July 13, 2007

The Israeli Economic Miracle

By Noah Pollak

Against the backdrop of the events that typically cause Israel to be in the news -- the conflict with the Palestinians, war with Hezbollah, genocidal threats from Iran, and the like -- people often forget that there are normal things happening in Israel. And in many cases, extraordinary things, like the amazing performance of the Israeli economy over the past decade. Haaretz reports that the TA-25, the flagship index of the Israeli stock market, has increased forty percent in the last year. A period that has included a month of warfare, massive public discontent with the Israeli political echelon, and the takeover of Gaza by Hamas.

CFT0713_0839252230E.bmp

The TA-25's performance over the past year.

This remarkable record has been occasionally noted in the press. If you're curious, you can read pieces in the Financial Times, the Christian Science Monitor, and the Jerusalem Post. And this profile of one of Israel's leading venture capitalists by one of Israel's leading journalists, Ari Shavit, is fascinating.

What accounts for this growth? A vital factor is of course the Israeli culture, which embraces entrepreneurship, risk-taking, and ingenuity. But no economy, no matter how entrepreneurial its people, can flourish in the poisonous soil of socialism. Israel was always strangled by an overbearing bureaucracy, punitive levels of taxation, and suffocating regulatory policies. In 2003, Benjamin Netanyahu became Ariel Sharon's finance minister, and during his three-year tenure pushed through a set of market-friendly, and desperately needed, reforms. The resulting growth is more evidence that Netanyahu's greatest accomplishment in government is arguably his economic reforms; he is Israel's Thatcher, and the line we see today that ascends across the TA-25 index is in large part owed to Bibi.

Add Israel's to the list of economies that have been saved from self-destruction by simple and obvious market reforms.

Posted by Noah Pollak at July 13, 2007 11:30 AM
Comments

The Israeli stock exchange is up, mainly due to the blooming hitech industry.

But, you forgot to mention that the ration of poor people has risen in recent years. The gap between the rich and poor has widened. Israel is experiencing strong American-style growth.
At least in the USA, the wealth is divided between many rich people. Here, 18 families control the vast majority of the economy. The state's assets were privatized for extremely low prices. Most of them weren't sold to the public via the stock exchange, but were sold to one of these tycoons.

Too many people have suffered from Netanyahu's reforms. The budget cuts hit the weakest people in Israeli society: single mothers, disabled people and old people. Some of them survived the Nazi camps, and they now live in great poverty.

He was severely punished in the elections, with his Likud party plunging from 40 to 12 seats in the parliament.

So, there was no Israeli Economic Miracle for the majority of Israelis.

Posted by: Yohay at July 13, 2007 12:18 PM

No mattter how many trillions of dollars are poured down the bottomless pit of "helping the poor", it is never, ever enough. There is always a liberal just waiting to whine about the number of people living in poverty.

I don't know about Israel, but here are some facts about those living below the official poverty line in America:

76% percent of poor households have air conditioning. By contrast, 30 years ago, only 36 percent of the entire U.S. population enjoyed air conditioning.

46% of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio.

Only 6 percent of poor households are overcrowded. More than 66% have more than two rooms per person. The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)

Nearly 75% of poor households own a car; 30% own two or more cars.

97% of poor households have a color television; over half own two or more color televisions.

78% percent have a VCR or DVD player;

62 % have cable or satellite TV reception.

73% percent own microwave ovens, more than half have a stereo, and a third have an automatic dishwasher.

Virtually everyone has a telephone.

Virtually all of the poor have plenty of clothing; very few people freeze in the winter.

They all have access to free public education.

They all have access to free medical care at emergency rooms.

They all have access to free food through the food stamp program. In fact, the single biggest health problem among the poor in the U.S. is obesity.

On the average, they work less than 1000 hours a year, which is about 20 hours per week.

Work half the time, enjoy the stuff listed above, and you will still have politicians agitating to suck more blood out of those who work full time to give to those only working 20 hours a week.

Posted by: Michael Smith at July 13, 2007 03:45 PM

Hey Michael Smith,

Where did you get those stats? They are very interesting, just wondering if you could point the way to them. Thanks.

Posted by: Miguel at July 13, 2007 04:04 PM

"the single biggest health problem among the poor in the U.S. is obesity."

Poor people do tend to be fatties. They also have a higher standard of living than I do, wtf? It's like there are two America's or something.

Posted by: mikek at July 13, 2007 04:27 PM

"you forgot to mention that the ration of poor people has risen in recent years."

This comes up every time somebody mentions that non-socialist policies have made a country richer. It's absurd because it's based on a useless statistic.

The infamous "poverty" line is, I believe, defined as 25% of the median income. It shows not poverty but income inequality.

Liberals prefer to refer to it as having something to do with poverty though because being against poverty sounds better than being against income inequality. (Most people would be "against poverty" but fewer people would argue that everyone should be paid the same no matter what or how much they work.)

He thus didn't "forget" to mention it, he merely didn't mention it because it had nothing to do with the subject. Noah was talking about economic growth, not income equality.

If more people make more money, the poverty line will rise and more people will become "poor" according to that standard. Ironically, assuming that the whole poverty line statistics theme is not a scam, this means that economic growth will always cause more people to fall under the poverty line for the simple reason that the rich will profit from a growing economy more than and before the poor.

(The statistics about the American poor are quite interesting. I had seen them before.)

Posted by: Andrew Brehm at July 13, 2007 05:38 PM

"He was severely punished in the elections, with his Likud party plunging from 40 to 12 seats in the parliament."

That had nothing to do with Ariel Sharon and Kadima but was about economic policy?

"So, there was no Israeli Economic Miracle for the majority of Israelis."

Your arguments don't show that. Could you please substantiate your claim with statistics? How much did a member of that majority make before and after Bibi's reforms? How much did prices change?

How do you know this? Based on your posting I would say that if what convinced you is what you told us here, you are guessing.

Posted by: Andrew Brehm at July 13, 2007 05:44 PM

ah, yes Michael Smith, it's just wonderful being poor. What more could anyone want than a color television, a VCR and the right to wait for 15 hours in an emergency room to get a prescription.

As for Bibi - wasn't the Israeli economy booming until just about the moment he became prime minister? And from that moment on didn't the boom end and the economy implode?

Posted by: mertel at July 13, 2007 06:19 PM

Israel can not for a second live without the subsidies it recieves from the world. They take Holocaust survivors to the Hague and other international courts to recieve compensation due to Hitlers actions - 60 years late. Then, to my not-very-amusement the money won in court ends up financing public institutions in Israel - such as the Health sector.

http://www.haaretz.com/hasen/spages/881382.html
http://www.haaretz.com/hasen/spages/881635.html

Posted by: Ellie at July 13, 2007 06:39 PM

"They all have access to free medical care at emergency rooms." - Micheal Smith.

I strongly urge you to watch the very much hated Micheal Moores movie Sicko.

Posted by: theCourtFool at July 13, 2007 09:05 PM

You can not prove any theory concerning Israel by using USA statistics.
Yes. there is a general deterioration in the quality of life in Israel. large sections of the public are more and being alienated from the system. Public education have degenerated significantly. Postal services the same. The word socialism means nothing. But the economic models of Canada, Denmark, Belgium and Holland would fit Israel much better than the USA one.
Most important, you can not divorse the results of last year war from the fact that the society in Israel in more fragmented than ever and that the sense of one perpose democratic unity is fast decaying.

Posted by: hazbani at July 13, 2007 11:52 PM

"ah, yes Michael Smith, it's just wonderful being poor. What more could anyone want than a color television, a VCR and the right to wait for 15 hours in an emergency room to get a prescription."

So what exactly is so bad about being "poor" if one has a TV and access to medical care?

(BTW you can get a prescription from a local doctor. Costs about 50 quid. You can sell your TV or possibly one your cars if you don't have that amount of money. I assume American prices are nt too different.)

"As for Bibi - wasn't the Israeli economy booming until just about the moment he became prime minister? And from that moment on didn't the boom end and the economy implode?"

Ehm, no?

Posted by: Andrew Brehm at July 14, 2007 01:03 AM

"Israel can not for a second live without the subsidies it recieves from the world."

If you read Noah's article you might find that his point was very much that it can. If you can show evidence for your claim, please come forward with it.

"They take Holocaust survivors to the Hague and other international courts to recieve compensation due to Hitlers actions - 60 years late."

"Holocaust survivors" is strange term for the people they take to court. Who forced the criminals to keep the moey for 60 years???

"Then, to my not-very-amusement the money won in court ends up financing public institutions in Israel - such as the Health sector."

And that is bad, because...?

Posted by: Andrew Brehm at July 14, 2007 01:09 AM

"You can not prove any theory concerning Israel by using USA statistics."

You didn't get his point.

He was challenging the claim that income inequality tells us someyhing about poverty.

Plase try to understand what income inequality means.

Posted by: Andrew Brehm at July 14, 2007 01:12 AM

Actually, this impressive economic performance has a lot to do with the worldwide rise in demand for military and homeland security related products since 9/11. The occupation provides Israel with special expertise in this area.

http://www.commondreams.org/archive/2007/06/15/1901

Posted by: noone at July 14, 2007 04:41 AM

So what exactly is so bad about being "poor" if one has a TV and access to medical care?

