The Poor Keep Themselves Poor

[Lewkowski]

It seems like many people on this board (well Tear was the biggest one) feel that the poor are not responsible for their condition. That it was their circumstances and that class mobility is a myth. I disagree. Sure there are people who can get screwed. Medical issues, disabilities and the like occur. Sometimes even atrocious bad luck. However I believe those cases are the exception - most people get to where they are in life based on their ambition, work ethic and intelligence.

Here are a few ways the poor keep themselves poor.

The lottery: Odds of winning are really bad. Yet somehow very low income folks still play with an absurdly high percentage of their income.

http://www.walletpop.com/2010/05/31/...ets-heres-why/

The Consumerist recently had an interesting post about a study that shows that poor households, with annual take-home incomes under $13,000, on average, spend $645 a year on lottery tickets, which comes to about 9% of their yearly income.

Refund Anticipation Loans: The concept here is that for a fee you get your tax refund sooner. By about a week. Guess who most often use these services? The poor.

http://minnesotaindependent.com/5700...cipation-loans

Refund anticipation loans, or RALs, promise near-instant refunds, but the catch is that they’re very short-term and very expensive loans, according to Christopher Kukla, senior counsel for government affairs at the Center for Responsible Lending. “In terms of APR, these things carry a rate of 50 up to 1,000 percent,” he said, adding that the rate is often hidden in a bevy of ancillary fees. Watchdog groups have been waging a policy battle against RALs for years, working with agencies like the IRS and the Office of the Comptroller of the Currency. The government has been slow to respond to concerns, despite an ever-growing body of evidence about the harm these loans cause low-income filers.

In some low-income neighborhoods, close to one in five taxpayers took out a refund anticipation loan. “These areas are some of the lowest-income areas in the country,” said Alexis Iwanisziw, NEDAP program associate. “This money should really be staying in the community and staying with the families.”

Smoking: Smoking is pretty dumb. And its expensive. Guess which social class does it the most?

http://www.health.am/ab/more/poor-people-smoke-more/

Evaluation of the data showed that men of low social status are more likely to be smokers, to be physically inactive, and to be obese. The same goes for women, with an even stronger link with obesity.

I could go on. Payday loans? Being "un-banked" due to poor financial choices in the past leading the poor to pay for check cashing services? Choosing not to finish high school. Not saving money. Using money that they have on instant gratification. Poor planning ect ect.

The majority of the poor keep themselves poor. Agree or disagree?

[Loki]

There's also the fact that becoming poor is a consequence of many poor decisions, so it's not surprising that these people will continue to make bad decisions once they are poor (which isn't to say that everyone is poor because they made bad decisions).

[Aimless]

One wonders why they continue to behave in this way.

[agamemnus]

One wonders why they continue to behave in this way.

"They" don't. It's an easy trap, and hard to get out of both because of economy-wide conditions and a person's own habits. Having addiction and learning problems, which many poor people have, doesn't help. Such gambling*/smoking statistics don't mean that you should get rid of social programs as Lewkowski implies, however.

It's not black and white. The problem with social programs is that they usually don't discriminate well in terms of a person's motivations and intentions. If the intention is to continue feeding off the safety net, it's just a waste of the social program (it doesn't motivate the person). If the intention is to get this break so that the person can concentrate on finding a job** and improving him/herself, then the social program "succeeded".



*The lottery gambling is just an influx of 99% pure cash back to the states, so it's no (state financial) harm done, really.

**There are no jobs atm, but we'll consider the normal economy here.

[Ominous Gamer]

I've been taking a few classes with the IRS this year, and the rapid refunds aren't the result of poor people making poor decisions, its the result of poor people having few choices. The poor also the ones who are least likely to have bank accounts and other means in which a refund check can be deposited or cashed. Hence where the rapid refund comes into play. Its the same cycle that keeps people locked into the payday loan cycle. Some of us may remember the positive effects that were seen when payday loan locations were basically outlawed, and banks were allowed to come in and began experimenting with borrowing small, day to day, amounts.
This year is the first year the IRS is directly offering the refund in the form of plastic (debit/credit cards), and they are also denying rapid refund companies access to information that would allow them to determine how much of the refund would go to the person (back taxes, child support, etc)


But don't let facts get in the way of Lewk wanting to rant bullshit.

