Is the United States population too large for its Economy? I would say yes based on today’s figures. Yes, with respect to equality of citizens and for elimination of poverty. Poverty is a major problem in the United States and across the world, and has been so throughout time. For some reason, it seems that there is no way for one person to become wealthy without impoverishing another. According to the Federal Reserve Bank, the United States has $1.45 trillion in circulation as of April 6, 2016, of which $1.4 trillion was in Federal Reserve notes. Let’s just say that this amount could be liquidated into cold-hard cash equaling $1.45 trillion. The population of the United States as of April 6, 2016 is approximately 323,300,903 according to the U.S. Census Bureau. If you distributed wealth evenly among every citizen, in some kind of egalitarian redistribution, every citizen would have $4,484.98 (no rounding because of closed system). That is barely cost of living in a nice apartment in Manhattan for one month. In my mind I thought that there was so much money in the United States that everyone would have over $100K; needless to say, I was surprised at the numbers.
This basically means that a lot of people have to have much less than this equal distribution number for businesses to operate, and taxes to be levied. Nobody could afford to start a business or pay an employee a living wage with that amount in their bank account. If this scenario were to happen in real life, society would collapse and after one month, the population would be a lot less. It seems that poverty is a built-in function of our economy in the United States.
But why is poverty a necessity for the society to function? Many politicians and social engineers claim that poverty is a real problem that must be eliminated. I am certain that whomever were to eliminate poverty would win a Nobel prize. It seems that nobody really talks about this issue. I only discovered the numbers just now on my own. I have never heard this statistic quoted or talked about at all. Is it a big secret that the society needs impoverished populations? In 2014, 46.7 million people in the United States lived in poverty. If that number remained until April 6th, 2016 that means 14.44% of the population lives in poverty.
In order to eliminate poverty, one would have to provide enough distribution to keep everyone about the Federal Poverty Level of $11,880 for individuals. At April 6th, 2016’s population that means $3.84 trillion ($3,841,138,028,543) would have to be in circulation and distributed evenly. Of course this number is different depending on the family sizes, and the number would actually have to be much greater because realistically it would not be distributed evenly for any duration. That is at least $2.39 trillion greater than the current size of the economy.
However, whenever money is injected into the economy it is called inflation, which has a devaluation force on the currency. This means that one dollar would actually be worth less than before the injection and prices would rise as a result. That in turn would increase the poverty line and so on. An algorithm would be necessary to do the complex calculations, but for this article, this suffices to make the point. So one would have to increase the amount of money in circulation, redistribute it evenly, and somehow value the currency higher artificially in order to prevent inflation. The algorithm, would do magic because it would factor in inflation and give you a number that would achieve the goal.
Basically, until we have some super-smart computer running our economy, poverty will continue to exist. Without poverty, our economy would implode and most likely cause real world, starvation, crime, and deaths. The evidence suggests that if the goal is to eliminate poverty and raise standard of living, the economy must grow, or the population must decrease. Either choice is a difficult one, and comes with their own excess baggage. The solution so far has been to minimally mitigate the effects of poverty on individuals, and accept the fact that poverty will exist for the foreseeable future.
There are other real-world causes of poverty, of course, and I am merely illustrating the cause of its existence from a monetary system point of view and not a socioeconomic or ethical view. Please take what you just read and look for an optimistic future and avoid pessimism.