Could this possibly be the most stupid comment ever posted on the internet?

Posted by: mertel at July 14, 2007 04:57 AM

"The occupation provides Israel with special expertise in this area."

No, it doesn't You need completely different tools for an occupation. Remember that the US occupied West-Berlin for forty years.

But the constant terror attacks on Jews in the middle east does provide Israel with lots of experience in fighting such attacks.

Always watch the Jews! What happens to them will sooner or later happen to everyone.

Posted by: Andrew Brehm at July 14, 2007 06:14 AM

"Could this possibly be the most stupid comment ever posted on the internet?"

Don't be so modest. You might just as well claim the stupidest comment ever posted full stop with that non-answer.

Posted by: Andrew Brehm at July 14, 2007 06:17 AM

Well, Noah...considering the # of Russian oligarchs trying to buy their way into politics, I'm not surprised we see economic growth. However, the number of poor continues to rise. Perhaps we can blame that too on your friend Bibi.

Having worked in Israel. Having worked with Israelis in Israel. I find it truly is a miracle that the economy is functioning, let alone thriving.

Posted by: The Perpetual Refugee at July 14, 2007 06:19 AM

I always wondered why socialism, in the form of kibbutzes, took root in Israel. Was it just the easiest way to socialize immigrants coming to the new Israel? Perhaps they served the same functions as ghettos in the US. Though the term ghetto now has a negative connotation, they were quite effective at helping immigrants transition to the American culture. Do kibbutzes still exist?

Mertel and theCourtFool, I once sat next to a guy on an airplane that was from Cuba. He told me how he escaped (his word) by floating across the 90 miles of open ocean to Florida on a wooden door. The fact that you don't see a similar migration by Florida's poor to Cuba must tell you something. Maybe the poor are too busy with their Xboxes?

Posted by: Keith at July 14, 2007 06:21 AM

Mr B I do know what this statistics means. But No and No again . Income inequality in the USA may or may not tell about poverty in the USA, even on this, as can be seen above, there is no universal agreement. But no conclsions from these USA statistics can be used directly to infer about the Israeli conditions from Israeli statistics. The basic conditions are not the same. Just few examples: National health service in Israel, National aid to immigrants, Structure of housing ownership, Taxes (no inheritence taxes in Israel) and more can be given.

Posted by: Hazbani at July 14, 2007 06:26 AM

"However, the number of poor continues to rise."

Again, that doesn't mean anything as long as the standards used are not absolute.

"Perhaps we can blame that too on your friend Bibi."

Yes. But it still doesn't mean what you think it means.

Posted by: Andrew Brehm at July 14, 2007 06:53 AM

"Mr B I do know what this statistics means. But No and No again . Income inequality in the USA may or may not tell about poverty in the USA, even on this, as can be seen above, there is no universal agreement."

What is that supposed to mean? What does it matter if there is universal agreement??? It is simply NOT TRUE that income inequality has ANYTHING to do with actual poverty. The only connection is that liberals call a certain income inequality level a "poverty level".

"poverty" will always be on the rise if "poverty" is defined as a certain level of income inequality. But it doesn't tell us ANYTHING about living standards.

The income inequality in my household (my flat mate and myself) is much larger than the income inequality in the flat of two friends of mine. But we both have more money than those two people. If some economic improvement made my income much higher yet, my flatmate might fall under the 25% of our median income and be officially "poor" (while neither of our two friends would be poor according to those same standards), even though we would still have more money than the other two guys individually and much more on average.

If one hugely rich guy in Israel would suddenly make 1000 times as much as before with no other changes, Israel's poverty line would rise and hence there would be more "poor" people according to those useless stats, even though nobody's living standard has decreased and even though the average wealth has just increased.

Again, income inequality is NOT and never has been an indicator of poverty and this is NOT a question of opinion.

"But no conclusions from these USA statistics can be used directly to infer about the Israeli conditions from Israeli statistics."

And again, the point was not to say anything about Israel but to explain that income inequality doesn't tell us anything about poverty.

Let me make this very clear: I do NOT doubt that income inequality is higher in Israel now than before Bibi's reforms. I never have doubted that, probably never will. I am ABSOLUTELY convinced that income inequality is higher now than before. Does everybody get this? Good. But that was never the point of Noah's article nor of any of the comments here. The question is whether the reforms have helped the economy (they have) and improved the lives of everyone in Israel (or the large majority). Income inequality has NOTHING to do with that, because the difference in income between two people now and before a certain point does NOT tell you how much better or worse off each of them is after the point in time.

"The basic conditions are not the same. Just few examples: National health service in Israel, National aid to immigrants, Structure of housing ownership, Taxes (no inheritence taxes in Israel) and more can be given."

Ok, go on, give the examples. How have these things changed since or because of Bibi and the economic reforms?

Posted by: Andrew Brehm at July 14, 2007 07:06 AM

Keith,

About the Kibbutzes, you got it backwards.
The founders of the Kibbutzes, in the beginning of the 20th century were idealist immigrants from Russia with a strong socialist background. So they set out to build a Utopian society of socialism in their Kibbutzes, much the same as Russian revolutionaries later did in Russia. The difference of course, that in Israel it worked (for a while), and of course the Kibbutzes didn't
turn into a dictatorship, like Russia.
But with the advent of capitalization and globalization, Kibbutzes couldn't economically compete in the long run. Of course many Kibbutzes exist today, but their socialist character is very played down today, and there's a lot of privatization going on. Some Kibbutzes are very rich and have factories, some are very poor and have debts...

Posted by: liamalpha at July 14, 2007 08:04 AM

I'm not so sure about Israel, but I've lived in South America and Africa for 12 years. Western liberals don't know the meaning of poverty if they think the fat lazy slobs I see at the grocery store stocking up on Twinkies and Doritos are poor. They aren't. Being "poor" in the West means they are in the lower income bracket. That's "poor". Yet all their physical needs are met, and their standard of living is equal to or higher than most middle class people living in most parts of the world. The "poor" in America suffer from a poverty of spirit, not a physical one. If you don't know what that means, then I'm guessing you're a Liberal. And throwing more money at them isn't going to make any difference about that. I don't lose one wink of sleep at the sob stories I hear about the "poor" here in America.

Posted by: Carlos at July 14, 2007 08:11 AM

"The difference of course, that in Israel it worked"

Ephraim Kishon once wrote, and I paraphrase:

"Kibbutzim are collective farms that work without the threat of prison or a secret police. The Soviet Union has repeatedly protested their existence."

:-)

Posted by: Andrew Brehm at July 14, 2007 08:14 AM

"Western liberals don't know the meaning of poverty if they think the fat lazy slobs I see at the grocery store stocking up on Twinkies and Doritos are poor. They aren't."

Exactly.

If the liberals had a point, they wouldn't have to call these people "poor". They could just call them "people with a higher income than 90% of the world population" and see if that still sounds as if it was a major problem that must be adressed immediately.

Posted by: Andrew Brehm at July 14, 2007 08:17 AM

Hi Andrew,

I didn't remember that quote from Kishon. I used to read him a lot when I was younger.
Regarding the Tel Aviv Stock Exchange: I'm wondering
if what we see is financial robustness or a bubble. Stock exchanges have been known to rise without correlation to the actual reality, until one day they simply collapse.

Posted by: liamalpha at July 14, 2007 09:52 AM

...if what we see is financial robustness or a bubble...

Great call, llamalpha. Stocks and commodities are much more familiar to me than the politics I come here to learn about. Financial robustness is a squishy term when you pull back the covers. A bubble is easier to decipher, in that it has telltale symptoms of skyrocketing prices and bewildering 'deals' involving intentionally inscrutable debt structuring. Both with public and private monies.

But the financial robustness you allude to is closely tied to ample cashflows and credit expansion. The globe is awash in 'cash' which has to find a home. The mid 90's to now it's been all about finance, hence the bubbles in stocks, bonds. But the last 4 or 5 years that excess credit expansion has found its way into physical assets...houses, natural resources, precious metals. Of course, it's much more complex when you consider fiat currencies, but this is a very generalized way of explaining much of the hyper growth of stock markets around the world. And yes, there will be a regression to the mean at some point.

Posted by: allan at July 14, 2007 10:30 AM

"I'm wondering if what we see is financial robustness or a bubble."

Intel produce in Israel. Warren Buffet invests. Money is flowing into Israel.

This is not a bubble.

Posted by: Andrew Brehm at July 14, 2007 10:34 AM

"Actually, this impressive economic performance has a lot to do with the worldwide rise in demand for military and homeland security related products since 9/11."

This is a totally untrue, ignorant statement. I worked in Israeli venture capital. The vast majority of the Israeli high tech industry is in microelectronics and communications - semiconductors, enterprise software, internet software, wireless technology, etc. Israel obviously has a military industrial complex, but this is not part of the new high tech economy, and accounts for almost none of the billions of dollars of venture capital invested every year in Israel.

Noone (aptly named) simply wants to drag the discussion away from Israel's achievements to the occupation - the only aspect of Israel that interests him.

