The Poverty Trap

Welcome to The Poverty Trap, a newsletter and podcast for people who are fed up with the inequality baked into America’s system and want to individually and collectively make change.

“…they [middle-income earners, like teachers, nurses and other skilled workers] can afford only 21.2 percent of all available listings. That’s up from 20.8 percent a year ago — but a far cry from the 49 percent they could afford in 2019.” The New York Times, June 26, 2025.

Home ownership is the American Dream, but not everyone wants in on the deal. Many Americans choose not to buy a home: some don’t want the responsibilities of home ownership, others want a more free lifestyle so they can pick up and move across the country for a job opportunity, for example, without having to sell a home.

But for a growing number of Americans, it is not a choice. They simply don’t have the cash for a down payment and a yearly income to qualify for a mortgage that includes interest and property taxes based on the current market, which is flush with higher priced homes. And an increasing number of these folks are solid, middle-income earners, like teachers, nurses and other highly skilled professionals, defined as making at least $75,000 a year, and who want the security and opportunity to build wealth that comes with owning a home. In fact, middle-income earners make up the largest share of our country’s households, according to a May 2025 report by the National Association of Realtors.

A yearly income of approximately $75,000 (and a good credit score) can get you a $255,000 home, a price point that is increasingly rare in today’s market, with inflation, and now tariffs hiking the cost of building materials, higher interest rates on mortgages, and often higher property taxes.

And for lower-income families that make up a third of U.S. households, forget about it: “…they have almost no access to for-sale homes", according to a recent article in The New York Times.

The graph above, from the U.S. Census Bureau, shows that the overall rate of homeownership has gone up and down by several percentage points over the last six decades, the trends marked by recessions, looser lending practices and a once-in-a-hundred-year pandemic. Currently, the “65% home ownership rate is 1.3 percentage points lower than the [previous] 25 year average of 66.3 percent”, according to the Census Bureau. And this drop translates into approximately 1.7 million more American households that are either renting, looking for a rental property or living with family and friends.

Meanwhile, back at the suburban ranch, “renters are taking over the suburbs” according to a New York Times article published last month. The suburban communities surrounding 20 of the largest metro areas in the country have more than doubled their number of renters in just the last five years:

In an attempt to implement a more strategic direction when it comes to housing construction, developers are shifting their attention away from downtowns, urban cores and main cities. Instead, they are focusing on expanding outwards, toward the towns and suburbs surrounding cities proper, to be able to provide renters with more space and better amenities. Point2 Point, A rental home service.

I don’t think this trend is as benign as Point2 Point spins it. Developers, home builders and leaders in the burgeoning “Build-to-Rent industry see a collapsing market for homeownership among households earning about $50,000 to $90,000 a year, which makes up the largest percentage of households in the country. And they are capitalizing on the soaring costs of home ownership by providing a new crop of single-family rental homes in the suburbs. Yes, these mega investment firms are providing new housing for many in need of, well, housing, but at what long-term cost to the tenants who have little choice, the ever-increasing gap between the rich and the poor and our overall economy? See the 10 year upward trend in the Build-to-Rent industry shown in the nifty graph, below.

Thanks for reading The Poverty Trap! This post is public so feel free to share it and re-stack it—thanks!

I wrote about first-time homebuyers being shut out of the housing market nearly two years ago, and the impact that delay in purchasing a first home would have on their ability to build wealth and pass on generational wealth, thus increasing inequality. And now the barriers to homeownership are spreading to higher income groups and more categories of buyers.

At the time, corporate landlords like Blackrock, Inc. and many others concentrated on buying “starter homes” in less desirable neighborhoods and renting them for exorbitant prices.

Now the focus of investors is to build rent-only planned communities—it’s a lot easier business model than buying up single-family homes here and there, with more money to be had. Wolf Richter, author of “Wolf Street”, a newsletter about business and finance, wrote about the Build-to-Rent business last year, and its genesis is quite interesting.

