Child poverty

This video is about child poverty in the US


Poor Kids (full documentary) | FRONTLINE - YouTube

But I do not think the solution is so simple as just giving these families money.

This is a phenomena being seen more and more in the US, especially in certain parts and regions.

What happens when people, who cannot really afford children, have children anyway? Well, then those children grow up in poverty, and money is not available for all the things American children normally have. It starts looking a little more like a Third World.

Now, we can talk about these people having children in the first place, I suppose there are many directions in which this conversation could go.
But I would like us to at least touch on the discussion of a growing segment of the population not being able to afford children, whereas that segment of the population was maybe smaller a generation ago.

One of the main issues is economic. There is a larger segment of the population that is just scraping by. Rural areas have been particularly hard hit, but in the more populated areas housing prices have risen to unaffordable levels. Especially for a family with children that needs more space.

The society just isn't able to have children anymore.
(I mean not keeping up with replacement level. There's a big section of society, maybe a third or a half who can't really afford children, especially the younger generation age range, 22-33, where children traditionally come from)

What are we going to do, just replace them with immigrants from other countries?

I'm not sure that's such a good idea. If a country's own people can't really afford to have children, is it really such a good idea to be bringing in more people?
How are those new children going to be brought up? In most cases it's going to be even worse.

I think there is something in the economy and overall nature of the job market that needs to be addressed, rather than simply just seeing handing out money and "wealth transfer" (as it is called) as the solution to all these problems.

 

Right: their landlords will just take it all.

"When I fed the poor, they called me a saint; when I asked why the poor had no food, they called me a communist." -- Dom Helder Camara

The cost of a median SFD home in years of median after-tax wages has more than doubled in that time. The increase is entirely in the land cost -- which has tripled -- not the construction cost. Land cost is determined exclusively by the expected net after-tax subsidy to the landowner, which is funded by other people's -- i.e., working people's -- taxes.

Not housing prices. Land prices. The cost of land is the cost of permission to access the economic opportunity available from that location.

No, the society has simply decided that increasing the unearned incomes of landowners is a higher priority than having a future.

Immigration is profitable for landowners, which is all that matters.

The increased extraction of wealth by landowners with increase in workforce is an inescapable implication of the Law of Rent, as was thoroughly explained by Henry George in "Progress and Poverty" more than 140 years ago.

 

I live in a CA county of 480,000 population, with a median home price of $900K, yet 80K-100K people stand in food lines each month...what can explain this? 15%-20% of the population require food assistance! This county is more rural than urban yet the cost of living is no different from any of the major population/employment centers across the US. Name any major city in the US and ponder how the 75-100 million Americans who earn $40K or less per year can afford to live in the areas in which they work...answer is they can't! Even the bedroom communities 20-50 miles outside of these employment areas have median home prices of $500K! It is very costly to commute 1-3 hours each day to work. And, what percentage of the people struggling in these high cost of living areas, possess the ability to simply relocate? And if so where can they go that provides affordable housing and a tolerable cost of living providing middle-class paying jobs?

What are possible solutions? Just give everyone $250K per year? Just force the minimum wage to $50/hour? Just force everyone to obtain a college education?

IMO possible solutions are thin or non-existent. Society has created an untenable scenario for a majority of it's citizens. From poor education to poor infrastructure to poor healthcare to reckless urban planning to horrific inflation. Society absolutely has a major problem but society has proven incapable of doing better...

 

That's easy. The home price is nothing but the land price, and the land price is nothing but the subsidy to the landowner. That subsidy has to be paid for by stealing from everyone else. The richer the landowners, the poorer everyone else. That is why CA committed suicide when it passed Proposition 13 in 1978.

The astronomical home prices prove that is false. The subsidy to landowners can only be paid for by taking from everyone else. That is what makes the cost of living unaffordable: people have to pay landowners full market value just for permission to live.

The explanation is simple: the productive have to pay for government TWICE -- once in taxes to fund desirable public services and infrastructure, and then again in land rent to landowners for permission to access the exact same desirable public services and infrastructure their taxes just paid for -- so that landowners can pocket one of the payments in return for nothing.

How about not stealing the rightful earnings of the productive in order to give the loot to the privileged, especially landowners, in return for nothing?

Because you permanently refuse to know the fact that landowning is legalized stealing.

By forcing the productive to subsidize idle landowning.

None of which matter AT ALL compared to privilege, which has caused the poor education, infrastructure, planning, healthcare and inflation.

Because YOU, PERSONALLY refuse to know self-evident and indisputable facts of objective physical reality.

 

And what exactly do you mean by that?
Do you mean don't give them money because the landlords will just hike the rents and take it from them?

 

I overall agree with you, but will point out that increased land costs can drive up the local costs of labor and construction costs, to a smaller extent.