Posted by: MarkC at July 14, 2007 12:30 PM

"The vast majority of the Israeli high tech industry is in microelectronics and communications - semiconductors, enterprise software, internet software, wireless technology, etc."

I am convinced that many people who don't know that do however use PCs or Macs using Pentium IV or Core CPUs. :-)

Posted by: Andrew Brehm at July 14, 2007 05:01 PM

Zionism was a socialist idea, not too different from the "Christian Socialism" found in Acts (of the Apostles after Jesus was resurrected and left).

Socialism is reasonable at wealth redistribution, but lousy at wealth creation (long term). So far in human history, capitalism is the best wealth creation system (especially if you add peaceful, voluntary agreement). Where are the "Imagine" like socialist communes of the 60s / 70s? Gone.

Noah, can you talk about LAND ownership? I understood that the Israeli state owns some 90%. I also understood that, pre-1948 Declaration, Zionists had bought some 8-10% of the land from Arab / Turk owners. I would have guessed that Israel would need land reform, and privatization, before a big stock boom. But maybe not -- land ownership has never been less important to wealth creation than in the internet-information age.

In Slovakia, we have been buying avocados from Israel for years, for .60-1.50 (big range! This includes $ exchange rate reductions). Today I bought 5 from Kenya, for 0.20 each. If the Palestinians are too stupid / hate-filled to produce goods for trade, maybe black Africans can copy Israel's success.

At least, those not suffering Arab genocide (like Darfur).

Posted by: Tom Grey - Liberty Dad at July 14, 2007 06:17 PM

"land ownership has never been less important to wealth creation than in the internet-information age."

Land ownership is not important for wealth creation. In fact, land ownership can only have a negative effect on wealth creation, namely when all the available land is owned and rents increase.

An economy that pays rents to a government instead of income tax certainly produces more than an economy that pays rents to land owners and income tax to the government.

Ideally, for wealth creation, land would be available for free. Second best is when all the land is used for production. But land ownership makes it possible for owners to leave land unused and wait for a profit.

If anybody who needs land to produce can rent land from the government for market prices, all the land will always be available on the market (since no owner can decide not to sell or or rent out) and the state will have an income (the rents) that can be used to replace or counteract any taxes on production (and hence if production is not heavily taxed, people will produce more).

The idea that land ownership is important or necessary for wealth creation is often repeated, but I have never seen an explanation for why it is better (for the economy) than renting land from a government.

Posted by: Andrew Brehm at July 14, 2007 06:51 PM

Andrew Brehm makes an incorrect statement:

The infamous "poverty" line is, I believe, defined as 25% of the median income. It shows not poverty but income inequality.

...and bases the next dozen posts on that false assumption.

The US poverty line is defined in a dollar amount based essentially on what a household needs to spend on food.
http://www.census.gov/hhes/www/poverty/povdef.html#2

It took me all of 0.3 seconds to find that link.

The current poverty line in the US for a single person household is about $10,000 before tax.

It would be helpful if we could try and stick to the facts before posting too much hyperbole.

Posted by: mertel at July 14, 2007 08:38 PM

The article demonstrates nothing about the success of the Israeli economy, standard of living or much of anything commented on here. It merely demonstrates that the stock market has risen. So what? Without clearly providing statistics that prove that the rise is due to fundementals, such as increased sales, success overseas or any other information about israeli businesses there is no way to discern whether the economy is truly booming or whether there is a stock bubble.

Mertel above - thank you SO much for correcting Mr. Brehm about the poverty line. It is not an arbitrary line that rises every time some billionaire becomes a little richer. It is set to the absolute minimum required for people to provide themselves with basic food, shelter and clothing.
The US government finds that approximately 35 MILLION people in the US go hungry every year. These aren't fatties in the supermarket. These are people choosing between food and shelter. And many of them work full time.

Oh and Mr. Brehm - 50 Quid for a prescription? Sorry - in the UK sounds like the government negotiated decent prices with big pharm. No luck in the US. Some elderly people have prescription costs in the thousands a month. Non generic antibiotics (if required for a specific ailment) can cost $350 for 10 pills. Bit tough on $10,000 a year. The number 1 cause of bancruptcy in the US isn't guys buying BMW's, its unexpected medical bills.

Mr. Smith - poor have "free medical care"? Really?
Hospitals are required only to treat immediate injuries. They don't provide real medical care, just slap on a bandage and send people on their way. Of course, this is expensive, and because the US just lets the hospitals foot the bill, in really poor areas the hospitals are closing altogether. So, nowhere to go at all.

Sure, it is easy to compare to the poor in Sudan, or Bangladesh or one of a hundred other countries.

But is that really the standard you want to set?

Posted by: lisoosh at July 14, 2007 09:10 PM

"I strongly urge you to watch the very much hated Micheal Moores movie Sicko."

I have not seen "Sicko" but something tells me that movie had to be named "American Dumb Sucker or Another Useful Idiot".

Just because Moore was shown couple of Potamkin villages, interviewed few people under ever watchful eye of Cuban KGB and fed propaganda crap from Cuban officials does not make it a documentary masterpiece.

Leo

Former Soviet Citizen and happy to be former.

Posted by: leo at July 14, 2007 10:32 PM

Mertel,
If you googled a bit more you would find statistics from the USDA saying that basically calories have never been cheaper and that Americans are eating more than ever. Here is what I found:
http://answers.google.com/answers/main?cmd=threadview&id=248719

Among the nuggets of information:
"Calorie consumption per capita increased 20 percent between 1982 and
2000"

So even by your newly found definition of poverty it looks like Americans are doing better than ever. In fact, they are doing too well because so many of us are fat. This must make you happy because you have another pseudo-crisis to fret about.

Posted by: Keith at July 14, 2007 11:19 PM

"The US government finds that approximately 35 MILLION people in the US go hungry every year. These aren't fatties in the supermarket. These are people choosing between food and shelter. And many of them work full time"

Bullshit. There is no "left", only bullshit. If someone in the US has a "need" for food they pay for it with food stamps. Nobody is starving, the homeless reject food if you offer it to them. It's all bullshit from start to finish.

Posted by: mikek at July 14, 2007 11:27 PM

Lisoosh,
The 35 million number you quoted were Weight Watchers participants :) Seriously though, please send a link to support that number; it must be some government agency making stuff up to get more funding. Even the lowest of the low, the mentally unstable homeless, have enough to eat.
As far as your claims about healthcare, I don't think any country has it worked out. I used to live in Buffalo, NY near the Canadian border and many of the doctors in the hospitals got their training in Canada but worked across the border because they made more money and liked the system. Often they were treating Canadian patients that would come to the US and pay out of pocket because they would get faster treatment.

A lot of critics criticize the US healthcare system because it is capitalistic but it isn't; there is plenty of government involvement. It isn't socialized either. It is a mix that clearly needs reform. My preferrence would be a system based on user-directed health savings accounts.

Posted by: Keith at July 14, 2007 11:35 PM

Thank you Mertel. Again and last time, povery in the USA is not poverty in any other cultural-economic system. The system that define poverty by Food, shelter, clothing differ from the one that add to this health and/or education. If in any time in a given country people have more food (calories alone are not food)but less medical care and education than in the past they are poorer.

Posted by: Hazbani at July 14, 2007 11:54 PM

I suspect Michael Smith's statistics came from Myths of Rich and Poor

Posted by: Lorenzo aka erudito at July 15, 2007 02:57 AM

First, if someone wants to check up on Noah Pollak, he could read the business sections of the JPost and HaArets, both available in English on line. Israeli firms are selling plenty abroad, and I'm not talking about military items which are often or usually NOT reported. Further, Israel was selling military equipment years before 9-11.

Second, Somebody claimed that the economy flopped when Netanyahu became PM. When he became PM [July 1996], we were weeping over our dead in terrorist attacks, thanx but no thanx to shimon peres. Economically speaking, when the Labor govt of Rabin-Peres-Beilin obtained the horrendous Oslo accords of 1993 [thanx to bill clinton], they wanted to show [as in "make a show"] that the accords were conducive to prosperity. So they pumped up the stock market, which couldn't stand being inflated for too long. The market flopped and many folks lost big money, including a high official that a close relative of mine worked for. Bibi stabilized the economy in the late 1990s and he had to be called in again in 2003 [or was it 2002?] to rescue the economy on account of damage done by the war and irresponsible Labor party governance under ehud barak, etc. It is true that many people who were otherwise Likud voters voted against Bibi in 2006. This was foolish, because most people getting entitlements/subsidies [kitsvot] lost very little money on most kitsvot. Further, olmert too was part of the same cabinet as Bibi when Bibi was finance minister. Thus, olmert too [& sharon] were responsible for the cuts. But then sharon had the aura of The Man on the White Horse. Many supported him for that reason. Unfortunately, this aura carried over to the totally worthless olmert. That's why olmert's party of crooks won more votes than any other in the March 2006 election, although his gang [Qadimah] still got less than 1/4 of the vote [29 out of 120 Knesset seats].
Prices went up unfortunately as the economic situation improved with the petering out of the PLO/Fatah/Hamas terrorist war against us. One reason it improved is that people were no longer so afraid to go out of their homes. Bibi's party, the Likud, is now pressing for restrictions on the banks and the excessive fees that they collect. The abuses by local big business have flourished since Bibi left the govt in the middle of 2005, two years ago.

