Understanding Global Wealth Distribution and raising the poor from poverty

It seems there are many people online who do not understand global wealth distribution and do not want to understand what would actually help the global poor or the poor in developed countries.

wealth = real assets + financial assets – debts

The bottom 10% of adults in the world have more debt than assets. The bottom 10% of adults have a combined negative $1.05 trillion in net worth in 2013. The estimate of this negative wealth increased from 2011 when it was negative $500 billion.

$135 billion was provided in foreign aid in 2013.
Social security and medicare in the USA was $1.3 trillion.

Oxfam is calling on governments to adopt a seven point plan:

• Clamp down on tax dodging by corporations and rich individuals.

• Invest in universal, free public services such as health and education.

• Share the tax burden fairly, shifting taxation from labor and consumption towards capital and wealth.

• Introduce minimum wages and move towards a living wage for all workers.

• Introduce equal pay legislation and promote economic policies to give women a fair deal.

• Ensure adequate safety-nets for the poorest, including a minimum-income guarantee.

• Agree a global goal to tackle inequality.

* In places like America very few of these things will happen because of the political situation. Even when things like increase minimum wage is implemented there is still the bottom 10-15% of americans with negative net worth. This is because Americans do not have the Depression era aversion to debt. Taking high interest loans and having debt on credit cards is the problem in America. If you have relatives who are bad with money, then you know giving them money usually does not get them out of debt in a lasting way.

* Good luck trying to get enough jurisdictions to successfully levy taxes on the world’s billionaire’s. They have the best lawyers and accountants working to prevent it and can position money around the world to avoid it.

Taxing the rich was not what got most of the people out of poverty over the last couple of decades globally

China was responsible for three-quarters of the reduction in extreme poverty over the last few decades. Its economy has been growing so fast that, even though inequality is rising fast, extreme poverty is disappearing. China pulled 680m people out of misery in 1981-2010, and reduced its extreme-poverty rate from 84% in 1980 to 10% now.

That is one reason why (as the briefing explains) it will be harder to take a billion more people out of extreme poverty in the next 20 years than it was to take almost a billion out in the past 20. Poorer governance in India and Africa, the next two targets, means that China’s experience is unlikely to be swiftly replicated there. Another reason is that the bare achievement of pulling people over the $1.25-a-day line has been relatively easy in the past few years because so many people were just below it. When growth makes them even slightly better off, it hauls them over the line.

Global poverty results will depend more upon the governance of Prime minister Modi in India then on any increased aid.

Increased US income and corporate taxes would not go to international poverty reduction in Africa and India Less than 1% of the income in developed countries goes to foreign aid

Foreign aid has helped reduce infant mortality but has note helped with illiteracy.

Official development assistance in the world was $135 billion in 2013.

There are many studies asking if foreign aid works. This is because the evidence shows that it mostly does not work.

What do the global poor need

Clean water and safe sanitation
Nutritious food
Better basic healthcare
Smoke free cooking and heating and lighting (prevent 4 million deaths per year)

Preventing stunting by getting more nutrition into their diet.
Clean water and safe sanitation and smoke free cooking and heating would prevent deaths and improve health.

SOURCES – James Davies – Rodrigo Lluberas and Anthony F. Shorrocks global wealth distribution 2014 presentation

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