The poor in Africa, Asia and Latin America can’t afford to consume, but Americans consume themselves into poverty. That includes overpaying for real estate.
Have you spent much time in Latin America? The favelas in Rio are full of CD players, TVs, Air Jordan sneakers, etc… Go to any mall in Brazil and look at the price of shoes. There are always TWO prices — the whole price and the weekly price. Yes, that’s right, people in Brazil buy their sneakers on the installment plan.
The only difference in my experience is a matter of degree. Here in America we are more wealthy so our poor people have more stuff. But poor people in other countries consume too much too.
In Peru last year I noticed that none of the farms I saw had tractors. Everywhere I looked people where plowing the earth BY HAND. The “rich” farmers had a couple of oxen or cows rigged to a plow. When I told my guide that our family but their first tractor in 1937, he was astounded. He laughed and said that the Peruvian government had instituted a low-cost loan program for farmers to purchase capital equipment. It was hugely successful, many many farmers signed up. “Then where are the tractors?” I asked; my guide laughed and said that most of the people just bought TVs and cars with the money.
Bottom line is — many many many (not all!) poor people are poor because they don’t understand money or business.
But I will agree that our country needs to do something to ensure that our poverty doesn’t reach the level of those countries. Education, health care, and birth control are really important to achieve that goal in my opinion. A huge uneducated and poor population is extremely dangerous to any free society…
