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Today I will be observe the relationship between income and debt and learn how poverty happens, how to avoid it, and how to fix it. I will also go into depth about many other topics related to poverty.

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The Relationship Between Debt and Income

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The Relationship Between Debt and Income

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The most frequent way of measuring how much you're taking in and how much you are spending is by using a debt to income ratio. For example, if you pay $1200 per month on mortgage, $200 per month on auto loans, and $600 on other financial needs, your debt is $2000. If you receive $6000 per month from your job, you have a debt to income ratio of 1 to 3, because you pay $2000 per month and take in $6000.

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One of the main causes of poverty is lack of education. There is a constant problem where people think we must solve poverty before putting poor children into schools. The result of this is that these children grow up not knowing how to read, write, or do basic math, and without these skills they cannot apply to jobs to help support their families.

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A war can really throw a country's economy off. Food, medical supplies, weapons, and shelter must all be provided to soldiers and can put a great strain on an already poor country. And if a city is bombed and destroyed, fixing it could be millions of dollars, at a bare minimum. Also, without a government to maintain order and protect rights, people who could have been successful businessmen and entrepreneurs have no protection for their property and cannot invest into a business safely.

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If there is a plant disease spreading, or a minor bug infestation breaking out, or even if there just isn't enough water an sun for crops, the economy of a country can fall apart in the blink of an eye. Most countries depend on there agriculture, and if that source of food and other resources breaks down, the country has nothing to offer its people, and that eventually leads to poverty.

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Another reason of poverty is national debt. The country being in great debt can severely damage the economy. The country doesn't have the money to support their country. Potentially successful businesses are forced to go global to make more money, which can be a lot of strain on the business and cause bankruptcy.

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This also a problem that America faces to this day. Billions of dollars in tax have been avoided, both legally and illegally. If even half of this money was given to the government, they could turn around and make a greater effort into charity for the poor and other people in need

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Whether it is Black from White, Jewish from German, or women from men, there has always been discrimination. This appalling injustice has many downsides, and poverty is one of them. Discriminated groups of people are given less pay for the same amount of work, and often have nowhere to go for help of a financial aid. Most forms of social inequality are pointless and many are still going on today.

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No matter how prosperous a country's businesses are or how successful the economy of that country is, a natural disaster can devastate that in a matter of minutes. Any money you had stored away in your house is destroyed, along with the house itself, and any establishment you have made is completely destroyed, with no banks around to help restore it. Now imagine this being a repeated process, almost as of it were a routine. That would be a straight path to poverty.

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There are so many more people who are overeating than under eating. More than 35% of Americans are overweight. And guess what? In comparison, 14.5% of America is poor. So if every overweight citizen took a little bit from every meal they ate to give to another, we could be done with starvation! This same issue can be applied to other matters, such as money, clothing, and shelter.

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This is the part that we do math! I'm going to measure the poverty line of various states and the average income and debt of each state.

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Many countries have faced corruption, a looming threat in any location. Even America today faces corruption. Corruption starts poverty and can be a result of poverty. Corruption impairs the development of a country both politically and economically. Certain peoples votes aren't worth much anymore and money is given to the rich instead of the poor. A person in poverty would do anything to escape their horrid fate, even lead a corrupt life.

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The poverty line for New York is $1,860 monthly for one person, adding $645 for each person in the household and $22,311 (I'm pretty sure it was a typo and is supposed to be $12,311) annually for one person, adding $7,733 for each person. The average annual income in New York is $68,679.

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Young adults in America spend an average of $173 per week on food, which is substantially more than what older Americans claim to spend. Surveys say that adults in America spend $151 on food per week. These statistics can vary among class. 10% of adults claim to spend more than $300 per week, while 8% claim to spend less than $50. It also seems to be then men spend slightly more than woman and that the Midwest spends slightly more than other areas in the US. It seems, after inflation-adjustment, Americans today are actually spending less then when the last survey was taken. The information that is important for later is that the average adult spends $151 per week and $7,852 per year on food.

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Buying a car could cost you up to $33,560, but lets say you don't want to pay it all at once so you get a loan and only pay one-third of the price with your money. That's about $11,187. To maintain your car and pay for other things like insurance, it would be around $8,469. That would add up to $19,656 annually.

