The difference between ‘broke’ and ‘poor’

Social connections require work, they also are slow and unreliable.

Before the information age, to get to know something, talking was the main way.

But now with books, panels, displays, packaging, signs, internet, GPS, etc., we have access to a huge quantity of information without having to talk to each others.

And we choose to do so because on average it's faster, more accurate, and avoid to deal with annoying people. After all, human relations also include a part of risk.

I lived 2 years in Africa, and there, you don't have that much information immediately available. You are back to talking, creating a social network and playing the game. People are way more friendly there, there is greater solidarity. But things are also way slower, unreliable, and you are a lot more at the mercy of popularity games even in the most simple activities.

This century we have been mutating our lives in deep ways, very fast. And it's not all bad. But we will need some time to reconcile the efficiency of our new life styles with the social needs we have at the primitive level. A few decades is way too short for that to have happened already, especially since we are not done with technical progress.

I don't consider stories like that waste of my time.

https://www.merriam-webster.com/dictionary/literally

Trying to police popular slang is a losing endeavor, and I don't think it accomplishes all that much. People already know that there's a difference between someone who's too poor to go clubbing, and someone who's too poor to buy food.

That said, I can empathize with the author's frustration, and I think it's sad that we don't hear such life stories more frequently. The stories we see on TV and hear in the media, are too often skewed in favor of those privileged enough to work in these industries, or to spend their time and money consuming them. That makes it all the easier to forget that people like the author even exist. Out of sight, out of mind.

The fact is that marginal effective tax rate approaches 100% at various points on the first $80k of household income.

If you are a family of 4 and require any health care, the first $80k is practically treading water.

This is because you lose out on $500/mo in food stamps, at least $2,000/mo in healthcare subsidies, and pay over $17,000 in total taxes. That’s not including various other programs you might qualify for as a family of 4 with zero income versus programs you no longer qualify for after earning $80,000.

On top of that, it actually costs a lot of money to go out and earn that $80,000 (direct, indirect, and opportunity costs) which eat into the very little money that actually remains after taxes and disappearing subsidies.

Here’s a CBO analysis on marginal effective tax rates for a single parent with a single child which shows gross income vs effective income — see how it flattens out? [1] The marginal effective tax rate is higher the more children you have.

This analysis does attempt to take cost-sharing subsidies for health insurance into account, although it’s not clear what level of health care utilization they are modeling.

The most fascinating thing about the curve on slide 6 is how “After-Tax Income” starts at about $19k (the value of the govt subsidies) and by the time the parent is earning $60,000 has only increased to about $40k (66% effective tax rate), and there is a point on the curve where slope is negative — earning more leaves you worse off!

[1] - https://www.cbo.gov/system/files/2018-06/54093-taxrates.pdf