Posted by: Eliyahu at July 15, 2007 03:08 AM

As for Bibi - wasn't the Israeli economy booming until just about the moment he became prime minister? And from that moment on didn't the boom end and the economy implode?

Mertel, the boom was up to 2001, then the Internet bubble burst and Israel went into a 2-3 year recession. This was heightened by the 2nd Intifada.

But you're right about the Internet's most stupid ever comment.

Posted by: jonorose at July 15, 2007 05:06 AM

"Noone (aptly named) simply wants to drag the discussion away from Israel's achievements to the occupation - the only aspect of Israel that interests him."

The article I listed bears directly on the topic under discussion and the occupation is central to Klein's explanatory argument. Here is is again if you want to take issue with any of it.

Gaza: Not Just a Prison, a Laboratory
http://nologo.org/newsite/detaild.php?ID=528

Posted by: Noone at July 15, 2007 07:26 AM

The statistics I quoted on poverty are from this study: http://www.heritage.org/Research/Welfare/bg1713.cfm

In the last 40 years, the U.S. Federal Government has spent some 6.6 trillion dollars on various anti-poverty programs.

This massive spending began in the late 1960s and has been rising steadily ever since. In the decade prior to that, the poverty rate and the number of people below the poverty line were both falling steadily. In the decades after that spending began, the poverty rate stopped falling and the number of people below the poverty line increased significantly. See the chart here: http://en.wikipedia.org/wiki/Image:Poverty_59_to_05.png

Posted by: Michael Smith at July 15, 2007 08:16 AM

"Andrew Brehm makes an incorrect statement: The infamous "poverty" line is, I believe, defined as 25% of the median income. It shows not poverty but income inequality."

Prove that it is incorrect that I believe that!

"...and bases the next dozen posts on that false assumption."

The assumption is not false. The poverty line is indeed defined as 25% of the median income. You can verify that in Wikipedia, if you like.

"The US poverty line is defined in a dollar amount based essentially on what a household needs to spend on food."

No. The US poverty line is defined in a dollar amount that is a percentage of the median income.

"It took me all of 0.3 seconds to find that link."

Very good. Now did you read it

"The current poverty line in the US for a single person household is about $10,000 before tax."

And the median income in the US is US$46,000 per household. But I understand the US government uses several thresholds, which depends on several factors, hence the numbers are not exactly 25% of the median income. For example, it appears that the US poverty line is set to a little bit more than those 25%.

But pray tell, when did I claim that the poverty line on the US is not US$10,000 before tax? Which of my claims exactly are you contradicting?

"It would be helpful if we could try and stick to the facts before posting too much hyperbole."

Very good. Please stick to that principle.

Anyway:

http://en.wikipedia.org/wiki/Median_income

http://en.wikipedia.org/wiki/Poverty_line

"A measure of relative poverty defines "poverty" as being below some relative poverty threshold. An example is when poverty is defined as households who earn less than 25% of the median income is a measure of relative poverty."

You are right that in the US the number is not exactly 25%, but it's close. The basic facts, which you want us to stick to, is that the "poor" in America do own TVs and cars and that their "poverty" is indeed measures relative to the very high median income in the US.

Posted by: Andrew Brehm at July 15, 2007 09:24 AM

"Mertel above - thank you SO much for correcting Mr. Brehm about the poverty line. It is not an arbitrary line that rises every time some billionaire becomes a little richer. It is set to the absolute minimum required for people to provide themselves with basic food, shelter and clothing."

He didn't correct me.

I am sick and tried of this. Everyone can look up what a poverty line is on Wikipedia and see for themselves. Whether every country in the world implements EXACTLY those numbers is another question. The point was (and is) that poverty, when measured relatively, only tells us about income inequality, not actual poverty.

Mertel has a very long explanation and keeps telling me that I was wrong in saying that the poverty line is 25% of the median income and then finally quotes a number that is approximately 25% of the median income (US$9800 is 21% of US$48000). It's ridiculous.

Can anybody who disagrees with me please tell me exactly why he thinks that owning a car and TV constitutes "poverty" and whether those considered "poor" in Israel are nor worse off or not than before Bibi's reforms?

Whether the number is 25% (as per Wikipedia) or approximately 21% doesn't really matter, I think.

And yes, the poverty thresholds do rise with the economy. If you want to make the point that the poor in the US have as little as the poor in the US in, say, the 1930s, then please give examples.

As for prescriptions, I have no idea how Israel's health insurance system works. I also don't know how Israel measures the poverty line. But I wouldn't be surprised if Israel used the 25% of median income yardstick.

Posted by: Andrew Brehm at July 15, 2007 09:35 AM

BTW, it appears that in Israel the poverty line is defined as 50% of the median income.

I assume it will take 3 seconds to find a link. (Why has nobody bothered to check???)

Now, can anybody tell me how 50% of the median income is NOT dependent on how much the median income is?

Posted by: Andrew Brehm at July 15, 2007 09:40 AM

Michael's numbers can be found easily on the Web, they are apparently from the Census.

Here's one source:

http://www.jewishworldreview.com/cols/williams011404.asp

I own neither car nor television (cannot afford the first, do not want the second), but I still cannot see why it is stupid to ask what's so bad about "poverty" if the "poor" own both those things.

To me it sounds like claiming that EVERYBODY in the US is rich, including those few who cannot even afford a TV, and that call stupid those who ask why it is so great being "rich" if being "rich" does not mean that one can afford a TV.

The term "poor" simply doesn't mean anything if it is used to describe people who own cars and live in bigger flats than I.

If "poor" includes those people than any statement about the "poor" is useless.

I also don't see why it is useful to group those who genuinely have too little to live with cart and television set owners who obviously have so much more than most people on this planet.

To me "poor" are those who have neither car nor television, who do not receive free medial care in emergencies, who do not know if and where they get their next meal, and who almost certainly do not whine about their lot on the Internet.

A better term for those American "poor" who have cars and TVs and DVD players is "phenomenally rich". "Poor" does not quite conjure up the picture of a fat guy watching Football. At least not for me.

Posted by: Andrew Brehm at July 15, 2007 09:53 AM

In the majority of the world, the mere ownership of a car (let alone two) is a sign of wealth. Not to mention air conditioning, cable TV in 2-3 rooms, plenty of money left over for booze and drugs too! But in the West, they are "poor". LOL. Perhaps poor in comparison to the limousine Liberals who purport to speak for them from the comfort of their Manhattan townhouses and 30,000 thousand square foot mansions in North Carolina, but not objectively poor. In the world outside our bubble of prosperity here in the West, the REAL poor slowly die from starvation and related illnesses. They don't die of complications from obesity-- i.e., diabetes, heart disease-- like our "poor" here in the West so. Mkay? Our poor die from stupidity, not hunger or cold. So thanks for playing limousine Libs. Nobody takes you seriously anymore.

Posted by: Carlos at July 15, 2007 10:16 AM

"In the majority of the world, the mere ownership of a car (let alone two) is a sign of wealth."

It is a sign of wealth everywhere, that is why liberals define "poverty" as a percentage of median income (even if they don't admit it).

As I said above, in Israel "poverty" is defined as 50% of the median income, hence if the median income increases, there are more "poor" people.

This fact is then used by liberals to claim that "poverty" is increasing when in fact it is merely income inequality that is increasing.

If the liberals had a point, they wouldn't have to associate that state with "poverty". They could just claim that it is unacceptable for someone to own only two cars and see if that still makes as good a "point" as claiming that it is unacceptable for someone to be "poor".

Posted by: Andrew Brehm at July 15, 2007 11:43 AM

"Some of them survived the Nazi camps, and they now live in great poverty."

Despite several requests you have still not substantiated that claim.

Define "great poverty" and tell me how this has become worse since Bibi's reforms.

Posted by: Andrew Brehm at July 15, 2007 11:44 AM

Point taken Jonorose. I may have overstated it a bit, but my memory was that the economic downturn started during Netanyahu's reign, and was part of the reason he was booted out of power. From the NYT in May 1999, 1 week before the election Bibi lost (and before the 2nd intifada):

Tax receipts for the year's first quarter were down 7 percent from last year's, and new forecasts for 1999 have only made budget officials gloomier.

Economic growth is expected to slow to 1.5 percent, down from an anemic 2.2 percent in 1998, according to Bank Hapoalim, a leading commercial bank. Export income is sinking, with no offsetting foreign investment, swelling the current account deficit from $2.3 billion last year to a projected $3 billion in 1999.

But the most crucial economic number in this campaign is the unemployment rate. At 8.7 percent, it is already at its highest level in a generation. And it will rise to 9 percent later this year, the bank's economic department predicted, regardless of which party takes power in June.

Posted by: mertel at July 15, 2007 01:01 PM

And the many were already predicting that his policies would result in a recession:

NYT Jan 21 1999
Yet with unemployment rising to nearly 9 percent last year and per-capita income declining four-tenths of a percent, to $17,178, politicians across the spectrum are pushing hard for cheaper credit and more state spending. The alternative, they say, with global markets wobbling and local political uncertainties discouraging foreign investment, could be a deep and prolonged recession.