These are the same landlords — American Homes 4 Rent and Invitation Homes — that were formed in 2012 at the end of the Housing Bust to buy these houses for cents on the dollar out of foreclosure. They know what they’re doing.

For example…

American Homes 4 Rent [AMH] began adding build-to-rent single-family developments in 2017 and is now largely “focused,” as it said, on adding build-to-rent single-family properties through its own homebuilding division, AMH Development Program, for communities of rentals. In addition, it is buying some build-to-rent houses from third-party homebuilders.

I don’t think the suburban sprawl of single-family home rental communities is the best way to provide housing for the millions of Americans shut out of the home ownership market. But I do think the City of Baltimore has a much better solution, spearheaded by its young mayor, Brandon Scott. The city started a 15-year renovation project of blighted neighborhoods, razing some homes and rehabbing others for lower income buyers—specifically to promote home ownership by individuals, not corporations.

For Mr. Scott, 41, who was already planning to run for mayor when he was in elementary school, resurrecting neighborhoods that were left behind was a priority. “To be a true son of Baltimore, I had no choice other than to say we are going to step up in a big way to solve this problem,” Mr. Scott said in an interview.

Funny that a few days ago, President Trump called the City of Baltimore “too far gone” to even consider “saving” by occupying it with U.S. soldiers. And here’s how its forward -thinking Mayor responded:

___________________________________________

How do you feel about middle-income home buyers being shut out of the housing market, the growing trend of more suburban sprawl, this time with more renters than owners, Build-to-Rent communities with corporate landlords, the City of Baltimore’s home rehab project? Please leave your thoughts in the Comment Section below.

The Poverty Trap is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Welcome to The Poverty Trap, a newsletter and podcast for people who are fed up with the inequality baked into America’s system and want to individually and collectively make change.

You might not immediately think of Mariner Finance, which does business in 27 states, as a predatory lender. After all, the company touts its community service, waves its banners at Major League Baseball games, and apparently has pleasant customer service. But it targets people who are in trouble financially, including those who have low credit scores and/or have declared bankruptcy, (Personal bankruptcy, by the way, leads directly to plummeting credit scores for 7-10 years).

This service is not all bad: it extends credit to people who could not otherwise get access to cash from more traditional lenders. The company spins it as an opportunity: “…[Mariner Finance is] an important provider of credit options to those who may have limited access to other sources of consumer credit," [Josh Johnson, founder and CEO of Mariner Finance] said.”

The problems are the origination fee, late payment fees and top tier interest rates (18% - 36% APR) that come with the typical loan from Mariner Finance. A 2025 report from Nerdwallet summarizes its practices and concludes:

Mariner Finance offers small to mid-sized personal loans online and in person. These personal loans may be an option for consumers with bad credit (629 or lower score) and those with a history of bankruptcy, but high rates and fees make this lender a less-than-ideal option for most borrowers.

Mariner also engages in some practices that may not be consumer-friendly, like mailing checks to prospective borrowers to provide unsolicited loans. Even if you have a low credit score, it’s worth your time to compare other lenders before applying with Mariner.

There is also a problem with Mariner Finance’s deceptive loan practices. In 2022, Attorneys General from four states and D.C. sued Mariner Finance, alleging the Company saddled consumers with costly add-on insurance policies that they had never asked for or simply didn’t know were a part of their loans. This case is still ongoing, but six additional states, joined the lawsuit in 2024, and additional charges were added, including its use of “illegal, aggressive sales tactics to extend credit to new borrowers”, like the “live check” pictured above, that I recently received in the mail. According to the complaint in the updated case:

Mariner mails hundreds of thousands of unsolicited “live checks” to consumers. Once consumers cash these checks, Mariner aggressively pushes them to visit a branch to refinance and take out additional debt, which typically comes with hidden add-on products, even if it’s not in the best interest of the consumer.

