Tuesday, November 12, 2019

New report shows socialists and the federal gov't likely exaggerated poverty for years

Have you ever wondered why our official poverty rate seems to never change despite the trillions we spend combating poverty? Economists may have an answer.
Although the nation's official poverty rate has barely moved since the 1970s, a study published last month by professors at the University of Chicago and the University of Notre Dame argues that poverty may be near record lows but we don't realize it because of bad government data.
The authors of the report released by the American Enterprise Institute are two well-respected economists, Bruce Meyer and James X. Sullivan, who attribute the discrepancy to "well-documented flaws" with the federal government's data collection, which excludes benefits from many social programs. Meyer and Sullivan adjusted for the government's errors and found that poverty in America has fallen sharply over the past 50 years.
As they wrote in the Annual Report on Consumption Poverty:
Using the standard of living of the poor in 1980, the consumption poverty rate fell by more than 10 percentage points, from 13.0 percent in 1980 to 2.8 percent in 2018, while the official poverty rate fell by only 1.2 percentage points over that period.
Plainly stated, the share of Americans living below the poverty line is probably much lower than the 11.8 percent figure reported by the federal government and often repeated by politicians and the media.

Huh? The poverty rate is wrong?

For some years now, economists on both the right and the left have said the official poverty rate from the U.S. Census Bureau is inaccurate. Among its most notable problems, as Meyer and Sullivan note, "the official poverty measure is based on cash income only, which fails to capture all the resources available to a family including tax credits and in-kind transfers."
In other words, not accounting for federal programs, like SNAP (commonly known as food stamps), Medicaid, housing vouchers, and other forms of non-cash assistance, skews the poverty rate upward and mislabels millions of people as poor. The two economists and other academics have also argued that the price index used as a benchmark by the government overstates the extent of inflation which further amplifies the poverty rate.
For instance, let's say a retired parent with little or no 401(k) savings lives at home with you and receives food stamp benefits. Even if your parent enjoys a decent quality of life, there is a good chance the federal government classifies this person as living in poverty because non-cash family support (i.e. free housing and meals) and food stamps do not qualify as income.
Other economists and liberal pundits say our poverty thresholds are actually too low and some people who live above the poverty line suffer material deprivation. This may be true, but it also underscores the need to re-examine government statistics.
Inaccurate measures of poverty can distort perceptions of our economy. These inaccuracies can influence policy decisions, spending priorities, and media narratives. For example, the U.S. was heavily criticized last year following claims by the U.N. that 18.5 million Americans live in extreme poverty. Rep. Alexandria Ocasio-Cortez (D-N.Y.) repeated this allegation on Twitter and it was then retweeted nearly 11,000 times. However, as Reason reported in June, the National Bureau of Economic Research believes the federal government has likely mislabeled 90 percent of the people it says live in such conditions.

This writer's perspective

Here are three reasons why Americans should care about poverty being much lower than what the government is reporting:
  • It shows the degree to which far-left politicians have exaggerated the country's poverty levels for their political gain. Their exagegrations are unjustified because they should know better. Unlike ordinary citizens, members of Congress have access to full-time research services, staff, and think tanks.
  • As other poverty experts have argued, having more accurate poverty data allows us to better target our relief efforts and help those who need assistance the most.
  • Most importantly, it means that fewer of our fellow citizens are poor.
Of course, none of this relieves us of our moral duty to assist those in need. Nor does it deny the fact that there are clearly many people struggling to make ends meet. It also shows that anti-poverty programs have been more effective than we sometimes care to admit, and that reforms championed by conservatives have strengthened them.
We should celebrate the news that, in terms of material prosperity, many Americans are better off than we realize. Let's also demand accurate statistics from the government, and push back against those who knowingly use faulty data as a pretext for their radical agendas.

Today government redistributes sufficient resources to elevate the average household in the bottom quintile to a net income, after transfers and taxes, of $50,901—

The Truth About Income Inequality

The census fails to account for taxes and most welfare payments, painting a distorted picture.

