The reason why low-income workers are able to spend twice as much as they take in (if they live in poverty) is because the money they earn from working, is not their entire income. They also collect public assistance to help them get by:
Food Assistance, public and private,
Public Housing for their housing (obviously)
Earned Income Tax Credit so they don't have to pay the Federal income tax
All of this income they take in to go along with the money they make working, sometimes 2-3 jobs. And this is the way it has to be, as long as we have people making such little income from working.
What we need to do is to empower our low-income people, whether they are working or not, to get themselves a good job, so they don't have to collect so much from public Assistance and can make enough money to pay their bills, because they have a good enough job that allows them to live at least a fairly comfortable lifestyle, out of poverty and into the working middle class.
This is how you move people out of poverty, not by increasing their income from public assistance, but by empowering them to increase their own income, by having a good job, where they can afford their own home, whether it's a house or an apartment, but where they are able to pay for their own housing, own a car if they need it and so-forth.
We have experience from this from the 1990s in moving people out of poverty with a similar approach. We moved away from that in the last decade, as we saw millions of people who were once in the middle class, finding themselves out-of-work and collecting public assistance. And the Great Recession has only made things worse. And what we should be doing as we get the economy going again, that leads to strong economic and job growth, is be investing in things that move people out of poverty: education, job training and job placement, into good jobs that moves them out of poverty, as they collect their public assistance in the short term. Which is what we were doing in the 1990s.
We have experience from this from the 1990s in moving people out of poverty with a similar approach. We moved away from that in the last decade, as we saw millions of people who were once in the middle class, finding themselves out-of-work and collecting public assistance. And the Great Recession has only made things worse. And what we should be doing as we get the economy going again, that leads to strong economic and job growth, is be investing in things that move people out of poverty: education, job training and job placement, into good jobs that moves them out of poverty, as they collect their public assistance in the short term. Which is what we were doing in the 1990s.
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