By Seton Motley
Monetary inflation orchestrated by the government continues to be an enduring challenge.
Since the United States abandoned the gold standard in favor of fiat currency back in 1971, the value of the dollar has plummeted by an astonishing 87 percent.
With the national debt surpassing $38 trillion and increasing by $1 trillion roughly every 100 days, fewer investors are showing interest in U.S. bonds. This leaves the government with little choice but to print additional trillions, a strategy known as “inflating away the debt.”
Soon, we might find ourselves reminiscing about the days when an 87 percent decline in dollar value seemed manageable.
Moreover, as the government grapples with the depreciation of our currency, there seems to be little urgency in revising the financial metrics that reflect our economic reality.
To wit: The official “poverty level.”
Behold a recent Blog Heard Round the World….
Part 1: My Life Is a Lie
It was written by a Wall Street portfolio manager by the name of Michael W. Green. And he did a deep dive into how the federal government calculates poverty — and the level below which one must fall to be officially designated “poor.”
Shocker: The government does it all poorly.
Another shocker: Again, D.C. is in no rush to correct itself. Because to do so would be to reveal — and admit — the titanic damage D.C. has done to the U.S.
D.C. has computed “poverty” so badly for so long that even the TV show West Wing — in its third season — pointed out D.C.’s erroneousness. That’s how universal the knowledge of D.C.’s idiocy had become — even way back then.
West Wing’s third season was written and aired in 2001. It’s 2025. And D.C. is still computing poverty exactly the same way it has since nearly four decades prior to — and nearly a quarter century since — said episode.
Our blog author Green:
The (poverty) formula was developed by Mollie Orshansky, an economist at the Social Security Administration.
In 1963, she observed that families spent roughly one-third of their income on groceries.
Since pricing data was hard to come by for many items, e.g. housing, if you could calculate a minimum adequate food budget at the grocery store, you could multiply by three and establish a poverty line….
She was drawing a floor. A line below which families were clearly in crisis….
But everything changed between 1963 and 2024….
In 2024, food-at-home is no longer 33% of household spending. For most families, it’s 5 to 7 percent.
Housing now consumes 35 to 45 percent.
Healthcare takes 15 to 25 percent.
Childcare, for families with young children, can eat 20 to 40 percent….
Which means if you measured income inadequacy today the way Orshansky measured it in 1963, the threshold for a family of four wouldn’t be $31,200.
It would be somewhere between $130,000 and $150,000.
And remember: Orshansky was only trying to define ‘too little.’ She was identifying crisis, not sufficiency.
If the crisis threshold — the floor below which families cannot function — is honestly updated to current spending patterns, it lands at $140,000.
What does that tell you about the $31,200 line we still use?
It tells you we are measuring starvation.
Just one line item in today’s average budget is larger than the official DC poverty line of $31,200: “The single largest line item isn’t housing. It’s childcare: $32,773.”
Gee — I can’t imagine why the US’s population is imploding.
SEE ALSO: Changes Push Millions Off SNAP Even As USDA Secretary Rollins Looks to Bigger Cuts
Gobble Up the Savings: Thanksgiving Meals 3 Percent Cheaper This Year
More Green:
Using conservative, national-average data….you arrive at a required gross income of $136,500.
This is Orshansky’s ‘too little’ threshold, updated honestly. This is the floor.
So let’s look at the actual number of poor people.
By the old standard? In 2023, 12.5 percent of Americans were designated poor, or 40.8 million.
But the reality ratio? Dividing the Orshansky number ($31,200) into the Green number ($136,500)? Roughly speaking, it means the real poverty number is 4.375 times higher than the D.C. number.
In 2023, that means 40.8 million people weren’t poor. It means 178.5 million people were poor.
And it’s only gotten worse since.
And it will only continue to get worse — in perpetuity.
Because D.C. is too broke and broken to do anything about any of it.
So they won’t even do us the courtesy of being honest and fix how they compute it.
Seton Motley is the founder and president of Less Government.
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