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America's Poor Spend 60% Of Their Income On Food & Housing Proving CPI Is Meaningless
Governments and the mainstream media are fond of reporting inflation figures that strip out things no one ever uses like food and energy. As anyone who follows these things knows, leaving out “volatile” categories that track meaningless price movements in the things people eat and the commodities humans burn to sustain themselves is key when it comes to accurately tracking inflation which is why we can’t exactly sympathize with the following, that seems to indicate that even though everyone with a PhD in economics knows that endless money printing does not lead to inflation, people who aren’t rich are somehow managing to spend a greater percentage of their income on food and housing. Here’s more from WSJ:
For many Americans, the rise in food and housing prices is a tough squeeze. That’s because—even in an era with low overall inflation—low-income Americans spend a disproportionate share of their money on food and housing.
New data from the Labor Department show the extent of the discrepancy. The bottom 10% of Americans, by income, devote 42% of their spending to housing and an additional 17% to food–nearly 60% of their total spending, according to the Consumer Expenditures Survey. By contrast, the wealthiest 10% of Americans dedicate only 31% of their spending to housing and 11% to food–closer to 40% of total spending…
This underscores one reason that inflation feels different household to household: People spend their money in such different ways. A parent with children in college or daycare might scoff at the notion that inflation has been low for the last five years. Conversely, someone with no car payment and no mortgage but who does a lot of driving may be feeling flush from the plunge in gas prices.
Yes, “different from household to household.” So what you’re saying is that if things like your child’s education actually have to be paid for with real wages, you may think differently about your economic circumstances than someone who has no mortgage and who “does a lot of driving” in a Bentley that was paid for in cash but which ends up sucking a lot of gas because its V-8 churns out 500 horsepower. Got it. And as it turns out, the poorest 10% of US households foolishly and habitually choose to spend 60% of their meager earnings on housing and food whereas the top 10% of earners apparently understand that, while necessary, putting a roof over one’s head and eating shouldn’t be allowed to take up too much of one’s earnings because if left unchecked, such expenditures can eat into resources that should by all rights be reserved for vacation home purchases.

Curiously, WSJ also notes that the poorer you are, the more you depend on the government and incredibly, it turns out that there’s a correlation between being rich and spending money:
The poorest 10% receive more public assistance than any other group. The second 10% receive more than half their income from Social Security and retirement programs. The third and fourth 10% also receive large shares of their income from retirement programs, suggesting that retirees make up a large share of the lower-middle part of the income distribution…
As consumers become wealthier, their spending patterns change, sometimes dramatically.
And while this certainly appears to paint a rather vivid picture of wealth inequality in America, WSJ does note that “the consumer expenditures survey is not perfect” — and neither is a system where the bottom rung of society spends 20% more of their vastly lower income on staying alive than the country’s elite.
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I was told on Zero Hedge that America doesn't have any poor; everybody who wants one has an iPhone and an Escalade.
ZH has been fairly consistent in it's view that the poor are not "visible" because there are no soup lines or other such visible means of transfers to the poor. EBT, welfare, food stamps- it all zaps in electronically every month.
Within all classes there are leeches. From welfare queens to corporate welfare, it's become all about the government and your relationship to it.
we spend the other 60% on booze and cigarettes
and we spend the other 60% on meth
we spend the other 60% on cell phones and sports tv
# FREESHITARMY
I see them all the time.
Never gave money when they asked for it to buy a meal to not encourage the behavior...until recently. I don't think they really have any better option. Anyone paying attention can see the economic engine shutting down.
My view is that even if they wanted to fish, it's pointless, as the lake's gone dry but for the top slice.
A Tale of Two Cities (it was the best of times; it was the worst of times) rings true as we are seeing both times at the same time in droves once again.
The barren economic ecosystem is a government creation.
It IS a government run world.
I agree. The current system is rigged through a number of ways against the common man. Only under a free system would being on public assistance be immoral.
The number of poor people who take advantage of the current system is hardly significant in light of the trillions of dollars in corporate welfare. TBTF is a sweet deal for psychopathic failures.
Escalade? Thats raycis!
On a side note, whats with black people and Chrysler 300's?
What percentage of their incomes go to drugs, cigarettes, and night train?
Chrysler automobiles are a status symbol in da hood.
isn' that the car Detroit LIon N. Suh was leaning and cruuising in a few years back in a commercial?
According to Yellen, Poor are stupid. They should put money into Stocks, rather than a meal and a roof over their heads.
Hungry, homeless stock purchaser......
