More than 46 million Americans live in poverty in the U.S. And that's based on census data that usually doesn't record the homeless or many immigrants who are simply missed or avoid a census survey every 10 years.
The question from many lawmakers, particularly conservatives, is why they won't simply boot-strap themselves to the great American Dream. The fact of the matter is that those entitlements most conservatives are most concerned about actually have an unintended consequence.
Poverty is a two-edged sword.
You could also call it a catch-22 or someone between "a rock and a hard place." The metaphors abound but they're built on actual fact. If you're poor enough you are eligible for benefits from the federal, state and local governments. If you're not, you're not.
And that's the problem. For many people, making as much as $1 more a month will eliminate them from programs like food-stamps (now called the Link card in many states), government housing, grants from utilities, financial assistance beyond food stamps to pay for things like toilet paper and soap, educational assistance and Medicaid.
The result is that incentive is diminished. Why would anyone take a job that pays them $200 a month more if that increase means they will lose $1,000 in monthly benefits defined by a poverty line? It's a bottomless pit and a logical dilemma. Benefits from federal, state and local governments continue to be measured against a fixed dollar amount measured monthly and/or annually. If you exceed either by as much as $1, you are no longer eligible for that benefit.
It doesn't get any better for people on Social Security. If you take your Social Security at age 62 which many people must do, you can't continue to succeed without penalty. For the year 2015, this limit on earned income is $15,720 ($1,310 per month). If you are collecting Social Security retirement benefits before full retirement age at 66, your benefits are reduced by $1 for every $2 you earn over the limit. Once you reach full retirement age, there is no limit on the amount of money you may earn and still receive your full Social Security retirement benefit.
The assumption is that you have other retirement options like a big pension or fat 401k, but thanks to some past mistakes by Wall Street and the pure greed of financial markets, how many people still have a 401k or IRA that's worth anything? For most people their Social Security income is sustenance income at age 62 and they will be punished if they try to make more money beyond fixed limits. That puts most of them at poverty level and their numbers will increase.
Why is that legitimate? I mean think about it: A person has invested in Social Security throughout their work history whether they like it or not, and now that investment has limitations? Why? And what is the rationale for that decision? If anyone has a clue, please share because it's not in the public domain. I never signed an agreement when I applied for a Social Security card that said there would be limitations on my ability to generate income in the future. How did this happen now?
Here's the fundamental question. How can the federal government bail out banks and financial institutions for horrific and egregious errors that wiped out the investment savings of millions of Americans, and then turn around and fine them for Social Security payments if they continue to work after they've taken their benefits at age 62?
The whole conundrum is confounded by the number of people with mental health issues who struggle to understand benefits let alone viable employment. How many of them wander our streets and live in misery in our jails? The result is a poverty trap that keeps people in a cycle of poverty with little incentive to pursue anything approaching the American dream. They're also not included in our census audits. How many homeless people are contacted let alone volunteer information to a census-taker?
This is not a Democratic or Republican party problem. It's a fact of life and these federal, state and local programs are both necessary and important, but they have unintended consequences. The poverty-pit is an unintended consequence of compassion and necessity.
So how do we boot-strap from the poverty-pit?
For one, lift the Social Security penalty. Many Boomers lost it all when their companies or investments were vanquished by Wall Street speculation. The Federal government bailed out the banks, but for those people who counted on their retirement savings -there's nothing left but Social Security and a penalty if you have to still work to maintain a better quality of life if you take your benefits at the minimum age of 62.
Two. Create a sliding scale that allows someone to transition to a better wage, and increased monthly income without the abrupt loss of benefits because of a fixed dollar amount cutoff based on a monthly income increase or a tax return AGI that exceeds the limit by $1.
The current argument is for the lifting of the federal minimum wage. It's surprising more conservatives aren't supporting it because it will most likely disqualify many Americans from poverty level benefits.
There's also a question related to the Earned Income Tax Credit. This offers some relief from federal taxes, but it does nothing for someone who once again faces the $1 cutoff for monthly benefits.
We should also think in terms of the lost, hopeless and homeless. The Smarter Sentencing Act would apply a more intelligent approach to an individual's challenges rather than the blind assumption that they are a pox upon the public.
There are some politicians who want to revoke "entitlements" or programs like food stamps or government assisted housing. The caution is that a starving population is not happy. The French learned that very well long ago.
On the other hand, a population that is caught in the vise-grip of subsidies and fixed monthly and annual ceilings for benefits feel the same, simmering frustration. We need a sliding scale that allows people to transition from poverty to productivity without the penalty of cruel, dollar-amount cutoffs. We need to be wise with regards to how we treat our homeless and people with mental health issues. We need to be sensitive rather than cruel. Without some relief and a good dose of wisdom, it will be the extinction of the American dream.
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