[Lewkowski]

I've been taking a few classes with the IRS this year, and the rapid refunds aren't the result of poor people making poor decisions, its the result of poor people having few choices. The poor also the ones who are least likely to have bank accounts and other means in which a refund check can be deposited or cashed. Hence where the rapid refund comes into play. Its the same cycle that keeps people locked into the payday loan cycle. Some of us may remember the positive effects that were seen when payday loan locations were basically outlawed, and banks were allowed to come in and began experimenting with borrowing small, day to day, amounts.
This year is the first year the IRS is directly offering the refund in the form of plastic (debit/credit cards), and they are also denying rapid refund companies access to information that would allow them to determine how much of the refund would go to the person (back taxes, child support, etc)


But don't let facts get in the way of Lewk wanting to rant bullshit.

Why don't they have bank accounts? Because they mishandled their finances and probably charged off fees with a bank previously. In addition the cost of cashing a check is far less then the Refund Anticipation Loans. The reason the poor use it? Instant gratification.

[Ominous Gamer]

Why don't they have bank accounts? Because they mishandled their finances and probably charged off fees with a bank previously.

citation needed
There are dozens of ways to screw up one's credit, you don't need to directly work with a bank to do so. Do we also have to go into how these people are poor, and the least ones least likely to afford many of the fees banks charge? Checking account fees, ATM fees, teller fees, etc.

Either way, you're attacking your own argument here. Poor people aren't making poor decisions continously because they are poor. They are making the only decisions available to them. Previous experiences don't come into play here. You don't get to simultaneously claim its their own fault for digging a hole, and claim they want to continue digging that hole.

The reason the poor use it? Instant gratification.

citation needed

[rumrunner]

Why don't they have bank accounts? Because they mishandled their finances and probably charged off fees with a bank previously. In addition the cost of cashing a check is far less then the Refund Anticipation Loans. The reason the poor use it? Instant gratification.

No, it's because they need their cash yesterday if not sooner. they're POOR. But otherwise, Lewk is not far from wrong. Even those born into poverty often don't take advantage of the opportunities offered to them. Often because they either not aware of them, or don't have faith in themselves or the system to follow through. I'm not that many just don't want to try, or make the necessary sacrifices. But you can't just lump them all into one group. Plus it's now much more difficult to open a new bank acct. what with all the "(un)Patriot(ic) Act" requirements on identification.

[Lewkowski]

citation needed
There are dozens of ways to screw up one's credit, you don't need to directly work with a bank to do so. Do we also have to go into how these people are poor, and the least ones least likely to afford many of the fees banks charge? Checking account fees, ATM fees, teller fees, etc.

Either way, you're attacking your own argument here. Poor people aren't making poor decisions continously because they are poor. They are making the only decisions available to them. Previous experiences don't come into play here. You don't get to simultaneously claim its their own fault for digging a hole, and claim they want to continue digging that hole.

citation needed

The instant gratification is obviously an opinion or theory. The basis of which is that the poor have cheaper ways to get their tax refund. Check cashing services provide a cheaper alternative to cash a government check. The benefit for the poor of using the RAL is getting their money sooner rather then later. And we are not talking about a long time two weeks probably tops. So I think the theory has some legs to it.

As so to why the poor are not banked there could be two reasons. One is by choice. In that case this falls into my position that the poor keep themselves poor by making stupid decisions.

The other is because they can't. This would be because they have charged off balances in the past or acted in another irresponsible way. Most banks use a system to check a person's banking history for problems before opening an account.

http://en.wikipedia.org/wiki/ChexSystems

A consumer's ChexSystems report contains banking irregularities such as check overdrafts, unsatisfied balances, depositing fraudulent checks, or suspicious account handling that other banks have reported in the past five years. The majority of banks that use ChexSystems will not open a new deposit account for a customer that has a negative item reported.

[Lewkowski]

No, it's because they need their cash yesterday if not sooner. they're POOR.

Yup got to get that cash fast to spend on lottery tickets, alcohol and smokes.

[RandBlade]

Correction: Some poor keep themselves poor. Many work hard and save etc and improve their lots dramatically - but then lefties don't give a shit about those people, or want to encourage more to be like them, rather concentrate on those who choose to stay poor.

I'd be curious how much welfare recipients spend on cigarettes, alcohol and gambling over their lifetime. Bet its more than a house is worth.

[Ominous Gamer]

Most banks use a system to check a person's banking history for problems before opening an account.

http://en.wikipedia.org/wiki/ChexSystems

Your complete failure to understand how this isn't the poor keeping themselves poor....thats the sad part. You have no information, at all, to support your opinion, and on top of that you have no information as to the ratio of how many people are unable to bank because of costs, previous run ins, bad reporting, identification (a huge issue with a transit population with current laws), and credit reports that are poor (my credit union uses your score instead of Chex).


