Straight Talk About...: Part 9 - The Key to a Thriving Economy: Eliminate Poverty

There are many different views out in the public square regarding the origin of poverty, its contemporary definition, the causes and effects of poverty, and whether or not ii can be realistically resolved.

Keenly aware of the dangers in ignoring poverty, former U.S. President John F. Kennedy, about 50 years ago, issued the following stern warning to members of the upper class in his country: "If a free society cannot help the many who are poor, it cannot save the few who are rich."

As to the issue of its origin, in retrospect one might bluntly suggest that poverty is one of the last holdovers from the era of slavery. More than two millennium earlier, an Athenian philosopher, Aristotle, viewed "Poverty (as) the parent of revolution and crime."

Many, especially these days, would like to deﬁne poverty as a personal failure. Others, like the late dramaturge Brooks Atkinson, put the blame squarely on "the failure of the economic system". As most critics, Atkinson too was rather short on providing solutions, however at least he cautioned against relying on charity alone, and recommended to take "political and economic action" in order to eliminate poverty.

Mainstream sociologists, having conducted innumerable analyses on this topic time and again, invariably point to lack of higher education as its cause, and high unemployment rate as the effect of pauperism. Clearly, these mostly well-intentioned folks have been ignoring the many aspects of reality. Namely affordability, practicality, and interest, among some other personal issues, by recommending higher education as the magic formula for eliminating poverty.

As always, there are those folks who take solace in the fact that indigence is an age-old problem, therefore, in effect, it's a natural phenomenon that we all have to learn to live with. Moreover, they say that poverty effects just a narrow group of people. Well, not according to "Personal Income Statistics 2010."

Yet, the more sober elements of society urge us all to deal with all manifestations of poverty. And it must be done for ethical, humanitarian, practical, and economic reasons. Moreover, for business‘ sake, it must be done for reasons of self-preservation.

Looking at the current state of affairs in this country, it becomes increasingly evident that the conventional methods applied to curb this grave problem has not worked. In fact, these ‘methods’ — throughout the past few decades — have created a socio-econo-ﬁscal disaster, inasmuch as:

Millions of lives have been unnecessarily disrupted, due to:

a maldistribution of income at the "lower-paid strata" of the active workforce;
an underdeveloped and stagnating economy; and
the unnecessarily high poverty and unemployment rates;

An over $1 trillion public debt that was accumulated mostly as a result of diminishing tax revenues and ﬁnancing a meager and dysfunctional ‘social safety net‘.

At this point, once again the familiar question is waiting to be answered:

What should the establishment be doing to effectively resolve the issue of poverty in Canada, — one of the richest country in the world — and, by extension, to create a thriving economy for the beneﬁts of all stakeholders?

To respond to the aforementioned criteria, we offer the following clusters of potential solutions:

Implement our "Full Employment without Any Loss of Income…" program, as described in Part 8 of this "Straight Talk About …" blog.
Strategically raise the wage-scale for the lower-paid segment of the active workforce, to the tune of 25% -10%, in order to progressively improve the purchasing power of the estimated 5 million breadwinners in Canada. This approach has an innate advantage over any other methods, inasmuch as its push-pull effects on the economy is almost instantaneous, since consumers tend to spend their newly gained purchasing power faster than any other income group, according to the experts.
Develop an Affordable Housing Construction Program, supplemented by the power of volunteerism that could be ﬁnanced by federal budget-savings gained from the nearly $20 billion El funds, allocated for the current ﬁscal year. It is envisaged that the implementation of such a program would have signiﬁcant beneﬁts for:

First home buyers with limited, but relatively stable ﬁnancial resources;
Retirees who are ready to trade down for a smaller condominium; and
The unemployed and untrained/unemployable school-dropouts.

Diversify this country's economy, in the interest of avoiding a socio-econo-ﬁscal calamity in case the current economy, supported by the automotive, ﬁnancial and IT sectors, fractures.
The Government of Canada should subsidize the currently low RSP payment rates. These rates should not be set to less than 5% per annum, otherwise many retirees will join the millions of welfare recipients.
Welfare payments should be increased to ensure that disabled recipients can provide for themselves the basic necessities of life, just like in Denmark, Germany and Switzerland.

In conclusion: Let us suggest that it's time to put realistic, affordable and — one might even suggest — proﬁtable solutions, that have the built-in capacity to painlessly and seamlessly resolve six very serious socio-econo-ﬁscal problems, i.e.: Poverty, Unemployment, the Economic Stagnation, Deﬁcits, Debts, and the Welfare of the Disabled, in a comprehensive manner.

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