If that is not an indication of Yellen going to pull the rug out from under the stock market then I don't know what is?
We have the most well-fed* poor people on the face of the earth.
*FATASSES
They are very healthy too. /sarcasm.
Start working at home with Google ! Its by-far the best mixed bag of goods I've had. Last Thursday I got a trademark new Bmw since getting a check for $6474 this - 4 weeks past. I began this 8-months ago and immediately was coming with house at least $77 per hour. I work through this connection, go.to tech marker for work detail.... www.globe-report.com
And fat. Don't forget fat or was that some sort of microaggression?
Federal Reserve members let's go for improverishing the 99%ers. It's your grand prize Fed PhDs.
Keep going with the QEs (QE4,QE5, QE6... QE20) and creating a currency crisis.
Make it so the poor cannot afford food. Like it is in the 3rd world countries.
You meant the *other* third world countries, right?
Buy an iPad. Read your email. Eat your iPad. Problem solved.
First financially rape America, then buy the iPad, ect. Consequences bitches.
get out there and VOTE !
that'll fix it
"Flip burgers, scrub toilets, mix drinks - and we'll subsidize you some food and housing."
Not much different than getting a shack and some slop for picking cotton (by design).
"And after you're done there why don't you jump down, turn around, pick a bail of cotton."
- Fletch Lives
You know you live in a victim culture when even white folk use the race card to make their case.
Yeah, sorry about that. We'll go back to letting the Federal Reserve and the government fuck us in the ass and won't complain about it. I don't want to be part of that "victim culture."
those people are not required, forced, or limited to "Flip burgers, scrub toilets, mix drinks - and we'll subsidize you some food and housing."
If that is all they are capable of doing, or all that they choose to do, they are getting more than they are contributing in effort. There are certainly opportunities available to earn more. However, maybe they consider their choice the best one as more earnings only leads to lower subsidies. They are trapped by the subsidy threshold.
"If that is all they are capable of doing, or all that they choose to do, they are getting more than they are contributing in effort. There are certainly opportunities available to earn more. However, maybe they consider their choice the best one as more earnings only leads to lower subsidies. They are trapped by the subsidy threshold."
It's getting tougher and tougher to tell the Obamites from the Neo-Cons these days. Neither one can understand the government is gaming the system to favor the international corporations at the expense of everyone else. Those seniors who are greeting people at Walmart chose to greet people at Walmart. There is no such thing as H1-B Visa's, outsourcing and age discrimination.
The fraudulent CPI numbers reported by the BLS have been understating inflation for over twenty years now. Started under Clinton in 1992.
Whats funny, or depressing is that if they accounted for inflation properly there would literally have been no actual growth over the last 20 years
US GDP would be around $7 trillion instead of the official $17 trillion if inflation had been correctly computed over the last 20 years. Here is an alternate computation of US inflation:
http://www.shadowstats.com/alternate_data/inflation-charts
Anyone else remember the old rule of microeconomic prudence that you were supposed to spend no more than 25% of your income on housing?
...Yes, if you're willing to live in a refrigerator box with two prior owners.
My grandparents loved their house in Fantasyland. I don't know why they ever left.
Back in the seventies, a rooom mate and I were looking to move, lease was up, and the landlord thought we should maintain the yard like an English estate, but he felt that two bachelors didn't really need more than two working burners on the archaic stove we had.
A prospective landlord would not accept our lease application, because we wanted a really nice place to rent at more than 25% of our combined income (just a tad over one third). I worked at NASA, Ames Research, and my rooom mate worked at then Pacific Bell as an operator. We were stunned. We both had zero debt...
How times have changed. Now, you are called racis if you ask for financial responsibility.
They should spend the other 40% on stawks
Too few people working harder and harder to support more and more people who aren't combined with a government who is inept, wreckless and is fueling terrorism, combined with a banking system that is rotten to the core and criminal to the core, combined with a tax system that completely pillages working americans on a day to day basis, combined with a central bank that completely rewards all the rotten behavior with counterfeiting, combined with a foreign policy that revolves around spreading war for profit, combined with a political system that gives voters no choice or say in the matter, blue pill or red pill doesn't matter you still wake up in your bed every morning to the same steaming pile of shit.
Looks like everything is working perfectly, couldn't be any better.
http://img1.owned.com/media/images/1/6/2/8/16282/thinking_outside_the_bo...
The slaves were given too much freedom and hope for a better future for a while there.
The owners now realise this and are now remedying the situation.
Transportation costs bite into that CPI too.
That includes car insurance for the family.