Posted by: mertel at July 15, 2007 01:09 PM

I rate this article as pablum and inferior reporting. That doesn't even include my opinion that its conclusions are intellectually false. More importantly, it's lazy, slipshod intellect. Noah takes Israel's economic growth over the past four years and equates them to Netanyahu's "market reforms" - which are not described in detail anywhere, including his links - throws in a bunch of ideologism about drowning in socialism, and says, "It must be true, because I said so". There's no discussion of exactly what it was done, no causal mechanisms, no discussion or refutation of alternatives.

"Economic Growth" usually means overall or total GDP growth, which quite frankly bears only a tangential relationship to whether or not the guy on the street is getting richer or poorer. And yes, that always has been, and always will be, a relative measure as well as an absolute one.

As the US has demonstrated quite well, you can get a cheap, fake GDP bump for a short time by cutting taxes - only to suffer over the next several decades as whatever you gutted to grant those tax cuts - health care, transportation, publicly-funded research, natural resource protection, the courts, law enforcement, falls apart, and you have to pay an awful lot of money to get it working again.

Prostituting yourself for foreign investors is a delicate game that goes quite badly if you give too much away - ask Argentina.

Posted by: glasnost at July 15, 2007 01:56 PM

As the US has demonstrated quite well, you can get a cheap, fake GDP bump for a short time by cutting taxes - only to suffer over the next several decades as whatever you gutted to grant those tax cuts - health care, transportation, publicly-funded research, natural resource protection, the courts, law enforcement, falls apart, and you have to pay an awful lot of money to get it working again.

Nonsense and baloney. Nothing here in the United States has "fallen apart" as a result of tax cuts.

The biggest tax cut we ever implemented was done when Ronald Reagan lowered the top tax rate from 72% down to 28%. By the time he left office 8 years later, federal income tax reciepts had doubled, repeat doubled.

Unfortunately, Congress increased non-defense spending by an even greater amount than this doubling of tax revenues, resulting in budget deficits. But nothing in America has "fallen apart" since that tax cut.

Posted by: Michael Smith at July 15, 2007 02:26 PM

reminds me of the Life of Brian

nothing in America has "fallen apart" since that tax cut

....except maybe the health system...

...and the education system...

...and the roads...

...and homeland security...

but aside from that...

Posted by: mertel at July 15, 2007 02:41 PM

Mertel, what planet do you live on?

The US government is spending vastly more on the health system, the education system, roads and homeland security than ever before. VASTLY MORE.

To claim that these functions have "fallen apart" because of lack of funding due to tax cuts is simply and utterly preposterous.

Here are the increases in Federal Government spending from fiscal 2000 to 2007:

Health & Medicare: Has gone from $351.6 billion to $672.9 billion, an increase of 91.4% .

Education: Has gone from $53.8 billion to $87.6 billion, an increase of 62.9%.

Transportation (Roads): Has gone from $46.9 billion to $76.3 billion, an increase of 67.1%.

Homeland Security (Including National defense) has increased from $294.5 billion to $527.4 billion, an increase of 79.1%

And this is just Federal Government expenditures. Expenditures by state governments have increased as well.

Whatever problems exist in these areas, they certainly to tax-cut induced spending cuts.

There is not a shred of evidence to support your and glasnost’s contentions.

Life of Brian indeed.

Posted by: Michael Smith at July 15, 2007 04:30 PM

Here is a link to the source of the spending numbers above:
http://www.whitehouse.gov/omb/budget/fy2007/pdf/hist.pdf

Posted by: Michael Smith at July 15, 2007 04:40 PM

Correction: the third to last sentence of my prior post should read: Whatever problems exist in these areas, they certainly have nothing to do with tax-cut induced spending cuts

Posted by: Michael Smith at July 15, 2007 04:42 PM

Andrew Brehm -
Wiki isn't an authority. It is written by anonymous Joe 6-packs.
The US standard for the poverty line is 3 times the cost of a very basic food budget - based on the idea that poorer people spend a greater proportion of their income on food than those well off.
The fact that it is 25% of the median imcome (or 21% or maybe 19% next year) is a byproduct of income differential which is completely irrelevant.
Mertel gave you the direct link. Choosing to ignore it and focus on wiki isn't making an argument, it's building a straw man.

Poverty level in the US is around $10,000. As you appear to be a Brit, perhaps you are not familiar with US costs of living.

A forty hour workweek at minimum wage will gross around $11,000 a year. Take off $1000 for social security payments and local taxes - gives $10,000 a year, $833 a month net.

Cost of a rental room is around $450 in this area (actually $550 but I am being generous). A cheap studio apartment would be $700..
Transportation is tricky, the US is painfully short of public transportation but lets say $100 a month. If a car is necessary, car insurance here (liability) would be $50 a month. Gas is $3 a gallon. A used car can be had for $500 but maintenance would be expensive.
If a job provides health insurance, the cost is generally $150 a month for a single. $650 a month for a family. Privately acquired health insurance $2000 a month for a family.
(Friend without insurance (well off) had to take son to ER with a broken arm. Bill came to $13,000 - be gratefull for the National Health Service)
Utilities can run $50 - $100 a month.
Food.
No phone or anything.

Doesn't leave a lot, and that is a single person working a full week.

Posted by: lisoosh at July 15, 2007 05:09 PM

As the US has demonstrated quite well, you can get a cheap, fake GDP bump for a short time by cutting taxes - only to suffer over the next several decades as whatever you gutted to grant those tax cuts - health care, transportation, publicly-funded research, natural resource protection, the courts, law enforcement, falls apart, and you have to pay an awful lot of money to get it working again.

What's intellectually false is the premise that cutting taxes results in gutting of programs. More than intellectually false, it's the kind of simpleminded platitude we've all come to expect from Liberals. It's a FACT that Bush's tax cuts have resulted in higher tax revenues. So if programs have been gutted (they haven't), it's not because of the tax cuts

Under Bush, lower taxes, higher revenues:

"Without so much as a single penny in additional taxes, revenue for the first 8 month of this year alone rose by about 13 per cent. Since the 2003 June cuts revenues have been racing ahead at double-digit rates. It looks like President Bush is running ahead of schedule while his haters in the media try to obliterate any good economic news."

Seems to me the only one spouting the pablum is glasnost.

Posted by: Carlos at July 15, 2007 05:31 PM

http://www.brookesnews.com/061707reaganellis.html

Posted by: Carlos at July 15, 2007 05:33 PM

Keith -
Link on numbers concerning food insecurity in the US -

www.ers.usda.gov/publications/err11/

Based on the number of food insecure households, approximately 34million in the US go hungry at least some of the time each year. This percentage is the highest of the Western industrialized nations.

Posted by: lisoosh at July 15, 2007 05:34 PM

About poverty levels in the US, this is quite informative

Posted by: Bruno Mota at July 15, 2007 05:51 PM

If someone makes minimum wage they need to find a new job. I could easily find them a shitty job that paid ten bucks an hour to start if they are willing to work.

Posted by: mikek at July 15, 2007 07:22 PM

Thanks Lisoosh,
I followed your first link to the usda site and started reading this report: Household Food Security in the United States, 2004 (http://www.ers.usda.gov/publications/err11/)

You said, “The US government finds that approximately 35 MILLION people in the US go hungry every year.”
I found: Eighty-eight percent of U.S. households were food secure throughout the entire year 2004. “Food secure” means that all household members had access at all times to enough food for an active, healthy life. The
remaining 13.5 million U.S. households (11.9 percent of all households) were food insecure at some time during the year.”
(p. 3)

13.5 million households equals about 35 million people. But what is the definition of hungry? They just have to be food insecure during a few meal times throughout the whole year. But hungry is still hungry right? Not really.
“All households classified as food insecure with hunger have reported multiple indications of reduced food intake and disrupted eating patterns due to inadequate resources for food, although not all have directly reported that household members were hungry.” (p. 4) Hmm, not hungry?

But still, not having a balanced meal once or twice a year is a bad thing right? The not-well balanced meal eaters must be banging on the doors of the food pantries and getting all the food stamps they can right?

Not so much. If you follow some of the references they have in the paper you will see that of the big three programs: Food stamps, school lunches, WIC only 50.3 percent of those eligible actually used any of the three programs. (Table 13)
It seems people aren’t hungry enough to really bother or maybe they just don’t know about these programs.

It turns out even if they know, they don’t care: “Nevertheless, even among food-insecure households that knew there was a food pantry in their community, only 31 percent availed themselves of it. “ (p. 7) Is this really a crisis?

What about the emergency kitchens? These places serve food rather than give packaged goods and they must be swamped right?
“Only small proportions (from 1 to 3 percent) of households that participated in the three largest Federal food assistance programs reported eating at an emergency kitchen during the 12 months prior to the survey.”

These are just the statistics in the big three programs. There are many, many other programs:
Child and Adult Care Food Program (CACFP)
Commodity Supplemental Food Program (CSFP)
Farmers' Market Nutrition Program (FMNP)
Eat Smart Play Hard
Food Distribution Program on Indian Reservations (FDPIR)
Food Assistance for Disaster Relief
School Breakfast Program (SBP)
Senior Farmers' Market Nutrition Program (SFMNP)
Special Milk Program (SMP)
State Processing Program
Summer Food Service Program (SFSP)
The Emergency Food Assistance Program (TEFAP)

This doesn’t even take into account the many state and local programs.