Never in American history has the debate over income inequality so dominated the public square, with Democratic presidential candidates and congressional leaders calling for massive tax increases and federal expenditures to redistribute the nation’s income. Unfortunately, official measures of income inequality, the numbers being debated, are profoundly distorted by what the Census Bureau chooses to count as household income. 
The published census data for 2017 portray the top quintile of households as having almost 17 times as much income as the bottom quintile. But this picture is false. The measure fails to account for the one-third of all household income paid in federal, state and local taxes. Since households in the top income quintile pay almost two-thirds of all taxes, ignoring the earned income lost to taxes substantially overstates inequality. 
Earned income
Net transfers
Net taxes
Net income
Net income
Earned income
The Census Bureau also fails to count $1.9 trillion in annual public transfer payments to American households. The bureau ignores transfer payments from some 95 federal programs such as Medicare, Medicaid and food stamps, which make up more than 40% of federal spending, along with dozens of state and local programs. Government transfers provide 89% of all resources available to the bottom income quintile of households and more than half of the total resources available to the second quintile. 
In all, leaving out taxes and most transfers overstates inequality by more than 300%, as measured by the ratio of the top quintile’s income to the bottom quintile’s. More than 80% of all taxes are paid by the top two quintiles, and more than 70% of all government transfer payments go to the bottom two quintiles.
America’s system of data collection is among the most sophisticated in the world, but the Census Bureau’s decision not to count taxes as lost income and transfers as gained income grossly distorts its measure of the income distribution. As a result, the raging national debate over income inequality, the outcome of which could alter the foundations of our economic and political system, is based on faulty information.
The average bottom-quintile household earns only $4,908, while the average top-quintile one earns $295,904, or 60 times as much. But using official government data sources on taxes and all transfer payments to compute net income produces the more complete comparison displayed in the nearby chart. 
The average bottom-quintile household receives $45,389 in government transfers. Private transfers from charitable and family sources provide another $3,313. The average household in the bottom quintile pays $2,709 in taxes, mostly sales, property and excise taxes. The net result is that the average household in the bottom quintile has $50,901 of available resources. 
Government transfers go mostly to low-income households. The average bottom-quintile household and the average second-quintile household receive government transfers of some $17 and $4 respectively for every dollar of taxes they pay. The average middle-income household receives $17,850 in government transfers and pays an almost identical $17,737 in taxes, while the fourth and top quintiles of households receive government transfers of only 29 cents and 6 cents respectively for every dollar paid in taxes. (In the chart, transfers received minus taxes paid are shown as net government transfers for low-income households and net taxes for high income households.) 
The average top-quintile household pays on average $109,125 in taxes and is left, after taxes and transfer payments, with only 3.8 times as much as the bottom quintile: $194,906 compared with $50,901. No matter how much income you think government in a free society should redistribute, it is much harder to argue that the bottom quintile is getting too little or the top quintile is getting too much when the ratio of net resources available to them is 3.8 to 1 rather than 60 to 1 (the ratio of what they earn) or the Census number of 17 to 1 (which excludes taxes and most transfers).
Today government redistributes sufficient resources to elevate the average household in the bottom quintile to a net income, after transfers and taxes, of $50,901—well within the range of American middle-class earnings. The average household in the second quintile is only slightly better off than the average bottom-quintile household. The average second-quintile household receives only 9.4% more, even though it earns more than six times as much income, it has more than twice the proportion of its prime working-age individuals employed, and they work twice as many hours a week on average. The average middle-income household is only 32% better off than the average bottom-quintile households despite earning more than 13 times as much, having 2.5 times as many of prime working-age individuals employed and working more than twice as many hours a week. 
Antipoverty spending in the past 50 years has not only raised most of the households in the bottom quintile of earners into the middle class, but has also induced many low-income earners to stop working. In 1967, when funding for the War on Poverty started to flow, almost 70% of prime working-age adults in bottom-quintile households were employed. Over the next 50 years, that share fell to 36%. The second quintile, which historically had the highest labor-force participation rate among prime work-age adults, saw its labor-force participation rate fall from 90% to 85%, while the top three income quintiles all increased their work effort.
Any debate about further redistribution of income needs to be tethered to these facts. America already redistributes enough income to compress the income difference between the top and bottom quintiles from 60 to 1 in earned income down to 3.8 to 1 in income received. If 3.8 to 1 is too large an income differential, those who favor more redistribution need to explain to the bottom 60% of income-earning households why they should keep working when they could get almost as much from riding in the wagon as they get now from pulling it. 
Mr. Gramm is a former chairman of the Senate Banking Committee. Mr. Early served twice as assistant commissioner at the Bureau of Labor Statistics.