This is as simple as I can put it:
Feudalism is additive, over the time it can see, always with an expectable C, taxing physical, intellectual and spiritual mobility. Transportation, public education, and church, the corporation, is unreliable, except to inflate RE at the expense of economic mobility. Take care of your feet, expect G to eliminate your path of travel, and keep your own counsel when it comes to point C. Build out the AC multiplexer of DC circles as you go.
I'm assuming the majority of poor people do not have access to land to garden or an education in basic gardening skills. Costs are dramatically cheaper and more healthful raising your own vegetables. Buying a microwaveable box is much more expensive than seeds. But the whole process takes effort, initiative and a willing to learn.
I guess I'm just cynical. Something tells me most poor people have a flat screen tv. They're ahead of me. I'm in the top 10% bracket and never owned one.
Miffed
You aren't missing much,
but dogTV is nice.
I live in an apartment, which kind of limits gardening.
I go for the best bang for my 36 square feet ( 2/3 of my balcony) and grow herbs.
I don't do fast food - cook from scratch almost every night (Freeze stuff for the nights I don't cook and for lunches at work)
I don't own any kind of TV (haven't had one since the last century!)
No Car, No Cellphone.
Simple is cheap.
Simple is also rewarding, in many ways.
Alcohol is not the problem, it is the solution...
I've said it many times....
One day I hope to wake up in a world that makes sense - until then, there's ethanol!
"I'm assuming the majority of poor people do not have access to land to garden..."
A pretty good assumption since only 50% of Americans own property.
Ron Finley would disagree with you (and he, by the way, is right: There is no excuse):
http://www.ted.com/talks/ron_finley_a_guerilla_gardener_in_south_central...
But their iPhone screen is 27% larger at no additional cost!
Do the include the people that live in new HUD homes with a brand new Escalade and Mercedes in the driveway?
dolt or cretin? Can't decide...
60% IS NOT THAT BAD
IN EASTERN EUROPE IT IS MORE LIKE 100%
but you are free now.
140% if your mortgage was in swf.
most of the elderly who have "successfully" retired may not have much for money flow but they have little need for it so they are marginally "richer" than someone still holding a mortgage on some "retirement" home(florida trailer).
as everyone knows the poor in the usa aren't starving unless by choice. they aren't going anywhere either, nor will their kids. there is a permanent poor class in the usa and it looks like people who refuse to learn to speak english properly. in the past they were first generation immigrants and many are today.
the difference is there is large group of legacy people, white, black and brown, who don't think the proper use of the english language is needed.
What will it take for you to understand what is happening to this country?
If you are old on a fixed income and the store does theft by deception not getting there saver card it is more like 85 percent.
no one even bothers to try and fact check these articles. Its pretty apalling...
http://en.wikipedia.org/wiki/Household_income_in_the_United_States
so no one is full time employed even at minimum wage up to the 30th percentile?
How about including section 8, obamacare, chip, free school lunches etc....
Journalism is defined as:
Don't let the facts interfere with the story.
Modern day journalism, yes. The average reporter now-a-days is a pundit.
Okay, what "fact checking" are you referring to? What am I supposed to be apalled about in the Wikipedia link? A full-time minimum wage job, if you're able to find one, pays about $15,080 a year (less $1148 in taxes, so $13,932 net income) . How does that fit into your "analysis".
Also, the survey looks at actual expenditures by consumers, on top of the "how abouts" you mention.
Lets say that's one reason it's meaningless.
The other reason it's meaningless is because it's fraudulently concocted by white collar criminals.
The way I sees it, lucky muddafuckas gets unlucky somedays and unlucky muddafuckars gets lucky on other days.
Let's say the government/banking cartel stops stealing from everyone and the law is applied symmetrically.
That would sort out most of the problems of the world.
Then there would be time to solve the more minor ones.
Can't un-take the red pill.
I prefer to define the world as being already perfect (without "problems") because it seems healthier than defining the world as a problem and ourselves as perfect. Under this assumption, your ideals being in conflict with reality are the only problem and the source of your grief. You ought to seriously rethink your ideals!
"Objectively", we are in no position to assess the value or goodness/badness of "the world" at all -- it simply is what it is -- so we're best to consider it neutral. If you are unhappy with a neutral world, then that still says more about you than about the world itself.
The arrogance of humans in always blaming someone else or even "the world" for their misery is astounding. They never stop to consider that they or their attitudes are more likely the problem!
Recall that this was the primary M.O. of Christianity, and it largely persists in our modern world, especially among the religious, moral, and downtrodden: to define reality as being full of "problems" (sins) and to imagine a fictious better world that would be free of problems. Again, I don't believe this is healthy, and I think you can expect to have a miserable life if you cling to that way of thinking.
