What It's Like To Be Poor – And Make Terrible Decisions

There are many reasons why the poor are 'poor' or why the middle-class is deteriorating into a state of being 'poor' but as this first-person account of the self-defeating feedback loops of poverty's trap harrowingly suggests, escaping that social strata (as we noted previously) is becoming ever more difficult. Of course, a George Carlin noted previously, "the only true American value is… buying things," which leaves the 'poor' increasingly losing hope. "Rest is a luxury for the rich," the author notes, "planning is not in the mix," as she explains why poverty has forced her to "make terrible decisions." 

Authored by @KillerMartinis (Killer Martinis blog) via The Burning Platform blog,

Why I Make Terrible Decisions, or, poverty thoughts

There's no way to structure this coherently. They are random observations that might help explain the mental processes. But often, I think that we look at the academic problems of poverty and have no idea of the why. We know the what and the how, and we can see systemic problems, but it's rare to have a poor person actually explain it on their own behalf. So this is me doing that, sort of.

Rest is a luxury for the rich. I get up at 6AM, go to school (I have a full courseload, but I only have to go to two in-person classes) then work, then I get the kids, then I pick up my husband, then I have half an hour to change and go to Job 2. I get home from that at around 1230AM, then I have the rest of my classes and work to tend to. I'm in bed by 3. This isn't every day, I have two days off a week from each of my obligations. I use that time to clean the house and soothe Mr. Martini and see the kids for longer than an hour and catch up on schoolwork. Those nights I'm in bed by midnight, but if I go to bed too early I won't be able to stay up the other nights because I'll fuck my pattern up, and I drive an hour home from Job 2 so I can't afford to be sleepy. I never get a day off from work unless I am fairly sick. It doesn't leave you much room to think about what you are doing, only to attend to the next thing and the next. Planning isn't in the mix.

When I was pregnant the first time, I was living in a weekly motel for some time. I had a minifridge with no freezer and a microwave. I was on WIC. I ate peanut butter from the jar and frozen burritos because they were 12/$2. Had I had a stove, I couldn't have made beef burritos that cheaply. And I needed the meat, I was pregnant. I might not have had any prenatal care, but I am intelligent enough to eat protein and iron whilst knocked up.

I know how to cook. I had to take Home Ec to graduate high school. Most people on my level didn't. Broccoli is intimidating. You have to have a working stove, and pots, and spices, and you'll have to do the dishes no matter how tired you are or they'll attract bugs. It is a huge new skill for a lot of people. That's not great, but it's true. And if you fuck it up, you could make your family sick. We have learned not to try too hard to be middle-class. It never works out well and always makes you feel worse for having tried and failed yet again. Better not to try. It makes more sense to get food that you know will be palatable and cheap and that keeps well. Junk food is a pleasure that we are allowed to have; why would we give that up? We have very few of them.

The closest Planned Parenthood to me is three hours. That's a lot of money in gas. Lots of women can't afford that, and even if you live near one you probably don't want to be seen coming in and out in a lot of areas. We're aware that we are not "having kids," we're "breeding." We have kids for much the same reasons that I imagine rich people do. Urge to propagate and all. Nobody likes poor people procreating, but they judge abortion even harder.

Convenience food is just that. And we are not allowed many conveniences. Especially since the Patriot Act passed, it's hard to get a bank account. But without one, you spend a lot of time figuring out where to cash a check and get money orders to pay bills. Most motels now have a no-credit-card-no-room policy. I wandered around SF for five hours in the rain once with nearly a thousand dollars on me and could not rent a room even if I gave them a $500 cash deposit and surrendered my cell phone to the desk to hold as surety.

Nobody gives enough thought to depression. You have to understand that we know that we will never not feel tired. We will never feel hopeful. We will never get a vacation. Ever. We know that the very act of being poor guarantees that we will never not be poor. It doesn't give us much reason to improve ourselves. We don't apply for jobs because we know we can't afford to look nice enough to hold them. I would make a super legal secretary, but I've been turned down more than once because I "don't fit the image of the firm," which is a nice way of saying "gtfo, pov." I am good enough to cook the food, hidden away in the kitchen, but my boss won't make me a server because I don't "fit the corporate image." I am not beautiful. I have missing teeth and skin that looks like it will when you live on b12 and coffee and nicotine and no sleep. Beauty is a thing you get when you can afford it, and that's how you get the job that you need in order to be beautiful. There isn't much point trying.

Cooking attracts roaches. Nobody realizes that. I've spent a lot of hours impaling roach bodies and leaving them out on toothpick pikes to discourage others from entering. It doesn't work, but is amusing.

"Free" only exists for rich people. It's great that there's a bowl of condoms at my school, but most poor people will never set foot on a college campus. We don't belong there. There's a clinic? Great! There's still a copay. We're not going. Besides, all they'll tell you at the clinic is that you need to see a specialist, which seriously? Might as well be located on Mars for how accessible it is. "Low-cost" and "sliding scale" sounds like "money you have to spend" to me, and they can't actually help you anyway.

I smoke. It's expensive. It's also the best option. You see, I am always, always exhausted. It's a stimulant. When I am too tired to walk one more step, I can smoke and go for another hour. When I am enraged and beaten down and incapable of accomplishing one more thing, I can smoke and I feel a little better, just for a minute. It is the only relaxation I am allowed. It is not a good decision, but it is the only one that I have access to. It is the only thing I have found that keeps me from collapsing or exploding.

I make a lot of poor financial decisions. None of them matter, in the long term. I will never not be poor, so what does it matter if I don't pay a thing and a half this week instead of just one thing? It's not like the sacrifice will result in improved circumstances; the thing holding me back isn't that I blow five bucks at Wendy's. It's that now that I have proven that I am a Poor Person that is all that I am or eve
r will be. It is not worth it to me to live a bleak life devoid of small pleasures so that one day I can make a single large purchase. I will never have large pleasures to hold on to. There's a certain pull to live what bits of life you can while there's money in your pocket, because no matter how responsible you are you will be broke in three days anyway. When you never have enough money it ceases to have meaning. I imagine having a lot of it is the same thing.

Poverty is bleak and cuts off your long-term brain. It's why you see people with four different babydaddies instead of one. You grab a bit of connection wherever you can to survive. You have no idea how strong the pull to feel worthwhile is. It's more basic than food. You go to these people who make you feel lovely for an hour that one time, and that's all you get. You're probably not compatible with them for anything long-term, but right this minute they can make you feel powerful and valuable. It does not matter what will happen in a month. Whatever happens in a month is probably going to be just about as indifferent as whatever happened today or last week. None of it matters. We don't plan long-term because if we do we'll just get our hearts broken. It's best not to hope. You just take what you can get as you spot it.

I am not asking for sympathy. I am just trying to explain, on a human level, how it is that people make what look from the outside like awful decisions. This is what our lives are like, and here are our defense mechanisms, and here is why we think differently. It's certainly self-defeating, but it's safer. That's all. I hope it helps make sense of it.

 

############################################

And Jim Quinn's Burning Platform blog notes It appears that she’s been getting lots and lots of responses to her letter, good and bad. 

Here’s her response to people accusing her of bitching.

DEAR GUY WITH HURT FEELINGS;

 

So I have been wandering the Internet to see where this piece I wrote wound up. And I am rather amused at one fairly standard reaction:

 

Oh, typical poor person bitching. Rich people work hard too. If you don’t think positively nothing good will ever happen.

 

Here is a disclaimer, and now that it is on the Internet with my name on it I’ll hear no more about this:

 

Yes. Rich people work hard too. Nobody is telling you that you are lazy, rich people. What I am saying is that I am not lazy. That is a different thing entirely than impugning your work ethic. It’s actually got nothing to do with you at all. I do appreciate your need to read some thoughts from someone who is poor and make it about your relative merit, but you should know that it kind of makes you look like you struggle with reading comprehension. Because it’s not about that. I actually specifically said that more than once. I know, it is frustrating to see conversations happening and know that your opinions are considered irrelevant.

 

Try to repress the urge to tell me that you do more physical labor than I do in a day, though, because it makes you look silly. I have never met a wealthy person washing dishes at Denny’s. I am sure one exists, but I don’t think we can go assuming that the majority of people who live in the middle and upper classes are working on shop floors or in warehouses.

 

And about the happy shiny attitude: are you seriously telling me that you legitimately think that the thing that is stopping me from getting a lucky break is that I simply don’t believe hard enough? Tell me, if I clap my hands and really believe, can I bring fairies back from the brink as well? Do you think I am stupid? I am not. I can read the news. I know that class mobility is decreasing and wealth is stratifying and for many of us, hope is going to stay unfulfilled. You do not get to tell me how to process the fact that “success” is a crapshoot in this America, because I can tell you that hard work and talent alone aren’t going to do it.

 

There’s one decent job opening for every hundred talented and hardworking people. If you happen to be hardworking but not particularly skilled, your life will most likely consist of making someone’s shareholders happy. It will be degrading and exhausting. And you are fucking high if you think that simply thinking positive thoughts will change the nature of the economy. That is not how the economy works.