North Carolina was one of the states which joined this lawsuit last year, and here’s what its Attorney General at the time, Josh Stein, said about adding its state to the suit:

But wait, there’s more. The photo below is the back of the Mariner Finance “live check’ I received. As far as I know, the language I highlighted is legal, but what borrower will read, let alone understand the importance of how their monthly payments are applied, and what it will mean to the final cost and length of their loan? In other words, the lender isn’t going to tell you in what order your loan charges will be paid off—it’s up to them.

We apply all payments you make first to late and other charges, then to Finance Charges and then to the Principal Amount, or in any other order we want. [Empasis Added].

And when there are heaps of fees, finance charges and the cost of insurance policies added to your account without your knowledge, it makes a huge difference to you that your monthly payments are applied to the original amount you borrowed dead last, after all other fees and added on charges. This means very little of your monthly payments are allocated to paying down the principal amount of the loan.

Enough about Mariner Finance, there are plenty of other predatory lenders waiting to pounce on the poor and working class. These sharks have been targeting the most susceptible, weakened consumers for decades, but the larger the financially desperate population grows, so does the lenders’ customer base. And when tens of millions of Americans are kicked off their health insurance and food stamps by “The One Big Beautiful Bill” in a year or so, predatory lenders will rake in even more profits on the backs of the our most vulnerable populations.

ProPublica published an in-depth investigative piece in late June describing predatory lenders in Tennessee titled: “You’re Already Approved: How One Tennessee Company Sets a Debt Trap”. Yes. A debt trap and a poverty trap. That company is Advance Financial, which used a loophole in a Tennessee law passed in 2014 called “The Flex Law“, that allowed a different type of loan—one that allowed pay day lenders to reborrow or rollover a customer’s original loan and borrow additional money, incurring more debt, more fees and other charges nearly impossible to pay off. In Tennessee’s original payday lending law passed in 1997, reborrowing or rolling over a pay day loan was forbidden.

Worse yet, the Flex Law’s sponsor, then Majority whip in the Tennessee house and now speaker of the House, Cameron Sexton, was also a banking executive and on the board of a local bank at the time the Flex Law was passed, and still holds both positions today. In fact, Sexton and other Tennessee lawmakers were approached by the Chairman of Advance Financial to create a new type of high-interest loan that would avoid federal oversight, he told the Nashville Business Journal. (In 2013, the Consumer Financial Protection Bureau had issued a report about the dangers of payday loans and many in the lending industry assumed federal regulations were imminent.)

Representative Sexton also received over $105,000 in contributions to his campaign and political action committee from Advance Financial and its affiliated PACs since the law was passed, making them one of his largest campaign contributors.

After enticing customers to keep borrowing, the company had no problem suing its borrowers and garnishing their wages for payback of loans it knew they could never afford —and mostly the Company won. The personal stories of the borrowers interviewed are heartbreaking—one woman wanting to buy Christmas presents for her children and grandchildren, another living on a meager disability check. According to these interviews:

All but one of the 14 borrowers who spoke to the newsrooms for this story reported having reborrowed at least once as part of their Advance loan. As with Thomas [one of the borrowers] Advance made them eligible to borrow more shortly after paying, even though they were often making the minimum payments and almost immediately borrowing the money back to cover the cost of the payment they just made. Advance went on to sue 12 of these borrowers once they stopped being able to afford the loan.

_________________________________________________

I’d love to hear your thoughts on these issues. Should payday loans be banned? Do you think the “system is rigged” against the poor, working class and average consumer? Do you see why we might need the Consumer Financial Protection Bureau to help borrowers and credit card holders escape these debt and poverty traps? Please leave your thoughts in the Comment Section below.

The Poverty Trap is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Welcome to The Poverty Trap, a newsletter and podcast for people who are fed up with the inequality baked into America’s system and want to individually and collectively make change.