Well this is the end game of the globalists, wipe out the middle class, make everyone dependent on government for everything. "Full Spectrum Dominance"
You should all listen to this interview with William Binney. https://www.youtube.com/watch?v=prfH1q3umnk
Hey, give ‘em a break.
How else are they to decease people as quickly as possible after they retire? I mean, they have to do something to prolong the Social Security Ponzi.
It is probably the only justifiable “benefits” paid by the government. It is represented as a retirement system for private workers… and it’s about to go bankrupt.
It will last longer if retirees die faster.
So, the government gives them just enough to eat well on dog food; provides them with prescription drugs (each contains small doses of poison); then increases their allotment each year according to a CPI that has been stripped of components such as food, housing and fuel.
This way the “real” CPI races well ahead of the cpi used by the SSA; retirees’ health deteriorates faster because of the small doses of poison they consume and… well, they die faster.
It serves quite a few purposes: those who plundered some $2.7 trillion from the SS retirement fund constantly worry that someone will notice… and suggest a recovery of these plundered funds.
Yes, it is better that private workers – both active and retired – remain ignorant, and die quickly after retirement.
And who will make the connection?
I know of people who get government support for food stamps, housing, WIC, etc, etc, etc.
They don't work, they run around all day while the oldest takes care of the other kids
If they do anything, it's for cash, under the table, or drugs, again, cash.
They go where they want, when they want.
I work 50 hrs a week and watch the government take a quarter of it.
I don't have a problem with the needy, I have a problem with the greedy who figured out how to game the system.
Time to reset it all to zero and watch their heads spin.
Probably won't be too much longer..
I know people who work two minimum wage jobs to get by, because they can't find a full time one with benefits. They are very aware of the fact that rent and food prices keep going up while their wages stand still. On top of rent, car payments, insurance and food, they are lucky that the government supplements their low wages with some SNAP benefits. Since they don't have kids, they don't get any help on the rent. And they have no intention of getting married or having a family at any point in the future, because its clear to them that doing that will just make being poor more stressful.
I don't know a single person like the type you describe.
My guess is that there are a lot more people like the ones I know than there are those lik the ones you describe.
40 years ago it was a food stamp collecting welfare queen driving a cadillac. now it is a SNAP collecting welfare queen driving a pimped out Escalade. the same fake phony meme as before only with a few changed words. I know a lot of people working 2 and 3 jobs driving junk cars and no one sitting on their butt in an Escalade.
It is devastating to read the comments. US society is totally degraded and the Americans need to re-invent themselves. The change - the real change not the change Obama means - will only come if a new political force is established which is strong enough to shell the old system including FED and all other institutions which constantly work against the US - constitution.
A dead corpse can't be "fixed". Short of getting Jesus to run for White house p-resident...it's looking like a mass funeral.
The article fails to explain how exactly to lop off the upper 10 percent incomes (making over $150,000 per year) to redistribute to the lower classes. So, are there any ZHers making at least $150,000 a year and how much extra should you "donate" to the IRS?
Funny, I have never heard more self centered miserly greedy what's mine is mine and screw you type people in my life as I have on this site from the hard core Ron Paul butt smoochin' ZH community. How dare you tell them waht to do, but they are quick to to tell others how to live their lives, especially if they think you receive gov't benefits
That's MY money they are living on.
I get a say!
Nope, no Inflation!
Item Pkg. year Price 2013 Increase
Ketchup Btl. 1996 $0.96 $1.99 207%
Margarine Lb. 1999 $0.49 $3.00 612%
Milk Gal 1991 $0.99 $3.19 322%
Milk 1 gallon Gal. 1998 $1.90 $3.19 168%
Onions Lb. 1997 $0.23 $0.99 430%
Oranges Lb. 1999 $0.74 $0.94 127%
Potatoes Lb. 1999 $0.31 $0.99 319%
Grapes Lb. 1991 $0.59 $2.00 339%
Sirloin Steak Lb. 1997 $2.99 $7.50 251%
Sliced Ham Lb. 1991 $1.99 $6.99 351%
Sugar Lb. 1997 $0.20 $0.54 270%
Tomatoes Lb. 1999 $1.21 $2.12 270%
Tuna Can 1996 $0.50 $1.99 398%
(mispost)
they left out a category. the .01%
that has no home expense (paid for in cash)
and whose percentage of organic high quality food expense in the budget is much less than the cost of the cleaning ladies