 

Your implication that I am too stupid to know that is laughable, because your average ten-year-old in the ghetto knows that the game is rigged. Fuck you for demanding that I pretend it isn’t to make you a little more comfortable. It isn’t going to happen. I don’t mind, particularly, that we have settled on this system. It’ll change again soon. Rich people know that; it’s why they’re retreating into guarded conclaves and hiring extra security for their malls. But you don’t get to pretend that this system we have decided on, the one in which we are pretending that we have never heard of the Gilded Age so that we don’t have to acknowledge that we are doing it again, is anything like fair or meritocratic. That is patent bullshit. Stop it. I do not mind talented people having money. I mind stupid people with money saying that they must be smart because: meritocracy. That is terrible logic.

 

Here is the thing: nobody lives without something in their lives that grounds them. It might be something simple and pure, or something big and complex. But there is something, because human nature makes us find whatever is available to find a reason to live. My point is not that it isn’t true, my point is that if the thing that you have to hold onto is that at least other people have it worse, it’s kind of depressing. It’s survival. It is not uplifting. You can’t simply walk into the life of someone who is actually chemically depressed and demand that they paste a fucking grin on. Rather, you can, but you’re an asshole. And double the assholery if you can afford access to medicine and sleep and the things that we would need to solve the depression and you still stand there telling me to find a pair of bootstraps and just Think Positive!

 

Perhaps, friend, you could try reading the damn news before you tell me that how I should feel about the way the economy functions and my place in it. I think your idea of the economy must be pretty simplistic. I do not think that word means what you think it means.

 

Oh, and one more thing: It is entirely possible, especially since about a decade ago, for someone who was raised in a higher class to be poor. I am one of those people. The fact that I didn’t grow up wondering if I would eat does not negate that I have spent much of my adult life with that concern. So, in conclusion, a giant and full-throated Fuck You to the people who are attempting to avoid the conversation by parsing whether or not my vocabulary means that I am insufficiently poor to be allowed to speak. Because I know goddamned well you wouldn’t have even read my first post if I were speaking in my vernacular.

 

Please, if you are one of the people who want to discuss whether or not I qualify as working poor because I ha
ve a capable brain as though the two have anything to do with each other, feel free to find something more productive to do
. You could watch delightful children’s programming, or read Lemony Snicket. There are plenty of coloring books and if you get the good crayons you’ll have fun. Maybe you could hitch a ride to someplace with skeeball and tickets which you could exchange for prizes. If you are feeling pretentious you could try reading the kids’ version of Rousseau or Toqueville. I would suggest the original versions, but I worry that you might miss those points. They tended to speak in their vernacular, too.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/2aekSzwsF44/story01.htm Tyler Durden

What It’s Like To Be Poor – And Make Terrible Decisions

There are many reasons why the poor are 'poor' or why the middle-class is deteriorating into a state of being 'poor' but as this first-person account of the self-defeating feedback loops of poverty's trap harrowingly suggests, escaping that social strata (as we noted previously) is becoming ever more difficult. Of course, a George Carlin noted previously, "the only true American value is… buying things," which leaves the 'poor' increasingly losing hope. "Rest is a luxury for the rich," the author notes, "planning is not in the mix," as she explains why poverty has forced her to "make terrible decisions." 

Authored by @KillerMartinis (Killer Martinis blog) via The Burning Platform blog,

Why I Make Terrible Decisions, or, poverty thoughts

There's no way to structure this coherently. They are random observations that might help explain the mental processes. But often, I think that we look at the academic problems of poverty and have no idea of the why. We know the what and the how, and we can see systemic problems, but it's rare to have a poor person actually explain it on their own behalf. So this is me doing that, sort of.

Rest is a luxury for the rich. I get up at 6AM, go to school (I have a full courseload, but I only have to go to two in-person classes) then work, then I get the kids, then I pick up my husband, then I have half an hour to change and go to Job 2. I get home from that at around 1230AM, then I have the rest of my classes and work to tend to. I'm in bed by 3. This isn't every day, I have two days off a week from each of my obligations. I use that time to clean the house and soothe Mr. Martini and see the kids for longer than an hour and catch up on schoolwork. Those nights I'm in bed by midnight, but if I go to bed too early I won't be able to stay up the other nights because I'll fuck my pattern up, and I drive an hour home from Job 2 so I can't afford to be sleepy. I never get a day off from work unless I am fairly sick. It doesn't leave you much room to think about what you are doing, only to attend to the next thing and the next. Planning isn't in the mix.

When I was pregnant the first time, I was living in a weekly motel for some time. I had a minifridge with no freezer and a microwave. I was on WIC. I ate peanut butter from the jar and frozen burritos because they were 12/$2. Had I had a stove, I couldn't have made beef burritos that cheaply. And I needed the meat, I was pregnant. I might not have had any prenatal care, but I am intelligent enough to eat protein and iron whilst knocked up.