It is obvious that every once in a while a small percentage of the US population misses a meal or doesn’t have one that is well-balanced. It doesn’t bother them enough to even take advantage of the main programs not to mention the many small programs that exist. This is not a crisis, it isn’t even worth writing about. If my wife wasn’t glaring at me for bothering with this, I would include statistics about how many people are overweight. This would refute once and for all the idea that Americans go hungry.

Posted by: Keith at July 15, 2007 07:47 PM

Can't afford a TV in America?

Nonsense. People throw out perfectly good TVs all the time. I haven't paid for a TV in years. We have so many we have started throwing them out too!

Computers are free too. We got one last year when my son needed one.

I have to force my mate to keep going when we see "goods" beside the road.

BTW I'm considered poverty level for my household size. Our old car is just about totally clapped out. We got a newer one with my mate's meager tax refund check.

Poverty in America? 100 years ago Kings didn't have it so good.

Posted by: M. Simon at July 15, 2007 09:45 PM

glastnost,

America in its early days (up until around 1900 I think) was a capital importer. That is because we had more opportunities for growth than the local capital could provide.

There is nothing wrong with investment by foreigners. It is one of the reasons America is so rich.

I'm in agreement with Mohammed Ali. I'm glad my ancestors got on the boat. It helped our family avoid all that European unpleasantness from 1939 to '45. Although my father and my uncle served in that war.

Posted by: M. Simon at July 15, 2007 10:12 PM

Did I mention that my son got a full scholarship to go to the University of Chicago for four years? Graduated with honors. We are quite proud of him. John D. Rockefeller's money. Even vast wealth doesn't stay bottled up for long.

No one who would really benefit from college in America goes without.

BTW he is in Russia this summer teaching Russian kids English. On his own dime. Did I mention we are very proud of him?

Crummy American school system? Maybe. He got his education in the public schools. Now I would have to agree that if a kid is not interested in getting an education (or is incapable) America doesn't do well. However, if you consider it as a farm system that finds potential top producers and educates them it works pretty well.

Even outside the system it works pretty well. I'm an aerospace engineer. No degree. Nada. Zip. Although I'm proud to say I flunked out of U. Chicago in my first year. It turns out I liked girls more than studying (not a bad decision and Joan - where ever you are - thanks!) . In any case I went to libraries and learned. Then I got jobs where I could put what I learned to use. I made a habit of studying electronics 3 to 4 hours [something that actually started at age 10 - I had my first ham license by age 13] a night. It has never stopped. As my abilities increased so did the level of jobs I had.

America is truly a meritocracy and you can rise to your level no matter your circumstances if you are motivated. If you are not motivated nothing is going to help.

Posted by: M. Simon at July 15, 2007 10:41 PM

Noone;

Well, you certainly show your true colors by citing to that particular piece of toxic waste. If you want some actual data on the Israeli high tech phenomenon, try the Israel venture association website: www.iva.com. If you want to continue spouting anti-Israel venom, continue with the same sources.

Posted by: MarkC at July 15, 2007 10:47 PM

"Wiki isn't an authority. It is written by anonymous Joe 6-packs"

That doesn't mean that what it says isn't true. I knew about the 25% of median income before. I merely gave Wiki as a source

because it's the most convenient to find.

Disclaiming Wikipedia without proving it wrong just based on who might have written it is not a useful argument. It's rather

fallacious, I think.

"The US standard for the poverty line is 3 times the cost of a very basic food budget - based on the idea that poorer people

spend a greater proportion of their income on food than those well off."

And the number happens to be 21% of the median income. Either way, in general "poverty" is defined as 25% of median income and

since the discussion was about Israel, not the US, that's the number I used. It turned out that in Israel it's actually 50% of

the median income but that doesn't change the basic point, namely that the poverty line rises with the economy.

"The fact that it is 25% of the median imcome (or 21% or maybe 19% next year) is a byproduct of income differential which is

completely irrelevant."

"Mertel gave you the direct link. Choosing to ignore it and focus on wiki isn't making an argument, it's building a straw

man."

Where do you think I got the 21% number from? I didn't choose to ignore it, I read it. But I do believe that he never read it

because it does say, among other things, that the poverty line is not just based on needs.

Mertel gave a link about the poverty line in the US, not the poverty line in general (which is more likely to apply to

Israel). I believe most European countries use the standard definition.

"Poverty level in the US is around $10,000. As you appear to be a Brit, perhaps you are not familiar with US costs of living."

I know that most things are cheaper in the US than they are here (in Ireland) or in Britain.

"A forty hour workweek at minimum wage will gross around $11,000 a year. Take off $1000 for social security payments and local

taxes - gives $10,000 a year, $833 a month net."

Very good.

"Cost of a rental room is around $450 in this area (actually $550 but I am being generous). A cheap studio apartment would be

$700.."

That's a bit cheaper than here. But then Dublin is expensive. Same numbers in Euros, i.e. 20% more.

"Transportation is tricky, the US is painfully short of public transportation but lets say $100 a month. If a car is

necessary, car insurance here (liability) would be $50 a month. Gas is $3 a gallon. A used car can be had for $500 but

maintenance would be expensive."

Most minimum wage workers here work in walking range of their flats.

"If a job provides health insurance, the cost is generally $150 a month for a single. $650 a month for a family. Privately

acquired health insurance $2000 a month for a family."

Health insurance is cheaper here, at least if you are poor, as it is heavily subsidised by taxes.

"(Friend without insurance (well off) had to take son to ER with a broken arm. Bill came to $13,000 - be gratefull for the

National Health Service)"

13,000 for a broken arm seems a bit steep.

"Utilities can run $50 - $100 a month."

Yes, that would be more expensive here.

"Food."

Food is cheaper in the US than here.

"No phone or anything."

Most poor people I know have mobile phones.

Either way, given that the statistics about TV an car ownership seems also true, perhaps you are still making a mistake there.

How many of those "poor" (again, the life you describe is not what I would call "poor"; my flatmate is from a third world

country and told me stories of poverty) are really on their own (and do not live with their parents)?

Let me tell you something. My flat mate is here on a student visa, hence he is only allowed to work half time. He makes more

than minimum wage (despite having no very fantastic formal education and having grown up without access to telephone or

computer literally in the jungle, the school system in his country of origin appears to be of an acceptable standard though,

perhaps better than the American). Working half time he makes approx 10,000 euros a year, as do most of his friends (fellow

foreign students). I am thus pretty well aware of what life is like in that income range.

I have myself lived under such circumstances, sharing a room with three other people because a one-room flat would have been too expensive (although more luxurious). But I didn't think of myself as poor, and my flat mate came to Ireland BECAUSE he doesn't consider 10,000/year "poverty". American poverty is what most people in the world are trying to achieve.

And yes, it sucks if you cannot afford good medical care. But the vast majority of mankind cannot. And they are the poor. Not those who can afford a one-room flat in America.

What 10,000/year in America does leave is the chance to make more by working harder. There is no reason to stay poor, unless one is ill or handicapped.

So again, considering that for some reason most of these "poor" own TV sets and cars and have better lives than most people on the planet, WHAT IS SO BAD ABOUT BEING POOR?

It might be the most stupid question on the Internet, but it also one that those who want to define poverty never answer. Stupid questions are perhaps what brings the world forward.

Posted by: Andrew Brehm at July 16, 2007 03:39 AM

http://www.cpa.ie/povertyinireland/measuringpoverty.htm

claims that the poverty line is defined as the percentage of average or median income.

http://www.cpa.ie/povertyinireland/whatispoverty.htm

claims that 20% of the Irish population live on less than 185 quid per week.

(I find that number outrageously high considering that almost every shop in Dublin is looking for staff.)

Posted by: Andrew Brehm at July 16, 2007 03:42 AM

Lisoosh tells us:
"Based on the number of food insecure households, approximately 34 million in the US go hungry at least some of the time each year. This percentage is the highest of the Western industrialized nations."

Far be it from me to defend either George Bush Junior or Bill Clinton or any previous president. Further, I don't have statistics, not even official UN statistics, which are likely to be unreliable in any case. But I spent some time in Paris both in 2006 and 2007. On the Boulevard Richard LeNoir, not far from the Bastille, I saw a couple of hundred people lined up at an outdoor soup kitchen on the island in the middle of the boulevard. They were waiting for a green goo, maybe a semi-congealed pea soup. Who knows? While waiting, they held fiber glass bowls and plastic spoons, which had apparently been given to them as they waited in line. Now, I don't know how many meals these folks were eating besides what they got at the soup kitchen which, I believe, operated only in the evenings. I don't know their hunger quotient or whether they were seriously malnourished. Nor do I know whether they had a fixed abode which would entitle them to being considered part of a household. If they are not considered part of a household, then maybe they fall "under the radar," so to speak, of Lisoosh's "food insecurity" stats. I do know that there are a lot of homeless in Paris [I think they're called "sans abris"]. Last year, I believe, the Paris municipality set up special tents along the Seine for some of these sans abris. I am not sure whether they are called a household once they have obtained a personal tent. There are homeless in New York and other American cities too. So I don't know whether New York or Philadelphia or Chicago is worse off than Paris in regard to "food insecurity." But I can say that I have never seen in Jerusalem and do not know of here any phenomenon of folks waiting in line for green goo. Jerusalem does have soup kitchens [beyt tamhuwi], but these are inside buildings and they serve meat & vegetables, potatoes, and hot tea, not just some green goo. And the poor who go into those places can sit at tables as they eat. So I would not say that we are worse off in this regard than Paris. At the same time, I believe that these soup kitchens are financed by private charity, not by the government, which most sensible and decent Israelis loathe. By the way, in olmert's effort to make sure that more of the state budget is left for him and his sticky fingered friends, he is trying to lay off 1,500 post office employees, which would make life harder for those of us who need the Post Office's services.

