Commonwealth. In the months since Democrats took control of Virginia’s government for the first time in over two decades, over 100 localities across Virginia have passed resolutions declaring themselves “Second Amendment Sanctuaries,” stating that they’re opposed to any bills which would restrict Second Amendment rights.
There is rising tension in Virginia ever since the Democrats took control of the State