I mean if you are building something, you typically need to have a location not too far away, storage of construction equipment and things like that, and so higher land costs and higher rents will translate somewhat into higher construction costs as well. Although of course the direct cost of land will go up more than the costs of construction.

I agree you are right, one could say from one perspective, there is a certain type of parasitism going on, but to try to find a better solution would be very difficult. You would likely get all sorts of economic distortions, perverse incentives. About the best concept I've seen is a Land Value Tax, but even that has some issues.

 

Yes, the requirement to subsidize parasites drives up general costs, and high land costs increase the required subsidization of bankers, too, via increased mortgage interest costs.

Justice is not difficult to find or describe. It's only difficult to implement because the privileged are counting on injustice.

That's the current system.

Right; a Land Value Tax has the disadvantage that it uses land value as a proxy for the subsidy to the landowner. But in fact, land value is dominated by the expected future relationship between the discount rate and the rent growth rate rather than the current subsidy. A better system is location subsidy repayment (LSR), which uses data processing technology to measure the subsidy to the location owner directly from transaction and appraisal data, rather than using land value as a proxy.

 

The Henry George Theorem states that to the extent that it is more advantageously accessed at certain locations, any publicly funded benefit like services, infrastructure, etc. is fully captured in increased land rents. The only people who benefit are landowners. That is why all the money spent on the poor has gone to their landlords, and the poor are no better off.

Correct. Because it is more advantageous to have the money in areas with good access to shopping, health care, education, public services and infrastructure, etc., it will all just be taken by landowners. The solution is to require landowners to repay the subsidy, but give every resident citizen a flat, uniform exemption. That way, instead of tenants competing for land to get access to economic opportunity, landowners would have to compete for tenants in order not to lose money to the repayment liability.

 

Oh, I see, the Henry George angle.
Okay, I can respect you on that. I think I still overall disagree with your position on this here, but I don't want to be getting into a whole other complicated side argument.

What about giving people a certain amount of credits, and telling them they can discretionarily use the money on certain things, but not on rent? And then they have to provide some verification what they spent the money on.

I still don't think this would solve housing shortage issues though. But it might give people some overall reprieve.

See, I totally see your perspective on this, and there is truth to what you are saying, but at the same time, your presumed proposal would take away all the spending power from the consumer and give it to government.
There is something to be said for consumer choice. It is a form of individual empowerment. Once government is in charge of individual spending choices, then everything becomes political.

The other question is do we really need to come at it from this angle? I mean, wouldn't the Land Value Tax theoretically be enough to capture that surplus? I mean, there are two different ways this problem could be approached. Either take the money from the renter so he can't pay the land owner, or let the renter pay the land owner, but then have government take that money from the land owner. If you see what I mean there.

I think this line of discussion would be better focused on in another thread, and I suspect the Henry George type policy would not be the only solution to addressing the issue of child poverty.

 

Here's another idea: What about trying to move some of the spending and job opportunity from areas with high costs of housing to other far away areas with much lower costs of housing and lower land prices?

 

Interesting analysis there.
You know, from a Marxian analysis here, one could say there are two factors: labor and capital. We could look at how those fit into Cost-push Inflation.

 

It sounds to me that many of the problems in the region where you live were caused by overpopulation. There are too many people there now.

Now I'm not saying it would absolutely be impossible to devise some sort of system that would be able to work for everyone (theoretically), but I am saying that this put a tremendous pressure on the free market system and caused it to stop operating very functional.

In other words, there was an outside pressure, a factor, which caused the free market system to not give a good outcome.

Unfortunately, when we start looking for alternatives outside the free market, we run into many problems and difficulties.

 

No. There is no overpopulation. There is under-honesty, under-liberty, under-justice, under-honesty, under-wisdom, under-courage, under-knowledge and under-honesty, but no overpopulation.

A free market -- a real free market, not a capitalist slave market -- is the solution.

A capitalist market, in which people's rights to liberty have been forcibly stripped from them without consent or just compensation, and are then bought and sold by others as their property, is not a free market. It is a slave market.

No, you just need to recall what a free market actually is. A free market is as impossible under capitalism as under socialism.

 

Here's a better idea: stop forcing producers to subsidize idle landowners. The point of using a better location is that it increases productivity and/or reduces costs. But that economic advantage is then taken by the landowner as rent, in return for nothing. As a result, the producer must pay for government TWICE -- once in taxes to fund desirable public services and infrastructure, then again in land rent to a landowner for permission to access the exact same desirable public services and infrastructure his taxes just paid for -- so that landowners can pocket one of the payments in return for nothing.

 

Which is why Marx was wrong. Land (natural resources) is a distinct factor. There is no way to arrive at a correct or useful analysis by aggregating land and capital as "the means of production."

 

Without understanding the role of land, it is impossible to understand anything about economics.