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Research has shown that people spend approximately $1,700 annually on clothing, which could be much more than we need to. In 1930, American woman owned approximately 9 outfits, but now, they have around 30 outfits in their closets. If we learn to buy less, we could save more.

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The average American spends around $7,700 on after-school nannies every school year. But for the purpose of this presentation, you have two children so it ends up being $8,500. We can assume that during the summer you have your child stay with a relative.

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Let's say your monthly rent is $1,000. That means you'll pay $12,000 on your rent alone. Let's say that due to the real estate of the area, you have to pay electricity bills and water bills. Any other bills will be taken care of by your seller. If your water bills were to be $50, and your electricity bills were the same, it would be $1,200 for the full year.

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The federal government says that you are officially in poverty when you make $12,140 annually and are eligible for different programs to help you rebound from that poverty.

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The total annual cost of everything on this chart is $50,908. This chart isn't 100% accurate, because I'm not an adult and I don't know what kind of expenses adults have. I also left out a few things either due to lack of clarity or I thought that it wasn't a necessity. That is way more than the federal poverty line. Most people just barely make it through. The average American makes $51,939, which isn't much room to spare.

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This is pretty obvious, more jobs means better economy, right? And America has plenty of jobs that can be created, from building renewable energy sources to clearing polluted areas, we can make a platoon of jobs. We can also help reduce fossil fuel usage by having humans replace jobs robots and machines are forced to use. Many people think that they would be losing money but when you think about it, it's just more money in circulation. These new people with money will use their money to buy from stores and restaurants, and then those people in the stores and restaurants will use that extra money for their own needs and the process will keep going on, meaning that more people have money not just including people who now have jobs but other people who eventually use their money on the business that originally supplied more jobs.

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If your in poverty, conserving money is obviously a top priority. starting a budget can help you manage your money and save money for later. If you correctly manage your budget, after a few years you'll have a lot of spare money to spend.

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Whether that means negotiating a raise or finding a new job, improving your income is key for getting out of poverty. Also, working two jobs isn't as helpful as it seems. Most likely, this will bring you more stress than you started with. It's better to find a more reliable full time job than getting multiple part-time jobs.

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In this section, I'll talk about how to deal with poverty as a society and as individuals.

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One of the most common ways of getting out of poverty is education. A career that only requires a two year degree can earn you $50,000-$60,000 annually which we learned from the last section, may be able to temporarily get you by.

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Back in the late 1960s, the minimum wage could raise a family of three out of poverty. Adjusting that wage to inflation it would equal $10.10 per hour, which is substantially larger than our current minimum wage of $7.25 per hour. Those extra dollars makes a huge difference! Let's say you work 11 hours per day for 6 days a week at minimum wage. You would get an extra $19,071 annually from the $10.10 minimum wage.

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Georgia
16%
Oklahoma
16.3%
Arizona
16.4%
Alabama

17.1%

Arkansas
17.2%
West Virginia
17.9%
Kentucky
18.5%
New Mexico
19.8%
Louisiana
20.2%
Mississippi
20.8%

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Top Twenty Poorest Countries (GDP per capita)

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Top Twenty Poorest Countries (GDP per capita)

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Rwanda                                        $1,905
Kiribati                                           $1,820
Burkina Faso                              $1,790
Haiti                                                $1,784
South Sudan                               $1,670
The Gambia                                 $1,664
Sierra Leone                                $1,651
Guinea-Bissau                            $1,568
Togo                                                $1,545
Comoros                                       $1,529
Madagascar                               $1,504
Eritrea                                            $1,321
Guinea                                           $1,271
Mozambique                               $1,228
Malawi                                           $1,139
Niger                                               $1,113
Liberia                                            $882
Burundi                                          $818
Democratic Republic of Congo $784
Central African Republic $656

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I only briefly went over the last subject due to the fact that I wanted to get into more math. I'll first observe  states in USA by ranking the top ten poorest states and then I´ll show the percentages for other popular states. After that I will conduct a similar process focused on countries of the world.

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The GDP of a country is the gross domestic product, which is basically the total value of all of the services and goods produced by a country. The unit of GDP per capita is a unit usually used to measure the economy of a country. You get this unit by dividing the gross domestic product by the population of the country, and we will be using this unit to aid us in ranking the top countries.

