How a Single Statistic Upended the American Economy

The official statistics on America’s economy are grim. The rich just keep getting richer. There’s barely any progress on poverty. But dig into the data and you’ll find that there's an enormous caveat.

The government's record-keeping system, which dates back to 1947, has a major shortcoming: it doesn’t actually count most of the things the government does to help lift people out of poverty. As a result, a low-income household that may, once government aid is factored in, live off the equivalent of nearly $50,000 a year can show up on paper as having had less than $5,000.

These statistics not only mislead us about poverty but also distort our perception of wealth. The reason: because the data also doesn’t factor in the money that people lose to taxes. That has huge implications for our perceptions of inequality. Government data suggests that the top 20% of Americans earn 60 times more than the bottom 20%. But once the numbers are adjusted to factor in taxes and government benefits, the top 20% is only four times higher than the bottom 20%.

Upon closer inspection, it turns out that America’s rich people aren’t as rich as many of us think and America’s poor people aren’t as poor as many of us think. Which, taken together, kind of ruins everyone’s talking points. One more reminder of why context matters.

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[KiteandKeyMedia]

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[jaygold]

This is b.s. above. Poor people don't get $30, 00 in government benefits. This is nonsense above.

[guitaristAustin]

This video seems misleading. The fact is shit is getting worse no matter the numbers.

[glenchilada]

Except that you can't collect social security or medicare unless your elderly or disabled. It sounds like you're assuming everyone who falls below the poverty line income level collects those services.

[metrotcb]

I fit nowhere near these areas, no wealthy, never had any Gov programs

[psikeyhackr]

No accounting for the depreciation of durable consumer goods. How many automobiles have Americans trashed since Sputnik?

[donnaleist]

YOU TOTALLY LEAVE OUT THOSE WHO EXIST RIGHT ABOVE THE
"POVERTY LEVEL" YET HEAVILY TAXED. THEY LIVE IN LOWER CONDITIONS THAN THE ONES ACTUALLY COUNTED AS BELOW THE POVERTY LEVEL RECEIVING THAT +$50K IN BENEFITS.
THEY DON'T COUNT, RIGHT?

[snakeplisken]

Every one of your statistics was consciously misinterpreted and misleading.

[aint_just_whistlin_dixie]

5:00 Give an honorary Nobel Prize to the person who dreamed up the newspaper headline, "Nation's Pundits Not Sure What to Be Outraged By" Hilarious.

[stichmoellis]

The numbers in this video are also misleading. When I think of low income, I think of people below age 65. However, the statistics in this video are from the book "The Myth of Inequality." On page 20 it shows that the lowest quintile households in 2017 got, on average, $10, 958 in old age Social Security benefits, $7, 986 in Medicare benefits, and $2, 575 in Social Security disability benefits, for a total of over $21, 500 in old age or disability benefits. Plus $9, 634 in Medicaid benefits, some portion of which is for senior citizens. Most low income people don't get these senior citizen benefits.

The book and video are correct that incomes are undercounted by the census bureau. But half of their "corrections" don't apply to most low income households.

[thedalillama]

Sorry, but we should NOT count free money when deciding if people are making progress.

[JoseRodriguez-qdcu]

Well, if we know that a mistake has been done get it fix.

[billlhooo]

yeah people can't calculated that we have 330million people who lived in America and most people don't earn 100k per year. Also cost of an area where they lived at may cost less or more.

[neftalilomeli]

It's about lobbyist... Legal bribing

[NAUM]

Those darn bureaucratic accountants can't even do their job correctly.

[Invictus-vruu]

Absolute nonsense. The Census Bureau took its first crack at valuing non-cash benefits in 1982, and has been documenting and publishing its "Supplemental Poverty Measure" (SPM), which includes all the non-cash benefits mentioned, since ~2008. The notion that Census was unaware or unwilling to address that non-cash benefit shortcoming is laughable, as is relying on Phil Gramm's work in the first place. This video is a dumpster fire of idiocy and misinformation. Where do I go to get that seven minutes of my life back?

[barbcatalin]

This is inaccurate. See the Supplemental Poverty Measure, used by the Census bureau since 2008.

[sonjah]

More BS - look at the homeless on the streets!

[MohammedKarimzai]

Americans are in 38 place in world rankings for math and now American are fighting to be become richer, but just small percentage.

[teddenglercoletti]

WARNING: Kite and Key are conservative group lauded by the National Review. Do your own homework before believing their interpretation and omission of other key stats.