They will still have to pay landowners full market value just for permission to spend the credits. Give everyone $100 in food stamps, and their rents will all go up by $100.

Nope. It would only give landowners more money for nothing.

No it wouldn't. It would simply restore the individual liberty right to use land that private ownership of land removed. Every resident citizen would get free, secure tenure on enough of the available advantageous land of their choice to have access to economic opportunity. People would have the same choice of location they have now, only a uniform amount of the cost would be exempted.

See above. The UIE gives people choice. There is no political component.

Theoretically. Theoretically, land value is the capitalized present value of the after-tax rent. But as I explained before, rent changes at different rates on different parcels over time, and the market anticipates the expected changes and reflects that in land value. Land value is therefore not the same multiple of current rent on all parcels. LVT is therefore less accurate, so holders of some locations would pay more than the current rent, others would pay less. That would lead to some good land being left idle, with other, less advantageous land being used instead. That is inefficient and wasteful.

There is also the third way I propose: require the landowner to repay the subsidy (the land's current unimproved rental value) to the community, but reduce that repayment liability by a uniform amount for each citizen residing at that location.

Henry George did not propose a UIE, so his Single Tax policy would not be very effective in reducing child poverty: poor people would still have to pay full market value for access to economic opportunity. They'd just be paying the community for the advantages it provides, rather than paying a private landowner for doing nothing. The LSR + UIE proposal, by contrast, ensures every citizen gets free, secure access to economic opportunity. The advantage of the UIE over a cash payment like UBI in reducing child poverty is that unlike a UBI, the UIE can only be spent on securing a decent place to live, and cannot be lost, stolen, or squandered on alcohol, drugs, lottery tickets, etc.

 

What then is the solution? It sounds like you can't give these people anything for free, because then (according to your theory) the landlord will just demand the extra cash (the cash that these individuals will save by no longer having to buy necessities).

Is the government going to have to manage the person's entire financial life, providing practically everything for them, and making sure they only have so much money left, knowing that all that money is probably going to end up going to the landlord?
I think that would be kind of ridiculous?
Maybe you are advocating Communism or some sort of command-economy?

It seems the Land Value Tax is kind of the only other way.

(Well, either that, or trying to seek a new more optimal balance between the supply and demand of housing in the market)

 

The Henry George perspective draws a distinction between land (as well as other natural resources), and that aspect of capital which is a product of human labor.
Marxism generally just lumps them all together in one category as "capital".

The Henry George perspective could give one additional insight, either on its own, or when augmented onto the Marxist economic perspective.

I feel we might be getting a little off topic though. This discussion could go into many different directions, many of them leading to some pretty complicated debates.

 

Most of the US is rural and does not have decent infrastructure for commerce...nor does it have a solid labor base. It's a Catch-22 scenario; a factory is not going to locate in a rural area and rural workers are not mobile. City planning can be better but most high-density employment centers (major towns) are already in place. Cities can force affordable housing development but it's small scale. It's quite complex...

 

I would question whether that's really the reason. Whether the lower amount of "infrastructure" in these regions is really the reason for the very low amounts of commerce. There are plenty of economically depressed areas in the US that have roads and electricity/water access. Even some regions with lots of abandoned houses that are crumbling apart.
I suspect it may have more to do with other economic factors.

 

Yes, but you would think that if cost of housing gets too expensive, that would start having an effect raising the cost of labor too.
(workers will have to demand a little bit higher wage levels if their housing costs are higher)
So that should be at least one small factor putting pressure on employers to locate in areas with costs of housing that are not too expensive.

I suspect it might have more to do with the rich business owners wanting to have the amenities can only be found near an expensive city.
The trade-off in life quality to live in an expensive city is different for a rich person than it is for a low paid worker.

 

There's no panacea, obviously, but the foundation has to be LSR + UIE. Without that, no solution is possible.

Exactly. We have to give them something landowners can't take away: their rights.

They just need their rights. That gives them a bargaining position from which to manage their own lives. If they have to pay a landowner just for permission to work, shop and live, they have no bargaining power.

No.

There is no other way but justice, and restoring people's rights to liberty, and that means solving the land problem.

It's all about land.

 

The Marxist perspective, like the capitalist perspective, cannot tell the difference between the factory owner, who can only offer the worker access to economic opportunity they would not otherwise have, and the landowner, who can only deprive the worker of access to economic opportunity they would otherwise have.

 

If you read my comments you would know I live in a county that is mostly rural...not over-populated.

Your 'free market' is not required to give anyone a 'good outcome'?? There are no guarantees!

A 'market' is a place where opportunities exist for commerce. One opportunity is starting a business, another is labor finding employment...but there are no guarantees that either will succeed. Society has a huge responsibility to provide the infrastructure, environment and labor. IMO society is to blame for most of these issues. And lastly, people must make solid decisions in their life to obtain the qualifications necessary to perform in the 'market'...