I know how to cook. I had to take Home Ec to graduate high school. Most people on my level didn't. Broccoli is intimidating. You have to have a working stove, and pots, and spices, and you'll have to do the dishes no matter how tired you are or they'll attract bugs. It is a huge new skill for a lot of people. That's not great, but it's true. And if you fuck it up, you could make your family sick. We have learned not to try too hard to be middle-class. It never works out well and always makes you feel worse for having tried and failed yet again. Better not to try. It makes more sense to get food that you know will be palatable and cheap and that keeps well. Junk food is a pleasure that we are allowed to have; why would we give that up? We have very few of them.

The closest Planned Parenthood to me is three hours. That's a lot of money in gas. Lots of women can't afford that, and even if you live near one you probably don't want to be seen coming in and out in a lot of areas. We're aware that we are not "having kids," we're "breeding." We have kids for much the same reasons that I imagine rich people do. Urge to propagate and all. Nobody likes poor people procreating, but they judge abortion even harder.

Convenience food is just that. And we are not allowed many conveniences. Especially since the Patriot Act passed, it's hard to get a bank account. But without one, you spend a lot of time figuring out where to cash a check and get money orders to pay bills. Most motels now have a no-credit-card-no-room policy. I wandered around SF for five hours in the rain once with nearly a thousand dollars on me and could not rent a room even if I gave them a $500 cash deposit and surrendered my cell phone to the desk to hold as surety.

Nobody gives enough thought to depression. You have to understand that we know that we will never not feel tired. We will never feel hopeful. We will never get a vacation. Ever. We know that the very act of being poor guarantees that we will never not be poor. It doesn't give us much reason to improve ourselves. We don't apply for jobs because we know we can't afford to look nice enough to hold them. I would make a super legal secretary, but I've been turned down more than once because I "don't fit the image of the firm," which is a nice way of saying "gtfo, pov." I am good enough to cook the food, hidden away in the kitchen, but my boss won't make me a server because I don't "fit the corporate image." I am not beautiful. I have missing teeth and skin that looks like it will when you live on b12 and coffee and nicotine and no sleep. Beauty is a thing you get when you can afford it, and that's how you get the job that you need in order to be beautiful. There isn't much point trying.

Cooking attracts roaches. Nobody realizes that. I've spent a lot of hours impaling roach bodies and leaving them out on toothpick pikes to discourage others from entering. It doesn't work, but is amusing.

"Free" only exists for rich people. It's great that there's a bowl of condoms at my school, but most poor people will never set foot on a college campus. We don't belong there. There's a clinic? Great! There's still a copay. We're not going. Besides, all they'll tell you at the clinic is that you need to see a specialist, which seriously? Might as well be located on Mars for how accessible it is. "Low-cost" and "sliding scale" sounds like "money you have to spend" to me, and they can't actually help you anyway.

I smoke. It's expensive. It's also the best option. You see, I am always, always exhausted. It's a stimulant. When I am too tired to walk one more step, I can smoke and go for another hour. When I am enraged and beaten down and incapable of accomplishing one more thing, I can smoke and I feel a little better, just for a minute. It is the only relaxation I am allowed. It is not a good decision, but it is the only one that I have access to. It is the only thing I have found that keeps me from collapsing or exploding.

I make a lot of poor financial decisions. None of them matter, in the long term. I will never not be poor, so what does it matter if I don't pay a thing and a half this week instead of just one thing? It's not like the sacrifice will result in improved circumstances; the thing holding me back isn't that I blow five bucks at Wendy's. It's that now that I have proven that I am a Poor Person that is all that I am or ever will be. It is not worth it to me to live a bleak life devoid of small pleasures so that one day I can make a single large purchase. I will never have large pleasures to hold on to. There's a certain pull to live what bits of life you can while there's money in your pocket, because no matter how responsible you are you will be broke in three days anyway. When you never have enough money it ceases to have meaning. I imagine having a lot of it is the same thing.

Poverty is bleak and cuts off your long-term brain. It's why you see people with four different babydaddies instead of one. You grab a bit of connection wherever you can to survive. You have no idea how strong the pull to feel worthwhile is. It's more basic than food. You go to these people who make you feel lovely for an hour that one time, and that's all you get. You're probably not compatible with them for anything long-term, but right this minute they can make you feel powerful and valuable. It does not matter what will happen in a month. Whatever happens in a month is probably going to be just about as indifferent as whatever happened today or last week. None of it matters. We don't plan long-term because if we do we'll just get our hearts broken. It's best not to hope. You just take what you can get as you spot it.

I am not asking for sympathy. I am just trying to explain, on a human level, how it is that people make what look from the outside like awful decisions. This is what our lives are like, and here are our defense mechanisms, and here is why we think differently. It's certainly self-defeating, but it's safer. That's all. I hope it helps make sense of it.

