> The main barrier seems to be a culture or mindset that prioritizes short term benefit/feelings over long term benefits even when there are other options.
Interesting because the main barriers I see are how the system creates perverse incentives for poor people re: getting to be not poor. For example, people on SSI aren't allowed to save. If my sister makes more than ~1k/mo or I save too much (as she's my dependent) she loses her healthcare which is what keeps her from going full Kanye. If I make/save much, I stop getting assistance for my MS meds. Basically, working to get out of poverty wouldn't actually get us out of poverty, we'd just end up giving our money to healthcare companies instead of buying ourselves little luxuries. Another example is that often assistance programs won't help you unless you empty your savings. So if you have 200 dollars and can't make rent, they'll take it from you before they help. So it's more 'rational' to spend that 200 on something else.
Disability, chronic health conditions, and unexpected dependents (be it children, elderly parents, or (in my case) a sibling who manifested a severe mental illness in their 20s) are huge factors in poverty.
Would buying gold or silver coins or collectibles count as savings? If not there are other items that can be purchased new or used that have a high resale value and thus could be used as a store of savings without actually being cash, though the only affordable one on this list, for a poor person, would be the Ann Taylor clothes: https://blog.cheapism.com/best-resale-value-products-14004/#...
Obviously not a solution, and these options are worse in many respects than a basic savings account, but if a savings account isn't an option they may be a good idea. Assuming, of course, that total assets aren't accounted for by the assistance programs.
It depends on the assistance program, but yeah, this is one reason poor people make 'stupid' financial choices. Resaleability is a concern in my purchasing habits as someone whose financial life is likely to fluctuate throughout my life due to disability.
I'm wondering if a person in your position could set up a living trust to be the official "owner" of your assets, and thus get around the savings and income limitations.
Probably not, or rich people would already have abused the system, and a lawyer who could give advice on whether it was legal or not would cost too much.
Centralized finance and inflationary consumerist policies seem to be a major underlying contributor in all of this.
Credit is most available and most advantageous to those higher up that get new money first, and creates a moving target that makes long term stability artificially difficult for those with no capital.
Material poverty was much more prevalent in the past than now, but the kind of housing instability and moving goalposts people experience is I think relatively new for the US. I’m not entirely sure/my history is not good enough to know, but I think local ties and familiarity with neighbors used to be much more instrumental for housing stability. Local banks used to be way different/loans were much more about community buy in and local sponsorship than the kind of disconnected financial blob it is now. That came with all kinds of cons, but I think there were some unappreciated pros we’ve forgotten about; I think the different social dynamics when banking was local is part of why housing was treated like more like a commodity than an investment.
A lot of the problems we have now seem to be a consequence of scale and increasing disconnect. Modern access to cheap low interest credit seems increasingly political and disconnected from the real economy, and responsible for keeping old, creaky, dysfunctional behemoths from imploding and restructuring.
That kind of credit heavy policy made sense when there was massive growth opportunity, but it seems increasingly perverse and going to maintaining existing systems instead of investing in new systems, and is I think partially responsible for the amount of centralization of assets we’ve been experiencing.
Without cheap credit, it’s much harder to suck up as many assets as have been centralized the past couple of decades, and wage decreases are much more transparent and difficult to get away with. Cheap credit also severely distorts prices signals/makes it hard for both consumers and producers to know what is getting cheaper to produce and what isn’t.
On the other hand, without cheap credit, a lot of capital intensive research heavy startup companies would be much more difficult to start, which is essential to lowering production costs. The material advances due to production efficiency are under-appreciated in the US, which makes sense when cost of living and basics keep expanding, but are still extremely beneficial, especially on a global scale.
I wish it was easier to know what a good solution was to lowering the cost of living without hampering innovation. They seem somewhat inversely related right now. But this stuff gets complicated and is not my area of expertise.
> Credit is most available and most advantageous to those higher up that get new money first, and creates a moving target that makes long term stability artificially difficult for those with no capital.
See Cantillon Effect [1].
> I wish it was easier to know what a good solution was to lowering the cost of living without hampering innovation.
I advocate opening real estate to true free market pressures over a couple decades. It now strands egregious amounts of capital in developed economies, is the most heavily-subsidized market in developed nations, is the lowest hanging fruit of middle class household budgets that can benefit the most from a deflationary adjustment transition to the asset class, and offers near-zero national competitive advantage in a future where cognitive leverage is the key to dominant power that will extend beyond the Earth's biosphere.
Interesting because the main barriers I see are how the system creates perverse incentives for poor people re: getting to be not poor. For example, people on SSI aren't allowed to save. If my sister makes more than ~1k/mo or I save too much (as she's my dependent) she loses her healthcare which is what keeps her from going full Kanye. If I make/save much, I stop getting assistance for my MS meds. Basically, working to get out of poverty wouldn't actually get us out of poverty, we'd just end up giving our money to healthcare companies instead of buying ourselves little luxuries. Another example is that often assistance programs won't help you unless you empty your savings. So if you have 200 dollars and can't make rent, they'll take it from you before they help. So it's more 'rational' to spend that 200 on something else.
Disability, chronic health conditions, and unexpected dependents (be it children, elderly parents, or (in my case) a sibling who manifested a severe mental illness in their 20s) are huge factors in poverty.