The new version of poverty

[allvol123]

Thought this was interesting. That crazy Obama guy, got to love him.

The current poverty measure counts absolute purchasing power — how much steak and potatoes you can buy. The new measure will count comparative purchasing power — how much steak and potatoes you can buy relative to other people. As the nation becomes wealthier, the poverty standards will increase in proportion. In other words, Obama will employ a statistical trick to ensure that “the poor will always be with you,” no matter how much better off they get in absolute term

Obama’s New ‘Poverty’ Measurement - Robert Rector - National Review Online

 

[thekicker33]

Man, oh man. The poor will always be with you, regardless of how much more income an individual gets.

There will always be an upper, middle and lower class... THey will just go by different definitions.

Lets say the poor now is classified as having less than $5,000 (made up number), middle class = 10,000, and upper class = 15,000.
All of a sudden, people get much better off "in absoulute term." Accordingly, the poor become $10,000, middle class 15,000 and upper class 20,000.

However, with people getting better off, prices will go up due to the whole supply and demand thing. Accordingly, the poor will always have the same amount of purchasing power, along with the middle and upper classes.

 

[volinbham]

.

However, with people getting better off, prices will go up due to the whole supply and demand thing. Accordingly, the poor will always have the same amount of purchasing power, along with the middle and upper classes.

Simply not true.

 

[thekicker33]

uhhhhhhhhhhhhhhhhhhh, yes it is

 

[arTfuldodger]

What indication do you see that makes you say "as the nation gets wealthier"?
Posted via VolNation Mobile

 

[IPorange]

Man, oh man. The poor will always be with you, regardless of how much more income an individual gets.

There will always be an upper, middle and lower class... THey will just go by different definitions.

Lets say the poor now is classified as having less than $5,000 (made up number), middle class = 10,000, and upper class = 15,000.
All of a sudden, people get much better off "in absoulute term." Accordingly, the poor become $10,000, middle class 15,000 and upper class 20,000.

However, with people getting better off, prices will go up due to the whole supply and demand thing. Accordingly, the poor will always have the same amount of purchasing power, along with the middle and upper classes.

That isn't how it works...

 

[thekicker33]

http://www.debunkingeconomics.com/Maths/Present_for_Sraffa_files/image002.gif

when demand goes up, so do prices! So please tell me how what I said isn't true

 

[thekicker33]

That isn't how it works...

then please tell me, cause i'm pretty sure the chart I just provided proves my side

 

[volinbham]

http://www.debunkingeconomics.com/Maths/Present_for_Sraffa_files/image002.gif

when demand goes up, so do prices! So please tell me how what I said isn't true

you indicated that the purchasing power will never change since growth in income will be completely offset by inflation. That is simply not a fact. The two often move together but real income (adjusted for inflation) has grown many times throughout our history.

 

[thekicker33]

So you mean to tell me the poor nowadays compared to the poor 50 years ago have more purchasing power. Dude, you're wrong. More demand=higher prices unless supply picks up. that's just basic economics

 

[volinbham]

So you mean to tell me the poor nowadays compared to the poor 50 years ago have more purchasing power. Dude, you're wrong. More demand=higher prices unless supply picks up. that's just basic economics

You're right. Your supply demand curve shows that standards of living never increase. Wow. Economics is so simple.

 

[bam15]

Uh....

 

[thekicker33]

Thanks for proving my point even more. Standards of living do increase over time. That didn't help your argument at all. Please stop while you're behind

 

[arTfuldodger]

I think he's saying that it often happens as you describe but it doesn't HAVE to happen like that. They often move together but not always and one can move without the other as well.
Posted via VolNation Mobile

 

[BeecherVol]

So you mean to tell me the poor nowadays compared to the poor 50 years ago have more purchasing power. Dude, you're wrong. More demand=higher prices unless supply picks up. that's just basic economics

Could that open the door for more supply?

 

[volinbham]

Thanks for proving my point even more. Standards of living do increase over time. That didn't help your argument at all. Please stop while you're behind

:blink:

 

[Daddy Gee]

somebody has econ 101 this semester..... or is in Junior Achievement... opcorn:

 

[thekicker33]

This is just awesome Bam............... There has always been and always will be a lower class, who don't have the same amount of purchasing powering. Maybe you can explain it better than me, lol

 

[volinbham]

somebody has econ 101 this semester..... or is in Junior Achievement... opcorn:

the teacher/adviser should be fired for malpractice

 

[thekicker33]

Could that open the door for more supply?

Yep, it sure could. Still doesn't mean it would work that way. Businesses will work toward a higher profit, so supply might not increase. Just depends.

 

[thekicker33]

somebody has econ 101 this semester..... or is in Junior Achievement... opcorn:

Took it about 8 years ago. But I did get an A

 

[volinbham]

This is just awesome Bam............... There has always been and always will be a lower class, who don't have the same amount of purchasing powering. Maybe you can explain it better than me, lol

that is not what you said. there will be a lower class but that doesn't mean their purchasing power doesn't effectively change. lower class is a relative measure while purchasing power is less so. The point of the OP is that the new version makes purchasing power relative so even if all are doing well, the lowest will still be considered in poverty since they cannot buy as much as others.

I guarantee the poor today can buy more goods and services than the poor of yesteryear. Their real income is higher.

 

[BeecherVol]

Yep, it sure could. Still doesn't mean it would work that way. Businesses will work toward a higher profit, so supply might not increase. Just depends.

Not a econ. buff. But when demand is high new business has the opportunity to blossom, in an area where the market is cornered by high prices.

That could increase supply, and lower prices due to competition, I guess.

 

[thekicker33]

that is not what you said. there will be a lower class but that doesn't mean their purchasing power doesn't effectively change. lower class is a relative measure while purchasing power is less so. The point of the OP is that the new version makes purchasing power relative so even if all are doing well, the lowest will still be considered in poverty since they cannot buy as much as others.

I guarantee the poor today can buy more goods and services than the poor of yesteryear. Their real income is higher.

You're right the poor can purchase more today... But when comparing the purchaing power of the poor today and the rich today compared to the same groups of yesteryear, the purchasing power is probably the same.

 

[thekicker33]

Not a econ. buff. But when demand is high new business has the opportunity to blossom, in an area where the market is cornered by high prices.

Can't believe I'm having this discussion. The OP's post was about the poor always being with us. That will NEVER change. It's just relative to the times that you live.