Wealth and Poverty
The Ultimate Issue: Quality of Life
Ultimately, wealth and poverty are quality of life issues. Wealth obviously improves it, but poverty undermines the quality of life for everyone in an economy, not just the poor. Poverty generates crime, broken families, drug addiction, illness, illiteracy—and more poverty. Many people decry the cost of government programs to deal with poverty and its side effects. However, the “hidden costs” of poverty, which go beyond the suffering of the poor, are staggering. These costs include property loss, deteriorating real estate values, bodily injury, and increased public and private expenditures for insurance, law enforcement, court cases, prisons, and health care, plus the lost productivity of people who could be employed or more gainfully employed.
These costs are borne by everyone. The wealthy arguably bear the largest share of the cost because they pay the largest share of income taxes. They also insulate themselves from the effects of poverty by inhabiting exclusive suburbs, using private schools, and so on, yet the social repercussions of poverty are difficult to escape.
Ensuring minimum levels of nutrition, shelter, safety, health care, and education for everyone may well be within the capabilities of the most productive economy in human history. Again, however, that is a political issue. Moreover, as we will see in the next two sections, the federal government has its hands full simply managing its budget and keeping the economy stable and growing.
Excerpted from The Complete Idiot's Guide to Economics © 2003 by Tom Gorman. All rights reserved including the right of reproduction in whole or in part in any form. Used by arrangement with Alpha Books, a member of Penguin Group (USA) Inc.