Posted by: Eliyahu at July 16, 2007 04:51 AM

Whatever their original motives may have been, those currently pushing for more spending on healthcare cannot possible claim that it has anything to do with “relieving poverty”.

Medicaid is the US health care plan intended to make sure that “the poor” get access to healthcare. It is jointly funded by the Federal Government and the states. In FY2005, Federal and State governments spent $305.3 billion dollars on this program.

Incidentally, that is $1,017 per year for every man, woman and child in the US. However, since it is restricted to the 52 million Americans with the lowest income, it actually works out to $5,872 for each person in this group -- or $23,487 a year for a family of 4.

This, however, was not enough for our plunder-happy politicians. The Clinton administration and Congress in 1997 enacted SCHIP -- the State Children’s Health Insurance Program. It’s goal is to provide health insurance for children of the “nearly-poor”.

What constitutes the “nearly-poor”? It varies from state to state. But at present, on average you qualify for this program if your income is $40,000 a year or less. Furthermore, there is no limit to the number of children you can put on this program.

In the state of Georgia where I live the income limit is a bit higher: you can qualify with an income up to $46,000 a year. Not surprisingly, families are rushing to sign up for this program and so its costs are rising. Many politicians right now are arguing for still more spending on this program. It’s currently costing about $25 billion a year, but rising rapidly.

To drum up support for increased funding for this program, the Atlanta Journal-Constitution recently ran an article on what they described as a typical family that benefits under SCHIP. Here is what the article revealed:

- The family moved here from another state because Georgia’s income limit was somewhat higher.
- The family had a combined income of some $60,000 a year before they moved here.
- After they moved here, they took new jobs with a combined annual income of -- you got it, $46,000 a year. The father freelances as a “roving pastor” so he can control his income to keep it where they want it.
- When the family first moved here, they had one child who is autistic and needs expensive medical treatment. Since moving here, they have had two more children and have a third on the way. All four children are enrolled in the SCHIP program.
- They own a home in a nice, north Atlanta subdivision. They have two late-model automobiles, an SUV and a pick-up truck.
- They say they have tough time “making ends meet”.

Needless to say, the Atlanta Journal-Constitution was surprised when this article failed to generate sympathy for the program and instead generated a storm of angry letters from taxpayers like me who are sick of footing the bill for other people’s lives.

But that’s not the truly infuriating part. Right now, Democrats in Congress, led by Hillary Clinton, are pushing for a big increase in funding for this program. They want enough funding to change the eligibility rules so that people earning up to $87,000 a year can put their children on this program.

$87,000 a year. It’s noting but naked plunder, plunder of the upper income taxpayers to buy the votes of those making just a little less.

And then the media has the gall to run this headline: “Bush Trims Medicare, Medicaid Spending”.

You can read the story here: http://www.cbsnews.com/stories/2006/02/08/politics/main1299212.shtml

Buried deep in the story are the actual facts:

President Bush's proposal for the budget year that begins Oct. 1 asks Congress to trim Medicare spending by $35.9 billion over five years, allowing the program to grow at a rate of 7.7 percent instead of 8.1 percent currently projected.

People like glasnost and mertel, who apparently don’t read beyond the headlines, go away with the impression that we are “gutting” these programs when in fact we are growing them beyond all possible reason and with no justification other than the power-lust of politicians seeking re-election.

Nothing on earth justifies the notion that one man should be forced to take responsibility for the doctor bills of another man's children. Nothing.

Posted by: Michael Smith at July 16, 2007 05:24 AM

Nothing on earth justifies the notion that one man should be forced to take responsibility for the doctor bills of another man's children. Nothing.

They are CHILDREN. They aren't responsible for the family they were born into, and it's in society's best interest that they grow up healthy. That's enough justification for me. Cut them loose at 18, but protect them while they're children.

Posted by: Carlos at July 16, 2007 05:44 AM

"They are CHILDREN. They aren't responsible for the family they were born into, and it's in society's best interest that they grow up healthy."

They are not, but their parents are responsible for it. Yes, it is in society's best interest that they grow up healthy.

However, it is arguably also in society's best interest that people who cannot afford children will not have any. So you see there is quite a range of possible laws here.

"That's enough justification for me. Cut them loose at 18, but protect them while they're children."

I can agree with that.

Posted by: Andrew Brehm at July 16, 2007 05:52 AM

They are CHILDREN. They aren't responsible for the family they were born into, and it's in society's best interest that they grow up healthy. That's enough justification for me. Cut them loose at 18, but protect them while they're children.

If parents fail to take care of their children, government should step in and force them to do so or put the child up for adoption.

And if you or any other individuals wish to help them, you should be free to do so -- with your own money. Frankly, I think there are plenty of people willing to help -- enough so that private charity can take care of this problem -- I'd be willing to contribute to such a charity.

But nothing on earth justifies the notion that people should be allowed to have an unlimited number of children -- a decison over which I have absolutely no control or even any input -- and then confiscate my income to pay for their care.

Posted by: Michael Smith at July 16, 2007 05:58 AM

If parents fail to take care of their children, government should step in and force them to do so or put the child up for adoption.

And I thought I was the cold bastard around here, LOL. My hat's off to you!

Posted by: Carlos at July 16, 2007 06:21 AM

WHAT IS SO BAD ABOUT BEING POOR?

Well, for one thing, Michael Smith would want to have you sterilized.

Fascinating how those who claim how wonderful life is for those with no money become so furious at the thought of having to pay an extra 1% in tax to provide things like medical care for sick kiddies.

(and by the way, 4 people sharing a flat earning $10,000 each are way, way above the poverty line. Enjoy the high life!)

Posted by: mertel at July 16, 2007 08:12 AM

"Well, for one thing, Michael Smith would want to have you sterilized."

So being "poor" in America is bad because you think that Michael would want to have me sterilized?

I take that as a rather stupid answer.

"Fascinating how those who claim how wonderful life is for those with no money become so furious at the thought of having to pay an extra 1% in tax to provide things like medical care for sick kiddies."

Please provide an example of me being furious about that.

"(and by the way, 4 people sharing a flat earning $10,000 each are way, way above the poverty line. Enjoy the high life!)"

It was a ROOM, not a flat. And the possibility of moving together with three other "poor" is open to everyone.

Enjoy the high life. Indeed. Perhaps being poor is not so bad, if one can so easily form a household that makes 40,000 a year?

So, please tell me, what is so bad about being poor, when

a) most of the "poor" have cars

b) and TV sets

c) and even you consider it the high life if four "poor" team up and live together?

"Michael wants to sterilise you" is, I believe, not a commonly accepted argument for a welfare state.

But if I understand you correctly, and unless you don't believe the statistics provided about car and TV set ownership, you believe the following:

1. Making 10,000 a year makes one "poor".

2. Nevertheless four people making that much living together are not poor.

3. People with a car can still be "poor", even though they have a better living standard than 80% of the world population and frequently eat too much.

4. Your belief that Michael wants to sterilise all poor people is an argument for the theory that being "poor" (using the US definition) is objectively bad, despite the fact that many of those considered "poor" own more cars and TV sets than I can afford.

5. You think that you can accuse me of opposing specific tax increases and that that constitutes an argument that proves that "poor" people (according to the US definition) are really objectively poor, despite the fact that they live better lives than the vast majority of the world population.

I really loved the statement about the four people sharing a flat. Turns out "poverty" is somewhat independent from actual income.

A 10,000/year man living in his own flat is "poor", four of them sharing a room (or flat) are not "poor".

It's different with the objective definition. One hungry Nigerian is poor, and so are four hungry Nigerians.

Posted by: Andrew Brehm at July 16, 2007 09:23 AM

Enjoy the high life!

I don't see anybody claiming it's the "high life". That would be preposterous, and that's just you putting words in people's mouth for cheap rhetorical points.

But you DO claim 2 cars, cable TV, obesity, home ownership, etc., is "poverty". That is equally preposterous, yet nobody is putting those words in your mouth. They are all yours.

So, as I often try to tell Liberals, if you can't make a serious argument without resorting to rhetoric and demagoguery, then you consider shifting your position.

Posted by: Carlos at July 16, 2007 09:23 AM

"I don't see anybody claiming it's the "high life". That would be preposterous, and that's just you putting words in people's mouth for cheap rhetorical points."

