Give Me Your Tired, Your Poor

And then how do we treat the tired and the poor? A Call to Action.

Not like the brazen giant of Greek fame,

With conquering limbs astride from land to land;

Here at our sea-washed, sunset gates shall stand

A mighty woman with a torch, whose flame

Is the imprisoned lightning, and her name

Mother of Exiles. From her beacon-hand

Glows world-wide welcome; her mild eyes command

The air-bridged harbor that twin cities frame.

“Keep, ancient lands, your storied pomp!” cries she

With silent lips. “Give me your tired, your poor,

Your huddled masses yearning to breathe free,

The wretched refuse of your teeming shore.

Send these, the homeless, tempest-tost to me,

I lift my lamp beside the golden door!”

The New Colossus, by Emma Lazarus, 1883

This sonnet is on the Statue of Liberty, and most of us, my age anyway, can recite at least a part of it. It’s been used for and against various presidents, and others, probably since it was written. But that’s not what I want to talk about. Instead, I want to talk about how we treat the poor in general; the financial deck that our politicians have stacked, is fundamentally anti-poor. It endeavors frankly, to ensure that they stay as such, poor. Now, it’s absolutely true, and a tribute to the poor, that many do not remain so. That fact notwithstanding, the deck is still stacked.

The U.S. Monetary System

For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows.

Timothy 6:10 KJV

As a brief aside, I want you to note that it is the love of money, not the money itself, that is the root of all evil. That is an important distinction.

In 1913 “we” set up the Federal Reserve, which is by the way, not federal, and holds no reserve. It is a private bank, owned by its member banks. But I digress, as is obviously a habit. Of course interest charged on money lent, which has been how new money is in large part created, has been a fact of life, pretty much since history has been recorded. But that’s different. “In a historic shift on 25 January 2012, U.S. Federal Reserve Chairman Ben Bernanke set a 2% target inflation rate, bringing the Fed in line with many of the world's other major central banks.” But what does that mean in practice? Of course that means that in the bankers’ perfect world, everything costs more in dollar terms, which is exactly the same thing as saying the dollar is devalued. So, “targeted inflation” is also programmed devaluation of the dollar. Of course this is all sold to us as necessary to sustainably grow the economy. Bunk.

The U.S. Fiscal Picture

As I have documented previously, and blabbed about endlessly, we have lacked entirely any sense of “conservatism” regarding spending for decades, much less managed our debt; According to PolitiFact, “Andrew Jackson was the last president who actually balanced the federal budget, where we had no national debt.” That was 1835. “Since the 1960s, only five years have had balanced federal budgets: 1969 under President Richard Nixon; 1998, 1999 and 2000 under Bill Clinton; and 2001 under George W. Bush.” It’s been then 187 years since we’ve had zero debt, 6 generations more or less, and 20 years since we have balanced a budget that included debt repayment. If this nation were a family, we’d have been living in the car and lined up at the soup kitchen for the last two decades. Yes. We have lost our minds. But so what?

Impact on the Poor

Imagine you are one of the poor. Millions are “unbanked,” which means they are spending all of what they earn, repatriating some of it to their home country, and/or putting what remains under the mattress. Savings are by definition not banked, by the unbanked.

An estimated 4.5 percent of U.S. households (approximately 5.9 million) were “unbanked” in 2021, meaning that no one in the household had a checking or savings account at a bank or credit union.

Consistent with the results of previous surveys, unbanked rates in 2021 varied considerably across the U.S. population. For example, unbanked rates were higher among lower-income households, less-educated households, Black households, Hispanic households, working-age households with a disability, and single-mother households.

FDIC

Let’s say I am poor, or Hispanic, or Black, or disabled, or a single mother…you know, all those groups we pay lip service to; I’m trying to get ahead, so I put a hundred dollars in the piggy bank every month, saving for emergencies, and then for future purchases or, God willing, investments. One year later at 2% inflation, that first $100 I put in will now buy $98 worth of goods. After five years it will buy $90 worth of goods, at ten years $82, and at twenty years $67 worth of the same good or service. In other words, with every day and every year I am worth less in terms of my purchasing power. Somebody tell me please, how that system helps the poor? Let’s say I pass that first hundred on to my 30 year old son, and he puts it under his mattress for 30 years; now it will buy just 30 cents worth of the goods it would have bought 60 years ago. If you are wondering why the U.S. savings rate is low, this is why; I can buy more of what I need or want now, with that money than I can a year from now with that same money. In summation; the almighty U.S. $ is not a store of wealth. Gold is a store of wealth; in 1933 the price of gold was $35/oz, today its price is $1,717.00/oz. That is not because the cost of mining gold and minting gold coins has gone up, it has almost certainly gone down in real terms, it is because the value of the dollar is 1/49th what it was in 1933. In other words, that dollar your dad or grandad put under his mattress in 1933 will now buy just 2 cents worth of the same commodity it bought in his day.

Okay, so start banking you say! Checking out Wells Fargo, the savings rate on their “Platinum” savings, what a joke, is 0.02%. Not 2%, but 2/100ths of 1%. Otherwise known as zero. Make no mistake, inflation, aka devaluation of the dollar, is a tax on those who can least afford the tax; the poor, be they unbanked, or banked.

Remember what I said about looking good versus doing good? All that blather you hear about the politicians wanting to help the poor is rubbish at best. That goes for both sides of the aisle unfortunately.

Call to Action

Inflation tops many polls of important issues as I write; when voting today you have a choice of perhaps “not as good as I’d like,” and “worse.” I’m sorry, but those are the choices. Inflation is running at an advertised rate of ~8%, and is likely much higher in reality. To get inflation down spending needs to slow, including but not limited to government spending. Remembering that family I mentioned above; most families tighten the belt without instruction, if for no other reason than they are not legally allowed to counterfeit money, as is the federal government. If they could print money though I suppose at least some would, it’s human nature. Back on point. Inflation rises, interest rates rise in response, and consumer spending slows; that’s the entirety of the math behind raising interest rates to slow inflation. Unfortunately, the government doesn’t suffer as we do from inflation, and for one very simple reason; they are not spending their own money, they are spending your money. That’s easy.

At the polls today, I pulled the virtual lever for those candidates most likely to raise government spending the least. Your choice is of course just that, yours. But, if you care for any of those groups mentioned above, those most negatively impacted by inflation and devaluation of the dollar, and especially if you are in one of those groups, make an informed choice.

As a last aside, if somebody out there wants to do some research, please look into the last time government spending was reduced year-on-year in real terms, and inform us of your findings. I think the answer is that government spending has never been reduced in real terms, but I could be wrong, and I often am.