Another issue you are ignoring is the mail. Refund checks are one of the easiest and more commonly stolen pieces of mail, year after year; especially in poor neighborhoods. At least according to the IRS. Why risk getting nothing (it can take years for a refund if the check is already cashed before reported stolen), when Rapid refund at least promises something?

[agamemnus]

Sounds like paranoia.

[Ominous Gamer]

Percentage wise, it largely is, but there have been entire routes get robbed before. People have been arrested for following the postal worker and stealing the mail mere hours after its delivered.

This is America, fear gets shit done, fear sells.

[Crowheart]

Yup got to get that cash fast to spend on lottery tickets, alcohol and smokes.

Or rent, utilities, car payments, and food, which is why I was forced to use one of the paycheck advance places once when things got tight after a lay-off.
Not because I wanted to, because I had to.

But hell, thanks for your keen insight.
I'll just quit smoking and bump myself right up into the middle class, that $15 a week was the problem all along.
I don't drink or play the lottery so it shouldn't take long.

Man, this is going to be awesome.

[Loki]

You could get a decent amount of food for $15 a week...

[Lewkowski]

Correction: Some poor keep themselves poor. Many work hard and save etc and improve their lots dramatically - but then lefties don't give a shit about those people, or want to encourage more to be like them, rather concentrate on those who choose to stay poor.

I'd be curious how much welfare recipients spend on cigarettes, alcohol and gambling over their lifetime. Bet its more than a house is worth.

I never said all poor keep themselves poor. My position is not that *some* poor keep themselves poor, my position is that *MOST* poor keep themselves poor. If someone is 18 and poor its probably not their fault, and those who temporarily become poor due to economic shocks are not the folks I'm referring to. I'm referring to the lifetime poor people who remain poor because of their bad choices. The only disagreement on this matter that I see is what percentage of the poor make up this group.

[GGT]

It seems like many people on this board (well Tear was the biggest one) feel that the poor are not responsible for their condition. That it was their circumstances and that class mobility is a myth.

What's the point of bringing up Tear when he's banned and can't reply? Besides, he never left me with that impression at all.

I disagree. Sure there are people who can get screwed. Medical issues, disabilities and the like occur. Sometimes even atrocious bad luck. However I believe those cases are the exception - most people get to where they are in life based on their ambition, work ethic and intelligence.

Then you believe most poor people lack ambition, a work ethic and intelligence? I see where this is going....

I could go on. Payday loans? Being "un-banked" due to poor financial choices in the past leading the poor to pay for check cashing services? Choosing not to finish high school. Not saving money. Using money that they have on instant gratification. Poor planning ect ect.

The majority of the poor keep themselves poor. Agree or disagree?

That's not a good question, but it shows your bias and contempt for poor people.

Poverty can be a vicious cycle that traps generations. Decision-making is a learned behavior, just like values and goals, and planning. People aren't born with those skills, and it doesn't just happen by osmosis.

[Lewkowski]

Your complete failure to understand how this isn't the poor keeping themselves poor....thats the sad part. You have no information, at all, to support your opinion, and on top of that you have no information as to the ratio of how many people are unable to bank because of costs, previous run ins, bad reporting, identification (a huge issue with a transit population with current laws), and credit reports that are poor (my credit union uses your score instead of Chex).


Another issue you are ignoring is the mail. Refund checks are one of the easiest and more commonly stolen pieces of mail, year after year; especially in poor neighborhoods. At least according to the IRS. Why risk getting nothing (it can take years for a refund if the check is already cashed before reported stolen), when Rapid refund at least promises something?

Stolen refund checks? Really? You think that is more likely then the promise of some booze money a week early?

Also if your credit report is bad then that means you haven't been financially responsible so its pretty similar, both caused by poor handling of finances. I highly doubt your credit union turns away people for thin files, more likely its due to collection items and delinquencies.

[Being]

Why do you insist on using improper English?

[Dreadnaught]

I don't think services like payday loans are indicative of an inferior mindset of the poor. It's a very simple choice that folks make: get less money overall in order to get money now. Usually they get the money now because they need the money.

Plus our tax code is so complex and skewed that poor people tend to bother overpay in taxes, and get back enough of a refund to effectively have a zero federal tax rate.

The lottery thing has always fascinated and depressed me. But the studies I've read correlate lottery purchases with education more than income.