 

############################################

And Jim Quinn's Burning Platform blog notes It appears that she’s been getting lots and lots of responses to her letter, good and bad. 

Here’s her response to people accusing her of bitching.

DEAR GUY WITH HURT FEELINGS;

 

So I have been wandering the Internet to see where this piece I wrote wound up. And I am rather amused at one fairly standard reaction:

 

Oh, typical poor person bitching. Rich people work hard too. If you don’t think positively nothing good will ever happen.

 

Here is a disclaimer, and now that it is on the Internet with my name on it I’ll hear no more about this:

 

Yes. Rich people work hard too. Nobody is telling you that you are lazy, rich people. What I am saying is that I am not lazy. That is a different thing entirely than impugning your work ethic. It’s actually got nothing to do with you at all. I do appreciate your need to read some thoughts from someone who is poor and make it about your relative merit, but you should know that it kind of makes you look like you struggle with reading comprehension. Because it’s not about that. I actually specifically said that more than once. I know, it is frustrating to see conversations happening and know that your opinions are considered irrelevant.

 

Try to repress the urge to tell me that you do more physical labor than I do in a day, though, because it makes you look silly. I have never met a wealthy person washing dishes at Denny’s. I am sure one exists, but I don’t think we can go assuming that the majority of people who live in the middle and upper classes are working on shop floors or in warehouses.

 

And about the happy shiny attitude: are you seriously telling me that you legitimately think that the thing that is stopping me from getting a lucky break is that I simply don’t believe hard enough? Tell me, if I clap my hands and really believe, can I bring fairies back from the brink as well? Do you think I am stupid? I am not. I can read the news. I know that class mobility is decreasing and wealth is stratifying and for many of us, hope is going to stay unfulfilled. You do not get to tell me how to process the fact that “success” is a crapshoot in this America, because I can tell you that hard work and talent alone aren’t going to do it.

 

There’s one decent job opening for every hundred talented and hardworking people. If you happen to be hardworking but not particularly skilled, your life will most likely consist of making someone’s shareholders happy. It will be degrading and exhausting. And you are fucking high if you think that simply thinking positive thoughts will change the nature of the economy. That is not how the economy works.

 

Your implication that I am too stupid to know that is laughable, because your average ten-year-old in the ghetto knows that the game is rigged. Fuck you for demanding that I pretend it isn’t to make you a little more comfortable. It isn’t going to happen. I don’t mind, particularly, that we have settled on this system. It’ll change again soon. Rich people know that; it’s why they’re retreating into guarded conclaves and hiring extra security for their malls. But you don’t get to pretend that this system we have decided on, the one in which we are pretending that we have never heard of the Gilded Age so that we don’t have to acknowledge that we are doing it again, is anything like fair or meritocratic. That is patent bullshit. Stop it. I do not mind talented people having money. I mind stupid people with money saying that they must be smart because: meritocracy. That is terrible logic.

 

Here is the thing: nobody lives without something in their lives that grounds them. It might be something simple and pure, or something big and complex. But there is something, because human nature makes us find whatever is available to find a reason to live. My point is not that it isn’t true, my point is that if the thing that you have to hold onto is that at least other people have it worse, it’s kind of depressing. It’s survival. It is not uplifting. You can’t simply walk into the life of someone who is actually chemically depressed and demand that they paste a fucking grin on. Rather, you can, but you’re an asshole. And double the assholery if you can afford access to medicine and sleep and the things that we would need to solve the depression and you still stand there telling me to find a pair of bootstraps and just Think Positive!

 

Perhaps, friend, you could try reading the damn news before you tell me that how I should feel about the way the economy functions and my place in it. I think your idea of the economy must be pretty simplistic. I do not think that word means what you think it means.

 

Oh, and one more thing: It is entirely possible, especially since about a decade ago, for someone who was raised in a higher class to be poor. I am one of those people. The fact that I didn’t grow up wondering if I would eat does not negate that I have spent much of my adult life with that concern. So, in conclusion, a giant and full-throated Fuck You to the people who are attempting to avoid the conversation by parsing whether or not my vocabulary means that I am insufficiently poor to be allowed to speak. Because I know goddamned well you wouldn’t have even read my first post if I were speaking in my vernacular.

 

Please, if you are one of the people who want to discuss whether or not I qualify as working poor because I have a capable brain as though the two have anything to do with each other, feel free to find something more productive to do. You could watch delightful children’s programming, or read Lemony Snicket. There are plenty of coloring books and if you get the good crayons you’ll have fun. Maybe you could hitch a ride to someplace with skeeball and tickets which you could exchange for prizes. If you are feeling pretentious you could try reading the kids’ version of Rousseau or Toqueville. I would suggest the original versions, but I worry that you might miss those points. They tended to speak in their vernacular, too.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/2aekSzwsF44/story01.htm Tyler Durden

How Much Do My Sins Costs?