A few poor choices and mistakes, combined with a lot of “No’s” on job applications contributed to the loss of my home and later, my unfortunate ability to meet the incredibly low income limits for both Medicaid and food stamps. Although I am finally off these programs that literally saved my life for the last five or six years, tens of millions of low wage workers will not even have the basic medical care and money for food for themselves and their families that I did. And this is a direct result of the legislation signed into law by President Trump on July 4, 2025.

The Republicans voted to slash both health care for the poor and cards loaded monthly with money to buy food (SNAP) to the tune of over $1 Trillion: The new law will reduce federal funding for Medicaid by $863 billion and for SNAP by $295 billion over 10 years. Independent sources, like the Congressional Budget Office (CBO), estimate:

…the bill will cause 10.9 million Americans to become uninsured, either from the loss of Medicaid or from coverage losses in the Affordable Care Act (ACA) marketplace. An additional 5.1 million people will lose coverage when the enhanced marketplace premium tax credits expire at the end of 2025, among other reasons.5 Together, the number of uninsured Americans could be 16 million higher in 2034 than it would be without these changes. The CBO further projects that the bill will lower SNAP enrollment by an average of 4.7 million, and that Americans remaining in SNAP will see their nutrition allotments reduced.6

Conveniently, the law’s cuts to Medicaid and food stamps won’t go into effect until January 2027—after the mid-term elections—and these cuts and other “reverse-Robin Hood” changes won’t be fully phased in until 2029.

Below is a handy graph prepared last month by The Commonwealth Fund that shows the phase-in of these cuts by year.

I can tell you from first-hand experience that it is very difficult to fill out the applications and gather the paperwork to receive government benefits; in fact, it is so confusing and downright onerous, that I have to believe it’s purposeful. After all, the fewer people who apply, the fewer applications have to be reviewed, the fewer recipient files to maintain, and fewer federal and state dollars must be spent. So why not make these benefits difficult to get?

And you will get “No’s” at nearly every stage of the application process, even if your financial submissions prove you qualify—you just have to slog through and persist, even if you’d rather cry and give up. Now, imagine what having to document the new work requirements will do to this already complicated process.

Georgia imagined it, and is currently the only state in the country to have Medicaid work requirements in place. Two investigations by ProPublica show that the nearly two year program is a dismal failure, with only a small fraction of the eligible recipients enrolled in the program. The state still hasn’t hired nearly enough workers to process the applications and verify the monthly work requirement documentation. According to the ProPublica report: “The challenges were steep enough that Georgia has decided to loosen its work verification protocols from monthly to once a year.”

Georgia spent close to $100 million in federal funds to implement its program with over $55 million of the money going to consultants and IT staff to set up the digital platform necessary to administer the program. Yet, “as of May 2025, [only] approximately 7,500 of the nearly 250,000 eligible Georgians were enrolled, even though state statistics show 64% of that group is working.” Despite its massive investment in the platform, technical glitches, like crashing systems, turned away many applicants. One single mother, Kelsey Williams, who tried three times to apply told Pro Publica:

“You’d go from one robot voice to another,” said Williams, who worked irregular hours as a convenience store clerk outside Macon.

No one called back. She gave up after nearly a month of trying. “I got the feeling that they really didn’t want to help me,” she said.

Both Georgia law and the new federal law require those ages 19-64 to work 80 hours a month, and allows for both paid and volunteer work. What if you only have a part-time job, say 15 hours a week (which is why you will qualify for free health care and food in the first place), and under the new requirements, you must document an additional five hours a week or 20 hours per month. Do you somehow find a second five hour a week job, or worse yet, volunteer for the remaining time as the new law allows as an option? As much as I enjoy and tout volunteer work in our communities, and volunteered myself for decades, it is an insult to require people who are likely spending most of their time and energy working part-time and applying for full-time jobs, to add to their unpaid work… with more unpaid work.

By the way, most people who qualify for Medicaid and SNAP are already employed at least part-time.

