wlm4 at cornell.edu (Will
01-07-1995, 11:25 AM
Here is an extended quotation from Michael Sherraden and Robert E Friedman,
Corporation for Enterprise Development. I think it argues persuasively for
CDFI-like asset creation for the poor rather than income enhancement.
Our federal approach to poverty has been to focus on income and consumption.
These are inadequate measures of well being. Asset accumulation and
investment, rather than income and consumption, are the keys to leaving poverty.
In 1990 our government spent $125 billion on cash transfer anti-poverty
programs. At the same time we spent a similar amount on asset accumulation
through retirement deductions and home mortgage interest deductions. Thus,
we have an asset-based policy for the non-poor that encourages the
accumulation of wealth, but an income-based policy for the poor that
discourages accumulation. The results are evident: asset distribution is
even more lopsided than the distribution of income. Individuals who count
themselves among America's richest five percent take home the same total
income as the poorest forty percent - but the richest one percent own as
many assets as the bottom eighty percent. In truth the lack of assets and
asset-building incentives is not simply an issue for the poor, but for a
large portion of the middle class as well. Fully one-third of American
households maintain no investable assets, and most that do hold negligible
amounts. Indeed, only a minority of American taxpayers can take advantage
of the tax deductions available through asset subsidies.
Why are assets so important? What do assets do for individuals and families
that income alone does not? Assets have important effects on individual
well-being beyond consumption. Simply put, when peple are accumulating
assets, they think and behave differently, and the world responds to them
differently as well. while incomes feed people's hungry stomachs, assets
change their heads.
Assets improve household stability, by cushoning income shocks caused by
illness, accidents, job loss or marital break-up. Assets allow people to
plan for education, a career or home ownership. Assets enable people to
specialize and foucs their knowldge and skills toward more productive
pursuits. Assets provide a foundation for risk taking: With them, there is
a "safety net" to fall back on. Assets increase social influence. They
foster political participation and community involvement.
In short, assets connect people with a viable future and the world atround
the. If persistent poverty results results from social and economic
isolation, then asset-based poverty policy would be a step toward breaking
that pattern of isolation.
This post transferred from the cdb-l mailing list
Corporation for Enterprise Development. I think it argues persuasively for
CDFI-like asset creation for the poor rather than income enhancement.
Our federal approach to poverty has been to focus on income and consumption.
These are inadequate measures of well being. Asset accumulation and
investment, rather than income and consumption, are the keys to leaving poverty.
In 1990 our government spent $125 billion on cash transfer anti-poverty
programs. At the same time we spent a similar amount on asset accumulation
through retirement deductions and home mortgage interest deductions. Thus,
we have an asset-based policy for the non-poor that encourages the
accumulation of wealth, but an income-based policy for the poor that
discourages accumulation. The results are evident: asset distribution is
even more lopsided than the distribution of income. Individuals who count
themselves among America's richest five percent take home the same total
income as the poorest forty percent - but the richest one percent own as
many assets as the bottom eighty percent. In truth the lack of assets and
asset-building incentives is not simply an issue for the poor, but for a
large portion of the middle class as well. Fully one-third of American
households maintain no investable assets, and most that do hold negligible
amounts. Indeed, only a minority of American taxpayers can take advantage
of the tax deductions available through asset subsidies.
Why are assets so important? What do assets do for individuals and families
that income alone does not? Assets have important effects on individual
well-being beyond consumption. Simply put, when peple are accumulating
assets, they think and behave differently, and the world responds to them
differently as well. while incomes feed people's hungry stomachs, assets
change their heads.
Assets improve household stability, by cushoning income shocks caused by
illness, accidents, job loss or marital break-up. Assets allow people to
plan for education, a career or home ownership. Assets enable people to
specialize and foucs their knowldge and skills toward more productive
pursuits. Assets provide a foundation for risk taking: With them, there is
a "safety net" to fall back on. Assets increase social influence. They
foster political participation and community involvement.
In short, assets connect people with a viable future and the world atround
the. If persistent poverty results results from social and economic
isolation, then asset-based poverty policy would be a step toward breaking
that pattern of isolation.
This post transferred from the cdb-l mailing list