Federal and local governments are taxing our vices…big time. These taxes, known as “sin tax”, generate revenue and affect purchases. So, how much would my smokes cost without all the taxes?

 

Sin Taxes: Taxing Your Vices

Image source: www.online-accounting-degrees.net


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/4VJ3IGujvkE/story01.htm Tyler Durden

Nope, No Bubble Here…

Sentiment, according to Citi’s proprietary model, has now reached levels of euphoria not seen since the peak of the bubble in 2007/8, macro-economic data is deteriorating rapidly, and as Tobias Levkovich notes, intra-stock correlation is also posting a worrisome sign.

But perhaps, more than any other indication of just how far ahead of itself the US equity market has gone is the total and utter disconnect the following 8 charts show between aggregate and sector micro-fundamentals and the share price which is supposed to represent their expectations. With net profits being helped by a meaningfully lower effective tax rate and sharply lower interest expense, primarily assisting the Financials sector, expecting these two crucial pillars of support to be sustained is simply folly.  

In the interests of plausible deniability, look away… we highly suggest Bullard, the QEeen, and the bulk of the mainstream financial press, look away

 

Euphoria is here…

 

As US macro-fundamentals deteriorate…and are the worst of all global indices year-to-date!!

 

But – ignoring for a moment the bullshit bloviated day after day by your friendly local commission-taker – bottom-up the picture is even worse…

 

 

But apart from that BTFATH!!!


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Sbd5ib9uBRw/story01.htm Tyler Durden

A (Visual) Tale of 25 Cities (And Half The World's GDP)

With more people in the world living in cities than ever before, cities’ share of global GDP is rising: 25 cities account for approximately 50% of the world’s GDP. But not all cities can be winners, and not all are destined for greatness. The following smorgasbord of charts highlight how successful cities have typically had natural advantages such as location, time zone and resources; but more importantly, to remain successful they need education, a skilled workforce, strong property rights, a broad base of industries and in some cases, policies aimed at attracting capital and talent. Conversely, As Goldman notes, when cities fail it tends to be either because of an overreliance on an industry that has seen a dramatic shift in its profitability, or as a result of the vested interests of those that control them.

 

It took 1000 years for Rome to be topples as the world’s largest (by population) city…

 

The following 12 charts suggest some cities are on the ascent, some are bubbling dangerously, and others have reached ‘peak’ citiness…

 

Source: Credit Suisse and Goldman Sachs


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Mh_iLE6zNCc/story01.htm Tyler Durden

A (Visual) Tale of 25 Cities (And Half The World’s GDP)

With more people in the world living in cities than ever before, cities’ share of global GDP is rising: 25 cities account for approximately 50% of the world’s GDP. But not all cities can be winners, and not all are destined for greatness. The following smorgasbord of charts highlight how successful cities have typically had natural advantages such as location, time zone and resources; but more importantly, to remain successful they need education, a skilled workforce, strong property rights, a broad base of industries and in some cases, policies aimed at attracting capital and talent. Conversely, As Goldman notes, when cities fail it tends to be either because of an overreliance on an industry that has seen a dramatic shift in its profitability, or as a result of the vested interests of those that control them.

 

It took 1000 years for Rome to be topples as the world’s largest (by population) city…

 

The following 12 charts suggest some cities are on the ascent, some are bubbling dangerously, and others have reached ‘peak’ citiness…

 

Source: Credit Suisse and Goldman Sachs


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Mh_iLE6zNCc/story01.htm Tyler Durden

Killing The "We Paid Our Taxes; We Earned Our Benefits" Social Security Ponzi Meme

Submitted by Gary Galles of the Ludwig von Mises Institute,

“We paid our Social Security and Medicare taxes; we earned our benefits.” It is that belief among senior citizens that President Obama was pandering to when, in his second inaugural address, he claimed that those programs “strengthen us. They do not make us a nation of takers.”

If Social Security and Medicare both involved people voluntarily financing their own benefits, an argument could be made for seniors’ “earned benefits” view. But they have not. They have redistributed tens of trillions of dollars of wealth to themselves from those younger.

Social Security and Medicare have transferred those trillions because they have been partial Ponzi schemes.

After Social Security’s creation, those in or near retirement got benefits far exceeding their costs (Ida Mae Fuller, the first Social Security recipient, got 462 times what she and her employer together paid in “contributions”). Those benefits in excess of their taxes paid inherently forced future Americans to pick up the tab for the difference. And the program’s almost unthinkable unfunded liabilities are no less a burden on later generations because earlier generations financed some of their own benefits, or because the government has consistently lied that they have paid their own way.