I’m including an updated report from the Kaiser Family Foundation (KFF) that demonstrates through statistics and the use of fun grafts and charts, the impact of these new work requirements on current and potential Medicaid recipients and the intersection of health insurance coverage and work requirements..

But there is another issue directly related to the nearly 17 million additional Americans who will not have health insurance of any kind, and the extra 4.7 million Americans who will lose their food benefits entirely or receive reduced help when the “One Big Beautiful Bill” is fully phased in: cue the predatory lenders and debt collectors. These “businesses” will position themselves to rake in profits on the backs of those choosing among health care, food and basic necessities. I’ll be writing about this connection next week.

__________________________________________

Let me know your thoughts on the gutting of our social safety net that is now law. Can we do anything to stop it or minimize its impact? Leave a comment below—I’d love to hear your ideas…because we sure need ideas.

The Poverty Trap is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

*Welcome to The Poverty Trap, a newsletter and podcast for people who are fed up with the inequality baked into America’s system and want to individually and collectively make change.

“Public lands eligible for sale in the bill encompass over 250 million acres, including local recreation areas, wilderness study areas, inventoried roadless areas, critical wildlife habitat and big game migration corridors.” Wilderness Society Analysis of the One Big Beautiful Bill Act as of 6/16 2025. NOTE: On June 23, the Senate parliamentarian flagged the public lands’ sale for removal from the [Sen R. Reconciliation] bill because it “contains material extraneous to the budget reconciliation process” under the Byrd Rule.

In my last post, I wrote a bit about the idea of loss, and what we have been losing as Americans in just in the last 6 months — our values and ideals, and even the hope to pursue the elusive American Dream. And the losses continue.

* “If an individual is denied coverage or disenrolled because they do not meet the Medicaid work requirements, they would be ineligible for subsidized marketplace coverage.” CNBC Analysis published June 25, 2025.

Welcome to The Poverty Trap, a newsletter and podcast for people who are fed up with the inequality baked into America’s system and want to individually and collectively make change.

The history of “we the people” protesting our government and its policies has been a strong and fairly successful one, steeped in the human desire to be free and to affect societal change. The U.S. is a representative democracy, and if those we elect don’t do our bidding, it is our right under the First Amendment to peacefully protest their policy choices and actions and to eventually vote the current batch of representatives out of office. The photo above from the National Archives is classic— it captures a violent, humiliating moment in a peaceful protest, organized by students and teachers, to finally de-segregate a “whites only”, dime-store lunch counter.

Many legal scholars, journalists and other writers say we’re on the verge of losing our democracy, that the current administration is on a plotted course to dictatorship. And I agree.

But the questions right now are: what we do about it, and whether taking to the streets in protest is enough. Are there enough Americans who understand what is happening and are willing and able to march in their communities? Are there enough Americans who care?

The Nobel prize-winning economist, author and concerned citizen, Paul Krugman, wrote a Substack post yesterday saying “American democracy is on the line, right now.” Krugman says that the federalizing of the California National Guard against the wishes of both Governor Newsom and Los Angeles Mayor Bass, and the U.S Marines deploying to California with the intent to quell dissent, demonstrate President Trump’s true intent—it is about shutting down Americans’ right to protest his administration’s policies. Period. It’s not about improving his sagging poll numbers or making a popular policy choice, it’s about shutting you up and shutting you down. Krugman highlighted this gem from Governor Newsom’s speech a few days ago:

Democracy is under assault right before our eyes, this moment we have feared has arrived. He’s taking a wrecking ball, a wrecking ball to our founding fathers’ historic project: three coequal branches of independent government.