Terrorism in Sweden and Denmark by crimes that were unknown before 207

Danish PM vows to tighten Swedish border controls after bomb blasts

  • 14 August 2019
Danish Prime Minister Mette Frederiksen speaking at a press conference after the explosions last weekImage copyrightEPA
Image captionMette Frederiksen was elected as prime minister in June 2019
The Danish prime minister has pledged to tighten controls at the Swedish border after two bomb blasts in Copenhagen this week. 
Two Swedish men have been charged over the attacks.
Prime Minister Mette Frederiksen said she wanted to protect Denmark in a "better and smarter way". 
"We cannot have a situation where you can travel from Sweden to Denmark and place dynamite in the middle of our capital," she said.
"The target is the criminals - it's not the many commuters or people who travel across the country," Ms Frederiksen added.
Two explosions hit Copenhagen last week, one at a police station on Saturday and one outside the national tax agency three days earlier.
One person was injured. 
One of the suspects, who is aged 22, was arrested in the Swedish city of Malmö, just over the border from Denmark. 
Forensics working outside the police station that was hit by an explosion last weekImage copyrightAFP
Image captionForensics working at the police station that was hit by an explosion
An international arrest warrant has been issued for the other man, a 23-year-old. 
Ms Frederiksen, who was elected in June, said it was clear that the incident was linked to Sweden but acknowledged that Denmark also has "problems at home". 
"In this government, we want the police to have the tools they need," she said. 
Sweden and Denmark are connected by the Oresund Bridge over a 16 km (10 mile) strait. 
Both countries are in the European Union and the Schengen passport-free travel area.
In response to the European migrant crisis in 2016, Sweden clamped down on border controls by imposing ID checks. 

Sweden's 100 explosions this year: What's going on?

Damaged balconies and windows are seen at a block of flats that were hit by an explosion Friday morning, June 7, 2019Image copyrightJEPPE GUSTAFSSON/AFP
Image captionTwenty-five people were hurt in this June attack in the central town of Linkoping
When three explosions took place in one night across different parts of Stockholm last month, it came as a shock to residents. There had been blasts in other city suburbs, but never on their doorstep.
Swedish police are dealing with unprecedented levels of attacks, targeting city centre locations too. The bomb squad was called to deal with 97 explosions in the first nine months of this year.
"I grew up here and you feel like that environment gets violated," says Joel, 22.
The front door of his apartment block in the central Stockholm neighbourhood of Sodermalm was blown out and windows were shattered along the street. 

Who is to blame?

This category of crime was not even logged prior to 2017. Then, in 2018, there were 162 explosions and in the past two months alone the bomb squad have been called to almost 30.
"Bangers, improvised explosives and hand grenades" are behind most of the blasts, says Linda H Straaf, head of intelligence at Sweden's National Operations Department.
The scene of a 17 October attack in Stockholm
Image captionThis building attacked in the Sodermalm area of Stockholm is not far from a playground and a school
The attacks are usually carried out by criminal gangs to scare rival groups or their close friends or family, she says.
"This is a serious situation, but most people shouldn't be worried, because they are not going to be affected."
Teams have been sent to work with gang crime specialists in the US, Germany and the Netherlands, and they are liaising with Swedish military experts who dealt with explosives in Africa and Afghanistan.
"It's very new in Sweden, and we are looking for knowledge around the world," says Mats Lovning, head of the National Operations Department.
For criminologist Amir Rostami the only relevant comparison is Mexico, plagued by gang violence.
"This is unique in countries that pretty much don't have a war or don't have a long history of terrorism," he says. 

Where are the explosions?