Since its creation, Social Security has been expanded multiple times. Each expansion meant those already retired paid no added taxes, and those near retirement paid more for only a few years. But both groups received increased benefits throughout retirement, increasing the unfunded benefits whose burdens had to be borne by later generations. Thus, each such expansion started another Ponzi cycle benefiting older Americans at others’ expense.

Social Security benefits have been dramatically increased. They doubled between 1950 and 1952. They were raised 15 percent in 1970, 10 percent in 1971, and 20 percent in 1972, in a heated competition to buy the elderly vote. Benefits were tied to a measure that effectively double-counted inflation and even now, benefits are over-indexed to inflation, raising real benefit levels over time.

Disability and dependents’ benefits were added by 1960. Medicare was added in 1966, and benefits have been expanded (e.g., Medicare Part B, only one-quarter funded by recipients, and Part D’s prescription drug benefit, only one-eighth funded by recipients).

The massive expansion of Social Security is evident from the growing tax burden since its $60 per year initial maximum (for employees and employers combined). Tax rates have risen and been applied to more earnings, with Social Security now taking a combined 12.4 percent of earnings up to $113,700 (and Medicare’s 2.9 percent combined rate applies to all earnings, plus a 0.9 percent surtax beyond $200,000 of earnings).

Those multiple Ponzi giveaways to earlier recipients created Social Security’s 13-digit unfunded liability and Medicare’s far larger hole. And despite politicians’ repeated, heated denials, many studies have confirmed the results.

One recent study of lifetime payroll taxes and benefits comes from the Urban Institute. For Medicare, they calculated that (in 2012 dollars) an average-wage-earning male would get $180,000 in benefits, but pay only $61,000 in taxes — “earning” only about one-third of benefits received. A similarly situated female does even better. The cumulative “excess” benefits equal $105 trillion, with net benefits increasing over time.

The Urban Institute’s calculations revealed a different situation for Social Security. An average-earning male who retired in 2010 will receive $277,000 in lifetime benefits, $23,000 less than his lifetime taxes, while for females, their $302,000 in lifetime benefits approximates their lifetime taxes. And things are getting worse. By 2030, that man will be “shorted” 16 cents (10 cents for women) of every lifetime tax dollar paid.

While those results resoundingly reject “we earned it” rhetoric for Medicare, the Social Security results, with new retirees getting less than they paid in, could be spun as “proving” Social Security is not a Ponzi scheme. However, that would be false. The reason is that Medicare is still in its expansion phase, as with Medicare Part D, piling up still bigger future IOUs. However, Social Security has essentially run out of new expansion tricks, although liberal groups are pushing to apply Social Security taxes to far more income as one last means of robbing those younger to delay the day of reckoning. That simply means that we are being forced to start facing the full consequences of the redistribution that was started in 1935. That is, the current bad deal Social Security offers retirees is just the result of the fact that it has been a Ponzi scheme for generations, and someone must get stuck “holding the bag.”

In fact, perhaps the best description of the current Social Security and Medicare situation comes from Henry Hazlitt, long ago, in Economics in One Lesson:

Today is already the tomorrow which the bad economist yesterday urged us to ignore. The long-run consequences of some economic policies may become evident in a few months. Others may not become evident for several years. Still others may not become evident for decades. But in every case those long-run consequences are contained in the policy as surely as the hen was in the egg, the flower in the seed.

Social Security and Medicare’s generational high-jacking has become “the third rail of politics” in large part because seniors want to believe that they paid their own way. But they have not. They have only paid for part of what they have gotten. The rest has indeed been a Ponzi scheme. And as Social Security is already revealing, the future cannot be put off forever, however much wishful thinking is involved. Some are already being forced to confront the exploding pot of IOUs involved, and it will get much worse.

The supposedly “most successful government program in the history of the world,” according to Harry Reid, has turned seniors into serious takers. The fact that some of them are now starting to share the pain caused by those programs does not contradict that fact. It just shows the dark side of the most successful Ponzi scheme in the history of the world.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/_21wP0-5LlM/story01.htm Tyler Durden

Killing The “We Paid Our Taxes; We Earned Our Benefits” Social Security Ponzi Meme

Submitted by Gary Galles of the Ludwig von Mises Institute,

“We paid our Social Security and Medicare taxes; we earned our benefits.” It is that belief among senior citizens that President Obama was pandering to when, in his second inaugural address, he claimed that those programs “strengthen us. They do not make us a nation of takers.”