But quashing public dissent is only part of the plan, according to Robert Reich, former Secretary of Labor, prolific author and recently retired professor. Reich’s Substack post from last week is a master class in understanding how a democracy is dismantled, piece by piece, by controlling and then dissolving our education system. Reich outlines, with examples, five specific ways the Trump Administration is attacking how we learn and how we think by:

—Rewriting history

—Gutting all levels of formal education

—Dismantling science

—Suppressing the media

—Attacking the Arts

Because an educated public is dangerous:

Throughout history, tyrants have understood that their major enemy is an educated public. Slaveholders prohibited enslaved people from learning to read. The Third Reich burned books. The Khmer Rouge banned music. Stalin and Pinochet censored the media. And Trump, like past authoritarians, wants to control not just what we do, but also how and what we think. Robert Reich, June 3, 2025

As many of us as possible, must peacefully and publicly protest in whatever ways we are able. It is indeed, “We the People”.

We have a renowned economist, a former cabinet secretary, a sitting member of Congress and many other prominent thinkers saying our country is on the brink of authoritarian rule, but those voices pale in comparison to the quiet strength and eloquence of “The Boss”. Here is Bruce Springsteen speaking to a massive crowd the size of which is only in President Trump’s wildest dreams. Are we losing our will to fight, our joy, our belief in our country’s values? “Raise your voice”.

Do you think America is slipping into a dictatorship at this moment? Are public protests enough? I’d love to hear your thoughts in the Comment Section below:

The Poverty Trap is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Welcome to The Poverty Trap, a newsletter and podcast for people who are fed up with the inequality baked into America’s system and want to individually and collectively make change.

Enjoy this clip of Senator Joni Ernst (R Iowa), trying to explain to her constituents how they would be “protected” under President Trump’s “Big, Beautiful Bill”…that slashes Medicaid by over $700 billion.

____________________________________

The “Merry Month of May” has left me with too much to do and too few hours to dedicate to post writing. Please forgive my tardiness, and know that I will be back on a weekly schedule starting today.

In the last week or so, while our heads are still spinning over the tariffs, deportations and the administration’s other unsavory deeds, the press and freelance journalists are writing a lot about two issues: the simultaneous slashing of federal programs to help the poor and middle class, like Medicaid and food stamps, and the billions of dollars in graft “brazenly” raked in by the Trump family at work. These two efforts go together, hand in glove, and seem to be part of a purposeful strategy to enlarge the already massive wealth gap in our country. Or is it “simple avarice” on the part of a few with no greater plan, like an overthrow of our democracy?

First is the proposed budget bill supported by President Trump and all House Republicans: it literally takes food out of the mouths of poor children and gives that money to the super rich in tax cuts and subsidies to boost their businesses.

At the same time, the President and his family, among other government officials and mega-company CEO’s, are trading official business of the government for money. Large amounts of money, in the billions of dollars, that benefit only President Trump, his family and other super wealthy people. This is called corruption and graft.

Let’s start with those cuts to Medicaid, our country’s health insurance for the poor. Everyone’s been talking about the irrepressible Iowa Senator, Joni Ernst and her cruel, flippant response to her constituents and the entire country at a recent town hall.

While trying to defend the huge Medicaid cuts included in President Trump and the Republican party’s “big, beautiful bill”, she responded to a town hall constituent who stated the obvious: “People will die.” The good Senator quickly responded with her own profound statemement: “Well, we are all going to die.” Hey thanks, Senator. I think we all realize we’re going to die at some point, but we don’t believe our death should come purposely by the hand of our own government.

And here’s what Speaker Johnson had to say about slashing the Medicaid budget:

Republicans stress that their version of the bill aims to create savings in Medicaid by targeting "waste, fraud and abuse," in the system. Speaker Mike Johnson has said the proposal includes going after those who are "defrauding the system."

I understand there may be some waste involved in administering any federal program, but let me assure you from first-hand experience — very few, if any people receive Medicaid without meeting its embarrassingly low earning requirements. And each penny you earn must be proven with pay stubs, bank account statements and sometimes signed letters from your boss stating on company letterhead how many hours you work and your pay, particularly if you only work part time. If you are one of the perhaps handful of people in the country crafty enough to outsmart this system, you deserve the benefits.