And indeed my point about sharing a room with three other people was that I was somewhat poor then.

But the liberal's standards are different. Had I lived in a one-room flat, I would have been poor. But since I didn't have that much money, I was living the high life.

One person making 10,000 is "poor", four people making 10,0000 each are not "poor". Fantastic.

"But you DO claim 2 cars, cable TV, obesity, home ownership, etc., is "poverty". That is equally preposterous, yet nobody is putting those words in your mouth. They are all yours."

Cars and cable TV are symptoms of poverty, sharing a domicile with three others is a sign of wealth.

My living standard back then was quite high. I had access to fresh (warm) water, a washing machine, TV set (shared by everyone in the house, about 15 people), and a video recorder (shared). I wouldn't call it the "high life", but I was certainly comfortable (and it was a great community, I still visit the house occasionally and meet the new guys).

I didn't have a car. One of the other guys had one. Most couldn't afford a car. Most of us worked in walking distance to the house. Many people in Dublin live like that, at least for a few months.

Ireland is now and was then about as rich as the US and I assume there are people in the US who live like I did. But I would not call them poor either, although they are certainly worse off than the car-owning cable-tv-watching obese characters that also exist.

Posted by: Andrew Brehm at July 16, 2007 09:31 AM

Fascinating how those who claim how wonderful life is for those with no money become so furious at the thought of having to pay an extra 1% in tax to provide things like medical care for sick kiddies.

The fact is that American poverty is mostly the result of poor decisions. A well-known economist (maybe Sowell, can't remember the name ..) said there were four or five things you had to do in America to avoid poverty. They went something like - graduate high school, get a job - any job - and stick with it until a better job comes along, and don't have kids before you get married.

People who do all the above have something like a 2% chance of needing the food pantry.

I don't mind helping hard working respectable folks who've just had a run of bad luck, but I do mind my taxes supporting drug addicts and people who sire multiple kids out of wedlock with no means of caring for them.

Posted by: I Blame the Parents at July 16, 2007 10:02 AM

Mertel said:

Well, for one thing, Michael Smith would want to have you sterilized.

Mertel, do you know any argumentative technique other than the fallacy of the straw man? I certainly did not advocate sterilization of the poor. When you resort to the utterly lame tactic of misrepresenting your opponent's position, it is simply a confession on your part that you have no valid argument to offer against that position.

To repeat, my position is simply that it is a fundamental INJUSTICE to force one man to bear responsibility for the consequences of another man's decisions and actions -- decisions and actions completely out of his control or influence. That is the very definition of injustice -- and nothing can justify an injustice.

In justice, only the actor can be held accountable for the consequences of his actions -- and nothing justifes the atttempt to shift that responsibility to a third party not involved in the action.

Now, if you want to argue that it is proper to allow people to create an unlimited number of dependents who they can then support by confiscating other people’s money -- if you want to argue that such a set-up is fair, just and moral -- go ahead, let's hear your argument. But do not misrepresent my position.

Mertel also said:

Fascinating how those who claim how wonderful life is for those with no money become so furious at the thought of having to pay an extra 1% in tax to provide things like medical care for sick kiddies.

Another lame straw man. I have never claimed that life is wonderful for those with no money.

I also recommend that you take a course in basic math. An income of $40,000 a year is not “no money”. And the sums being spent on such programs are far more than "an extra 1% in taxes".

Do facts have no meaning to you?

Posted by: Michael Smith at July 16, 2007 11:07 AM

Carlos said:

And I thought I was the cold bastard around here, LOL. My hat's off to you!

Carlos, I am in favor of helping children whose parents cannot properly support them. I would contribute to a charity that provides such support.

But I am opposed to giving parents a blank check on my earnings. And that's the long-term affect of agreeing that they have a right to some portion of my earnings to support their children. Once you concede that principle, all that's left is one long, non-stop fight to keep them from taking ever more of your income.

First came the claim that parents should have a right to feed their children at my expense -- after all, what are you going to do, let them starve? -- and so I'm taxed to pay for food stamps.

Then it was argued that if they could be fed at my expense, surely they had a right to be educated at my expense -- after, aren't they entitled to an education? -- and so I am taxed for life to support the local public schools, even though I have never put a child in one.

Then it was argued that if they could be fed at home and be given a basic education at my expense, surely they could be given a decent breakfast and lunch while they are at school at my expense -- after all, they can't learn if they're hungry -- so now I pay for a school lunch program

Then it was argued that if they could be fed and given a basic education at my expense, surely they can go to college at my expense -- after all, don't they have a right to an advanced education? -- and so my taxes finance student loans, scholarships and grants of all sorts.

Then it was argued that if they could be fed and educated at my expense, surely their medical care can be at my expense as well -- after all, if they're sick they have a right to see a doctor, right? -- and so now I pay taxes to purchase them health insurance.

Then it was argued that if they could be fed, educated and healed at my expense, surely they can receive eye glasses and braces for their teeth at my expense -- after all, they have a right to see and have straight teeth, right? -- so these benefits were added to the medical plans and I pay still more taxes.

Then is was argued that if I can be taxed to pay for all this stuff for children of the “ truly needy“, then surely I can be taxed to pay for these things for children of the “nearly needy” -- those making up to $40,000 a year -- after all, if one group has a right to my money, doesn’t the next group have an equal right? -- and so I am taxed to supply these things for still more children.

And now it is being argued that if I can be taxed to pay for all these things for children of the “truly needy” and for children of the “nearly needy”, then I can be taxed to pay for these things for children of the “middle-income needy” -- those making up to $87,000 a year -- after all, if the first two groups have a right to a portion of my income, doesn’t this third group have a right as well? -- and when that law is passed, I will be taxed to pay for all of these things for an even larger group of children.

Do you see a pattern here? What’s to limit what they can take? When dealing with government welfare schemes, any blank check you give them is always made out for everything you own.

So, yes, I am willing to be called a cold bastard because I am sick of being eaten alive so that politicians can practice charity with my money for purposes of buying votes to stay in office.

Posted by: Michael Smith at July 16, 2007 12:00 PM

So, yes, I am willing to be called a cold bastard because I am sick of being eaten alive so that politicians can practice charity with my money for purposes of buying votes to stay in office.

That's not charity.

It's patronage.

"Vote for me, and I'll give you things (and stick someone else with the bill)!"

That kind of thing is one of the reasons the AMT is interesting- due to inflation and economic growth (people disagree which is the primary driver), we're likely to be in a situation where the personal tax system in the US is effectively going to be a flat tax in 2-3 decades.

Of course, I'm going to be retired* (or dead) by then, but it'll be interesting to watch.

*and no, I'm not expecting to get a single dime of my SS contributions back.

Posted by: rosignol at July 16, 2007 07:05 PM

Hi -People. I 'm from England, U.K. for 'reference purposes', if you disagree, with my idea's, fear enough, but, please don't send me 'Hate E-Mail's: simply, send me why you disagree etc. etc.
Here 's '(Partly) Why I Believe in Liberalism', (in spite of being Dyslexic and on the 'Dole'). In my opinion, there should only be, the following rules:

-People should not be allowed to steal and if they do, they should 've to give the money/the value of what they stole, back to: the person they sole from + a further 10%.
-People, should not be allowed, to murder, if thye do ,then they should 've to give what the person, they murdered 's salary was + 20%, to his/her family. -People, should not be allowed to tress pass/'Invade, someone else's 'Personal Space'.
-People, should not be allowed, to hit anyone, unless: '1st hit'.
-'Tax', should be;' non -Compulsory' but, can be in a book: the names of people, who pay it and how much, so people, can buy from; the cos., which pay the most.
-People should only help US, disabled people (like Dyslexics), if they want to!!
People, should not be forced, to help 'us' dyslexics/other disabled -people, with things, like - Parking Spaces/easy access, unless they want to: cos., should not be forced, to do so.
-Beggars, should be allowed to beg, unless they steal, then: they should be removed, from begging.

Here 's: part -of the reason, why I feel this way.
I was crap @ School but, why should someone, who was better then me, be forced to: help me/stopped from; realizing their -'true potential'??
If someone gives to 'Charity', by choice, it 's a beautiful thing and We, should buy more for them, where possible.
In England, we 're not allowed to 'defend our own home's', the criminals, 're 'treated best'. You can't 'hit back', if someone 's doing something wrong. (I Hope, our P.M., (Prime Minster) doesn't see this!!!! This is 'Un-Liberal', the result: crime, crime, crime.
Someone, can 'attack an old -lady', but, if I hit them, I'm in trouble. It's not jsut the government and its rules and laws, the people, have 'no respect, for fellow people's Liberty'; the right to live in peace, in your own home, the right 'not to be robbed' etc. etc. In some cases, 'beggars, 're not allowed to beg': who owns the streets, to 'stop beggars, from -begging'?? I can 't really 'fully' -explain, why I feel this way, if you 'd like to 'find -out'/read more, then, please send me an E-Mail. I 'll then, 'explain it, in more -detail', answer any q's (questions)/concerns etc. etc.

Posted by: Michael K. Shenton at August 21, 2007 06:57 AM
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