If Social Security and Medicare both involved people voluntarily financing their own benefits, an argument could be made for seniors’ “earned benefits” view. But they have not. They have redistributed tens of trillions of dollars of wealth to themselves from those younger.

Social Security and Medicare have transferred those trillions because they have been partial Ponzi schemes.

After Social Security’s creation, those in or near retirement got benefits far exceeding their costs (Ida Mae Fuller, the first Social Security recipient, got 462 times what she and her employer together paid in “contributions”). Those benefits in excess of their taxes paid inherently forced future Americans to pick up the tab for the difference. And the program’s almost unthinkable unfunded liabilities are no less a burden on later generations because earlier generations financed some of their own benefits, or because the government has consistently lied that they have paid their own way.

Since its creation, Social Security has been expanded multiple times. Each expansion meant those already retired paid no added taxes, and those near retirement paid more for only a few years. But both groups received increased benefits throughout retirement, increasing the unfunded benefits whose burdens had to be borne by later generations. Thus, each such expansion started another Ponzi cycle benefiting older Americans at others’ expense.

Social Security benefits have been dramatically increased. They doubled between 1950 and 1952. They were raised 15 percent in 1970, 10 percent in 1971, and 20 percent in 1972, in a heated competition to buy the elderly vote. Benefits were tied to a measure that effectively double-counted inflation and even now, benefits are over-indexed to inflation, raising real benefit levels over time.

Disability and dependents’ benefits were added by 1960. Medicare was added in 1966, and benefits have been expanded (e.g., Medicare Part B, only one-quarter funded by recipients, and Part D’s prescription drug benefit, only one-eighth funded by recipients).

The massive expansion of Social Security is evident from the growing tax burden since its $60 per year initial maximum (for employees and employers combined). Tax rates have risen and been applied to more earnings, with Social Security now taking a combined 12.4 percent of earnings up to $113,700 (and Medicare’s 2.9 percent combined rate applies to all earnings, plus a 0.9 percent surtax beyond $200,000 of earnings).

Those multiple Ponzi giveaways to earlier recipients created Social Security’s 13-digit unfunded liability and Medicare’s far larger hole. And despite politicians’ repeated, heated denials, many studies have confirmed the results.

One recent study of lifetime payroll taxes and benefits comes from the Urban Institute. For Medicare, they calculated that (in 2012 dollars) an average-wage-earning male would get $180,000 in benefits, but pay only $61,000 in taxes — “earning” only about one-third of benefits received. A similarly situated female does even better. The cumulative “excess” benefits equal $105 trillion, with net benefits increasing over time.

The Urban Institute’s calculations revealed a different situation for Social Security. An average-earning male who retired in 2010 will receive $277,000 in lifetime benefits, $23,000 less than his lifetime taxes, while for females, their $302,000 in lifetime benefits approximates their lifetime taxes. And things are getting worse. By 2030, that man will be “shorted” 16 cents (10 cents for women) of every lifetime tax dollar paid.

While those results resoundingly reject “we earned it” rhetoric for Medicare, the Social Security results, with new retirees getting less than they paid in, could be spun as “proving” Social Security is not a Ponzi scheme. However, that would be false. The reason is that Medicare is still in its expansion phase, as with Medicare Part D, piling up still bigger future IOUs. However, Social Security has essentially run out of new expansion tricks, although liberal groups are pushing to apply Social Security taxes to far more income as one last means of robbing those younger to delay the day of reckoning. That simply means that we are being forced to start facing the full consequences of the redistribution that was started in 1935. That is, the current bad deal Social Security offers retirees is just the result of the fact that it has been a Ponzi scheme for generations, and someone must get stuck “holding the bag.”

In fact, perhaps the best description of the current Social Security and Medicare situation comes from Henry Hazlitt, long ago, in Economics in One Lesson:

Today is already the tomorrow which the bad economist yesterday urged us to ignore. The long-run consequences of some economic policies may become evident in a few months. Others may not become evident for several years. Still others may not become evident for decades. But in every case those long-run consequences are contained in the policy as surely as the hen was in the egg, the flower in the seed.

Social Security and Medicare’s generational high-jacking has become “the third rail of politics” in large part because seniors want to believe that they paid their own way. But they have not. They have only paid for part of what they have gotten. The rest has indeed been a Ponzi scheme. And as Social Security is already revealing, the future cannot be put off forever, however much wishful thinking is involved. Some are already being forced to confront the exploding pot of IOUs involved, and it will get much worse.

The supposedly “most successful government program in the history of the world,” according to Harry Reid, has turned seniors into serious takers. The fact that some of them are now starting to share the pain caused by those programs does not contradict that fact. It just shows the dark side of the most successful Ponzi scheme in the history of the world.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/_21wP0-5LlM/story01.htm Tyler Durden