[GGT]

Than.

Even though you've disappeared for now, Lewk, I'm going to answer your OP with some other questions.

If you believe poor people keep themselves poor with bad choices, do you also believe children from those poor families should have Early Childhood Education options (that poor people may not have)? How about Parenting classes?

Assuming you want to keep those [lazy, drinking, gambling, smoking] poor people off welfare....what do you believe should be done for their children? Quality Day Care while their parents try a jobs program, or welfare-to-work? Pre-kindergarten Educational Nursery instead of a babysitter in the ghetto with a dozen other kids?

Would you agree to investment of public funds to help those children break out of the negative cycle they were born into, so they can make better choices and learn how to move out of poverty? Or would you prefer funds be spent later in their lives, for police and prisons?

[Lewkowski]

What's the point of bringing up Tear when he's banned and can't reply? Besides, he never left me with that impression at all.



Then you believe most poor people lack ambition, a work ethic and intelligence? I see where this is going....

Then you never paid attention. Tear was always contemptuous of the "self made man" or "pull yourself up by the bootstraps" talk. He frequently expressed the belief that people become rich based on circumstances not merit.



And yes I do believe most of the lifelong poor people do lack one, two or all three of those characteristics.

[GGT]

Then you never paid attention. Tear was always contemptuous of the "self made man" or "pull yourself up by the bootstraps" talk. He frequently expressed the belief that people become rich based on circumstances not merit.

Bullshit. You seem to have missed how ridiculous the help yourself "bootstraps" claim can be. I feel confident in saying Tear was never contemptuous of a "self-made man". Enough of that.

And yes I do believe most of the lifelong poor people do lack one, two or all three of those characteristics.

Whether that's a logical or misguided belief .... please answer my other questions about children born into poverty.

[Ominous Gamer]

Stolen refund checks? Really? You think that is more likely then the promise of some booze money a week early?

This is perhaps the best line in the entire thread that shows how disconnected you are from whats really going on in poor neighborhoods. Thanks for clarifying this for the rest of the forum. You have nothing but your own opinion to think that poor people use a quick tax refund for "booze money", compared to the very real (and overly abused) threat of losing their refund due to identity theft (thats how the IRS handles cashed stolen checks), and how long the process is to order to get the money thats rightfully yours. Its such a problem that filers who have been victims before are forced into a special process to file future returns. This is outide the idea that, as several users have already mentioned, there are very real bills that this group of people use an immediate return on.

Also if your credit report is bad then that means you haven't been financially responsible so its pretty similar, both caused by poor handling of finances. I highly doubt your credit union turns away people for thin files, more likely its due to collection items and delinquencies.

A bad credit report could mean a lot of things. Poor people tend to move around a lot, thats a knock on their credit. They also tend to use services like prepaid accounts and cash transactions that do not reflect long term on their credit worthiness. Its a downward spiral, that again, only shows how much of a fucking moron you are.

[Lewkowski]

He was contemptuous of the concept of the self made man. Multiple times he said people became wealthy due to luck and circumstances. In any event the point is moot to the overall discussion. Lets talk about your view. Do you think the poor remain poor because of their choices?

If you believe poor people keep themselves poor with bad choices, do you also believe children from those poor families should have Early Childhood Education options (that poor people may not have)? How about Parenting classes?

Do you think this would help? People constantly like to throw money at education and little results from it.

Assuming you want to keep those [lazy, drinking, gambling, smoking] poor people off welfare....what do you believe should be done for their children? Quality Day Care while their parents try a jobs program, or welfare-to-work? Pre-kindergarten Educational Nursery instead of a babysitter in the ghetto with a dozen other kids?

My personal belief is that if people can not provide for their children then they should not be allowed to raise their children. I'm opposed to the government acted as babysitter for children.

Would you agree to investment of public funds to help those children break out of the negative cycle they were born into, so they can make better choices and learn how to move out of poverty? Or would you prefer funds be spent later in their lives, for police and prisons?

I'd prefer them to live with mind numbing terror of the law if they decide to commit crimes. If swift and certain death is the response to theft, rape and murder then we won't need to spend that much more on police and prisons.

I support monetary incentives to do well in school. I support some common sense classes regarding finances in school. I support the teaching of cause and effect, consequences and the holy grail of personal welfare that is delayed gratification.

[GGT]

Lets talk about your view. Do you think the poor remain poor because of their choices?

(Assuming you mean US poverty) many are likely caught in a vicious cycle, due to a combination of not learning how to make good choices + making some bad choices + a degree of hopelessness or futility.

