Friday, September 11, 2009

Important description of economic performance

The Census Bureau released its latest description of income, poverty, and health insurance coverage. These data provide important description about what's going on in the economy. You should click this link and look at all the slides, or this link for a summary of a few. While there ask yourself, are these patterns acceptable? If not, what outcomes would you prefer? What is impeding us from reaching the better outcome (that is, what explains the deviation of actual economic performance from the ideal), and what policies might help bridge the gap between where we are and where we'd like to be?

As for the poverty slide (i think it's slide 5), how has the standard for "poverty line" changed over the years?

As far as I know, the initial poverty line was calculated in a way that we take the amount of money a household spends on food and divide it up by the percentage of food expenses in a household's total expenses. This fashion of calculating was carried on ever since poverty line was introduced and even the percentage remained somewhat the same.

However, there has been tremendous changes in the percentage of food expenses, as housing prices are increasing rapidly. Also, the spending structure of a household's expenses has changed as well. Should we still use the old way of calculation? If not, what kind of standard should we adopt?
The biggest travesty underlying these figures is the fact that no health insurance translates into no affordable health care for millions of Americans. Why is it that America spends more per capita on health care than any other developed nation while providing relatively poor health care? Perhaps it has something to do with the fact that only a small fraction of health care spending is actually used to treat or care for people. Public health care works; ask a veteran.
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