Costs and benefits

Most people underestimate the degree of interaction between poverty and the rest of the Interlock.  First, the culture of poverty is hugely expensive for the rest of us.  From money spent on schools that don’t teach, to welfare dollars, to police, court, and prison budgets, to health care costs, to the damages and losses from crime, this group costs the rest of society substantially more than it contributes to the economy.  In addition to the cost, this also acts as a major drag on government and undermines public trust and cooperation.

There’s also the large opportunity cost of poverty to consider.  Every poor kid who grows up to be an educated, law-abiding, working, tax-paying citizen is not only someone who contributes to the economy and to society, but is also one adult less on the cost side of the equation.  Their children are also far less likely to perpetuate the poverty/health/crime syndrome.  When a child is unable to overcome the handicap of poverty, the loss of a productive citizen is as big a drag on the economy as is the addition to the population living in poverty.

Finally, the US’s role in the world economy is dictated in large part by the average productivity of our population.  We’re powerful in part because we have the highest GDP per capita of any large country, and the largest population of any rich country.  But we can’t continue to maintain that position if a large and growing fraction of our young people grow up without the skills to be competitive with workers in other countries.


Next page:  Interactions – Poverty

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