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Top Ten Richest States (By Median Income)

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Top Ten Richest States (By Median Income)

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Washington                            $64,129
California                                 $64,500
Virginia                                     $66,262
New Hampshire                    $70,303
Massachusetts                     $70,628
Connecticut                            $71,346
New Jersey                             $72,222
Alaska                                       $73,355
Hawaii                                       $73,486
Maryland $75,847

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Top Ten Poorest States (By Median Income)

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Top Ten Poorest States (By Median Income)

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South Carolina                       $49,501
Oklahoma                                $49,147
Tennessee                                $48,547
New Mexico                             $46,748
Kentucky                                   $46,659
Alabama                                    $46,257
Louisiana                                  $45,146
Arkansas                                   $41,262
West Virginia                            $41,059
Mississippi                                $39,680

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Top Fifteen Richest Countries (GDP per capita)

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Top Fifteen Richest Countries (GDP per capita)

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Iceland                                      $52,150
Netherlands                            $53,580
Saudi Arabia                           $55,260
United States                          $59,500
San Marino                              $60,360
Hong Kong                              $61,020
Switzerland                             $61,360
United Arab Emirates          $68,250
Kuwait                                       $69,670
Norway                                     $70,590
Ireland                                       $72,630
Brunei                                        $76,740
Singapore                                $90,530
Luxembourg                      $109,190

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Notice the difference between the richest and the poorest countries? The is called the uneven distribution of wealth. We actually touched upon this subject at the beginning of the presentation when we talked about how world hunger could be greatly reduced if the overweight gave a bit of every one of their meals to the poor. This can be applied to several other resources such as clothing, living space, and transportation (the world could have many more Honda's then Ferrari's). Although this is a problem, we cannot abolish this completely. This in order to maintain a meritocratic economy. That basically means that whoever shows superior achievement will be rewarded with power and control. Citizens have the opportunity to move up and down the wealth ladder in proportion to their achievements and skills. Maintaining a meritocratic economy motivates citizens to be innovative and creative in order to get themselves out of the poverty hole.  Without this sort of motivation we basically have a communism. While hypothetically a communism could work, it is rather hard to motivate the society and make sure money is being distributed properly. Also, citizens with more important jobs would feel cheated of their righteous money. Although it is is important to maintain this meritocratic society, it is also important that we ensure that our society has social mobility. Having social mobility means that people are willing to interact with people outside of their social and economic classes. Without social mobility, wealth becomes highly concentrated, the poor hate the rich, the rich fear the poor, and our society is unwilling to work together towards common goals. To sum everything up, while inequality in wealth is terrible, it would be very hard to deal with this with a communist approach. Wealth distribution should be moderated, not controlled.

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Uneven Distribution of Wealth Between Countries

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Uneven Distribution of Wealth Between Countries

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A lot of countries that are very poor were ravaged by slavery and colonization made it onto my chart of the twenty poorest countries. Large scale event mess up economies terribly and these countries are left to deal with the aftereffects on their own. With political corruption and natural disasters adding onto this, the economy of these countries hit close to rock bottom.

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Uneven Distribution of Wealth Between Races

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Uneven Distribution of Wealth Between Races

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Racial wealth gaps are a huge issue, especially in America. An article was written in 2015 stating, "The typical black household now has just 6% of the wealth of the typical white household; the typical Latino household has just 8%..." And in 2011, it was discovered that the wealth of the median white household is $111,146, compared to the $7,113 of a median black household and the $8,348 of a Latino household. Also, a study has been conducted in 2011 showing that 34% of white people completed a four-year college degree, while only 13% of Latinos and 20% of the black population did the same. It was shown that one of the main causes of this was the surge in tuition prices, putting an immense financial strain on parents aiming to send their child to college. It's extremely difficult to survive in the world and obtain a job if you haven't graduated college. In result, you don't have enough money to support your children's college funds, and the cycle continues. One of the only ways to break out of this cycle is with a scholarship, which is why many minority groups depend on sports to get to college.

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Uneven Distribution of Wealth in America

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Uneven Distribution of Wealth in America

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Wealth distribution is a big problem in America. It has caused lots of tension and pain. The poor have been getting poorer and the rich have been getting richer. Many families have suffered for generations because of this problem. As I said in my "Uneven Distribution of Wealth Between Races" section, it is a difficult task to climb out of poverty. Unless actions of direct intervention are taken, this problem probably won't be solved.

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National debt
How economy works