Most attacks have taken place in low-income, vulnerable suburbs in the biggest cities: Stockholm, Gothenburg and Malmo.
Malmo had three blasts in just over 24 hours at the start of this month.
But more affluent places are now being targeted too. An explosion in the residential northern Stockholm suburb of Bromma last month destroyed the entrance to a block of flats, blew out windows and damaged cars.
Presentational white space
A 20-year-old passerby was treated in hospital when a bomb targeted a grocery shop in the historic university city of Lund. And 25 people were hurt when a block of flats was targeted in the central town of Linkoping.
Sodermalm is a former working-class area that has become increasingly gentrified. Vintage boutiques and vegan delicatessens break up grids of mustard- and terracotta-painted apartment blocks. The building targeted is opposite a park and close to a school.
"Immediately afterwards, when police closed off the streets and I walked with my two kids to preschool, I got really scared," says Malin Bradshaw, who lives a few doors down.
Joel from Sodermalm
Maddy Savage
It felt just weird. I’ve been living here my whole life, I grew up here and you feel like that environment gets violated
Joel, 22
Apartment block was targeted in Stockholm
Presentational white space
No arrests have been made and police will not comment on potential motives. 
"If it was targeted then to be honest it makes us feel safer, because then the attack was not aimed to harm the public," says Ms Bradshaw, hoping it was not a random attack.

Who are Sweden's criminal gangs?

Police say the criminals involved are part of the same gangs behind an increase in gun crime, often connected to the drugs trade. Sweden saw 45 deadly shootings in 2018, compared with 17 in 2011.
But why they have added explosives to their arsenal is unclear.
Swedish police do not record or release the ethnicity of suspects or convicted criminals, but intelligence chief Linda H Straaf says many do share a similar profile.
"They have grown up in Sweden and they are from socio-economically weak groups, socio-economically weak areas, and many are perhaps second- or third-generation immigrants," she says.
Ideological debates about immigration have intensified since Sweden took in the highest number of asylum seekers per capita in the EU during the migrant crisis of 2015. But Ms Straaf says it is "not correct" to suggest new arrivals are typically involved in gang networks.
Media captionNewsnight: Is Sweden a Utopian dream or a multicultural nightmare?
For many on the political right the explosions add fuel to their argument that Sweden has struggled to integrate migrants over the past two decades.
"In the future the situation might grow even bigger and even more problematic," says Mira Aksoy, who describes herself as a national conservative writer.
"Since they are in the same area, they are in the same mindset. It's easy for them to connect to each other. They don't feel like they should become a part of Sweden and they stay in their segregated communities and start doing crimes."
This kind of sentiment has grown in recent years, and the nationalist Sweden Democrats attracted 18% of the vote in 2018.
But Malin Bradshaw believes crime levels are more to do with income and social status. 
Malin Bradshaw
Malin Bradshaw
If you're anti-immigration it's so easy to angle everything as just 'oh it's the immigrants' fault', but the problem goes way beyond that.
Malin Bradshaw
Sodermalm resident, Stockholm
Amir Rostami says ethnicity rarely plays a big role in gang membership in Sweden. "When I interview gang members... the gang is their new country. The gang is their new identity."

Did Swedish media hush it up?

Another important layer of this story is how it has been covered by Swedish media.
After last month's trio of attacks in Stockholm, public broadcaster SVT was accused of a leftist cover-up for leaving the story out of a main evening news programme.
"I think that they have not done a great job... I feel like they're trying to shrink the news," argues writer Mira Aksoy.
A damaged building that was hit by an explosion on early, June 7, 2019 is seen in Linkoping, central Sweden.Image copyrightGETTY IMAGES
Image captionSwedish media did give broad coverage to this June attack in central Sweden
Christian Christensen, a journalism professor at Stockholm University, was himself surprised that some programmes paid little attention to the explosions, but feels there was extensive coverage in the big newspapers and on local news programmes. 
"The problem is that Sweden is used symbolically as proof of problems with immigration, proof of problems with leftist policies - unfairly in many cases," he argues.
A recent study by polling company Kantar Sifo found that law and order was the most covered news topic on Swedish TV and radio and on social media.

What are authorities doing?

Police say they are trying to track down the perpetrators, but only one in 10 of such crimes in 2018 has led to a conviction.
The head of the National Operations Department has promised greater co-ordination with security police.
The home affairs minister has announced increased powers to search suspects' homes and greater efforts to break the culture of silence around gang crime.
But in Sodermalm, resident Anders Herdenstam says there has to be a greater focus on integration.
"I am not afraid for where I live. I am more concerned when it comes to developments in Sweden nationally."