While you’re riled up about Senator Ernst’s flippant remark and her snarly, sarcastic “apology” to her constituents, read this perfectly written take down of Senator Ernst by JoJoFromJerz

“Well, we all are going to die.” That’s not just callous. That’s not just tone-deaf. That’s a moral collapse, broadcast live. That’s the mask slipping, the curtain pulled back on exactly what this Republican Party thinks of you, me, and anyone who isn’t padding their campaign coffers.

In this week’s New Yorker, Evan Osnos wrote a sprawling, intense article about the profiteering going on in our current administration, aptly titled “Donald Trump’s Politics of Plunder”.

It describes in great detail the pay-to-play dealings that have raked in hundreds of millions and more for the first family, and how a few progressive, elected officials (Senators Bernie Sanders Elizabeth Warren and Chris Murphy, Representative Alexandria Occasio-Cortez among others), the group Patriotic Millionaires, and millions of ordinary citizens are trying to call out the graft.

Trump has sold influence so briskly that the political machinery cannot keep up. After he was offered a four-hundred-million-dollar gift from the government of Qatar—an airplane so opulent that it was dubbed the “palace in the sky”—Dan Pfeiffer, a former White House communications director, called it “the most brazenly corrupt move by any President in U.S. history, and it’s not close.” Less than a day later, a crypto venture owned by the Trump family auctioned off a dinner with the President at one of his golf clubs. The family profited from the crypto auction twice over: from fees, which have so far netted them and their partners three hundred and twenty million dollars, and from their own stash of Trump-branded coins, which had grown in value to $4.1 billion even before the auction was complete. (emphasis added).

ABC’s George Stephanopoulos also called out President Trump and his family for “brazen corruption’ during the opening remarks of his June 1 show. You can read the Daily Beast article detailing specific incidences of corruption, along with the video clip here, but I’ll provide a few highlights:

“The scale is staggering,” the ABC host said. “President Trump and his family are making hundreds of millions, potentially billions of dollars as Trump and his administration take official actions that benefit contributors and investors.” (emphasis added).

Stephanopoulos also cited a report in the Atlantic by David Frum, which analyzed the overwhelming number of ways the Trump family is selling our country to the highest bidder. This is how Frum summed it up:

“‘Nothing like this has been attempted or even imagined in the history of the American presidency,’ he writes,” Stephanopoulos said.“ ‘Throw away the history books, discard feeble comparisons to scandals of the past …The brazenness resembles nothing seen in any earlier White House. This is American corruption on the scale of a post-Soviet republic or a post-colonial African dictatorship.”

The depth and scope of the Trump family graft is hitting so fast that no one can fully keep up, although a few journalists and elected officials are trying to inform enough people to possibly make a difference in the outcome. So far, it’s not working. If the proposed Republican legislation passes and the corruption is allowed to continue, the resulting expanded inequality gap could break the system.

————————————————————————

What do you think about the proposed legislation slashing our country’s already meager social safety net, the remarks by Senator Ernst and the blowback she’s getting, the corruption in our Oval Office? Let me know in the Comments Section below:

The Poverty Trap is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Welcome to The Poverty Trap, a newsletter and podcast for people who are fed up with the inequality baked into America’s system and want to individually and collectively make change.

“In moments of candor, they [the founding fathers] acknowledged that it was simple avarice or greed to continue to exploit enslaved labor.” Jeffrey Rosen, president and CEO of the National Constitution Center, Philadelphia.

It seems everyone is up-in-arms about the Republicans’ current budget proposal that includes cuts to Medicaid, adds work requirements to get Medicaid, and slashes food benefits to our country’s neediest. And according to those working on the frontlines of healthcare, some elected officials and economic observers, we are worried for good reason:

— An excellent analysis of the proposed Medicaid cuts by the Substack newsletter, The Big Picture includes data from a preliminary Congressional Budget Office (CBO) memo outlining the bill’s potential impact on current Medicaid recipients: Between 2025-2034, approximately 8.6 million poor and working class Americans will lose their health insurance, and according to The Big Picture’s breakdown of the data, including some additional health care cuts, the number of newly uninsured could reach 13.7 million people by 2034.