Do you think this would help?

Early Childhood Education? Yes. Absolutely.

People constantly like to throw money at education and little results from it.

You didn't answer my question directly, but I suppose that's your answer.....you think it's just throwing money down the toilet to spend funds on little children.

My personal belief is that if people can not provide for their children then they should not be allowed to raise their children. I'm opposed to the government acted as babysitter for children.

Did you just advocate forced adoption or orphanages for "certain people", but you don't want the government to intervene? Make up your mind. Unfortunately, trying to punish parents doesn't really help the kids.

I'd prefer them to live with mind numbing terror of the law if they decide to commit crimes. If swift and certain death is the response to theft, rape and murder then we won't need to spend that much more on police and prisons.

Not all poor people commit crimes, even though many in prison come from impoverished homes (monetary or otherwise).

I support monetary incentives to do well in school. I support some common sense classes regarding finances in school. I support the teaching of cause and effect, consequences and the holy grail of personal welfare that is delayed gratification.

They tried paying students to get good grades in NYC; it didn't work.

WTF does the holy grail of personal welfare even mean, let alone for a baby or toddler? What they need is a safe and nurturing environment, so they can follow the basic human instinct to explore and learn. Why would you deprive an innocent child of that, simply because you hate their parents?

[wiggin]

I think part of the problem is a lack of basic financial literacy, which is not really the fault of the poor. I had a fascinating conversation with someone who's worked with a lot of patients and employees in East Baltimore; he contends that the reason most of them take their paycheck immediately to be cashed (and have little if no savings in a bank account) is not because they don't want to save or budget, but because it helps them budget. Numbers on a piece of paper have no meaning to them in terms of what they can buy, but cold, hard cash does. Their paycheck isn't real until they have greenbacks in their pocket.

Most other problems initially listed are tied to similar deficits in financial literacy - poor understanding of net present value, risk/benefit analysis, probability, basic financial instruments, even the basic math needed for budgeting. If they had these tools, I suspect many of the working poor would try very hard to improve their financial straits; they just don't have the training or ability (things we often take for granted).

This isn't to exonerate all of the poor for any responsibility for their situation - plenty of poor are addicted to expensive and terrible habits (e.g. nicotine/alcohol/crack/whatever), take little responsibility for their own lot, have extremely poor parenting skills (not to mention family planning!), etc. But I think many of the poor who are just barely scraping by but work their asses off would be greatly helped by some improved financial literacy and quantitative education.

[Lewkowski]

This is perhaps the best line in the entire thread that shows how disconnected you are from whats really going on in poor neighborhoods. Thanks for clarifying this for the rest of the forum. You have nothing but your own opinion to think that poor people use a quick tax refund for "booze money", compared to the very real (and overly abused) threat of losing their refund due to identity theft (thats how the IRS handles cashed stolen checks), and how long the process is to order to get the money thats rightfully yours. Its such a problem that filers who have been victims before are forced into a special process to file future returns. This is outide the idea that, as several users have already mentioned, there are very real bills that this group of people use an immediate return on.

A bad credit report could mean a lot of things. Poor people tend to move around a lot, thats a knock on their credit. They also tend to use services like prepaid accounts and cash transactions that do not reflect long term on their credit worthiness. Its a downward spiral, that again, only shows how much of a fucking moron you are.

Stolen refund checks, I really can't believe that's your justification for the poor using RALs. I'm not even worth debating.

In regards to bad credit your confusing the behaviors credit unions will look and the score itself. They are going to be specifically looking for accounts going delinquent and collection items. In any event most banks are going to use Chexsystem.

[Ominous Gamer]

Stolen refund checks, I really can't believe that's your justification for the poor using RALs. I'm not even worth debating.

Its a big enough issue to force the IRS to begin their move over to debit cards. Deciding you want to ignore a concept you weren't able to think of before hand, or wrap your mind around currently, doesn't mean its without merit

In regards to bad credit your confusing the behaviors credit unions will look and the score itself. They are going to be specifically looking for accounts going delinquent and collection items. In any event most banks are going to use Chexsystem.

and you're still stuck in the self justification that bad credit means bad behavior, that not having the constant income, immediate funds, or worthiness to open (and maintain) a bank account automatically means they've done something wrong againist another bank in the past. Which you still fail to understand works againist your idea that poor the poor keep themselves poor, and more towards the idea that the poor are easily the most taken advantage of group of people because they have so few options (for whatever reason).