Simplify Asset Management chief strategist Mike Green hit the nail on the head on his Substack post on why so many Americans feel like they’re drowning these days. Green also delved into how we measure the federal poverty level, and why it’s completely inadequate in today’s society.
Here’s a portion of his post, titled Part 1: My Life Is a Lie, How a Broken Benchmark Quietly Broke America, and after all of the facts and figures in the beginning, here’s some of the meat of it:
This week, while trying to understand why the American middle class feels poorer each year despite healthy GDP growth and low unemployment, I came across a sentence buried in a research paper:
“The U.S. poverty line is calculated as three times the cost of a minimum food diet in 1963, adjusted for inflation.”
I read it again. Three times the minimum food budget.
I felt sick.
After discussing that the number was based on the fact that most families at the time spent roughly a third of their income on food, and during that time housing was relatively cheap. So was healthcare. Most women stayed at home and both parents did not need to work, and then things changed:
