Poverty in America

To those living in the developing world, the idea of poverty in America may seem like an oxymoron.  How can a nation, known through out the world as “the land of opportunity,” have people living in poverty?

This year five of us BGI students will take a deeper look into what is keeping young adults, from an impoverished background, from achieving a living wage – even after having achieved a bachelor’s degree.

Though the course of this project we will take a greater look at current economic systems, the supply and demand of bachelor degree holders in the market place, the financial bind this puts these undergraduates in and what possible opportunities there may be to make a difference in a system that is - as far as they are concerned - failing.

The current economic crisis certainly has not helped the situation in which recent graduates now find themselves.  College graduates age 24 and under are now facing an almost 40% underemployment rate likely due to the lack of demand in the economy.   Scraping by on low paying jobs, they are still faced with having to pay back huge school loans on an education that’s price has drastically increased over recent decades.

Listening to lectures this past weekend on Economics, unpacking the extremely complex system I couldn’t help but wonder, (1) How did we get here? (2) Is it possible to fix the system?  . . . and (3) If not, then what?

If it is the job of the government to foster a stable market and set up conditions for economic growth then we have a ways to go in establishing that type of governance. 

The way in which monetary policy is set up is actually quite surprising.  With the “stork of a pen” governments including our own can will money into being.  There are two basic kinds of money – commodity money, and flat money.  The first has something on which the money is based the other is simply a social construction that simplifies trading however if a society begins to lose confidence in the currency the value drops.  Where does the United States of America stand between these two types of currency?  Somewhere in between. 

The US Treasury and Fort Knox hold a large quantity of gold provides a sense of security behind our “Federal Reserve Notes” that we carry around in our wallet.  However, interesting banks are only required to have 10% reserves of actual liquid funds and are free to loan out the rest.  It’s not surprising then that when bad loans where made that our faith in the economic system we created also fell apart.

Stay tuned as we dive deep into the US and world economic system, poverty and potential solutions.