It’s important to emphasize that these cuts do not actually have to happen. This is a policy choice by Republicans to prioritize tax cuts for the wealthy over basic healthcare for the poor. The Big Picture, May 13, 2025

Here is a chart from The Urban Institute that breaks down the demographics of those currently receiving Medicaid. Although the vast majority are already working, this proposed bill requires an onerous work tracking system that will be difficult for recipients to complete and costly for states to administer.

— In a Washington Post opinion piece, columnist E. J. Dionne discusses the cruelty inherent in the proposed Medicaid cuts. It won’t just leave millions without health care, it will eliminate funding that supports the least powerful Americans, and areas of our country with the least resources: children and rural communities. Specifically, these drastic cuts to Medicaid and other health programs—nearly $715 billion over 9 years—will directly impact children’s hospitals and rural hospitals, doubtless leaving sickness and death in its wake, and turning underserved communities into health care deserts.

Stephen Teach, a pediatrician at the University of Vermont Medical Center who spent a quarter-century at Children’s National Hospital, told me that Medicaid cuts “could really challenge children’s hospitals’ very existence… “If Medicaid cuts were put into effect, you’d see attrition among rural medical practices that are already struggling,” he said. “It’s an existential moment for children’s hospitals and other hospitals dependent on Medicaid.” (The Washington Post, E.J. Dionne, Opinion Columnist. May 13, 2025).

— Meanwhile, back in the House of Representatives, Republicans are busy marking up the draft reconciliation bill to include even harsher cuts to Medicaid in order to bring its most conservative members to support it. But in the war of words that has ensued since the draft was proposed, Democrats, here Rep. Frank Pallone from New Jersey who is the ranking Democratic member of the House Energy and Commerce committee, attempted to clarify the true cost of the bill:

This is not trimming fat from around the edges, it’s cutting to the bone. The overwhelming majority of the savings in this bill will come from taking health care away from millions of Americans,” he [Rep. Frank Pallone, D.NJ ] added. “No where in the bill are they cutting ‘waste, fraud, and abuse’ — they’re cutting people’s health care and using that money to give tax breaks to billionaires.” NBC News, May 12, 2025 Read what else Rep. Pallone has to say about the proposed bill here.

— Journalists covering the economy and a Nobel prize-winning economist, for example, are also speaking out about the short and long-term impact of these drastic cuts to Medicaid. A Washington Post opinion columnist, Catherine Rampell, recently wrote an excellent piece analyzing the overall impact to the economy, factoring in the tariff upheaval and job cuts, and warning that cuts to the social safety net could deepen and prolong any coming recession:

Not only are these programs [Medicaid and food stamps] compassionate on an individual level, but they also help automatically stabilize the overall economy and pull it out of a downturn. That’s because mass hardship can become self-perpetuating, as laid-off workers cut back on spending and other economic activity, leading to even more layoffs. But safety-net programs swoop in and automatically boost sagging aggregate demand, effectively stimulating the economy and helping it recover faster.

— Paul Krugman —yes, he’s the Nobel Prize-winning economist I mentioned above—wrote a post just a few days ago on his Substack newsletter titled, “Attack of the Sadistic Zombies”, where in part, he compared the first Trump tax cut bill (the 2017 Tax Cuts and Jobs Act (TCJA) to the Republican’s current proposed bill:

The TCJA, like the current legislation, gave big tax breaks to the wealthiest Americans. But it also threw a few crumbs to people further down the scale. By contrast, the House Reconciliation Bill, by slashing benefits — especially Medicaid — will cause immense, almost inconceivable hardship to the bottom 40 percent of Americans, especially the poorest fifth.”

_______________________________

“Almost inconceivable hardship…”. Sadly, this type of cruelty by elected officials is nothing new.

In the 1930’s and 1940”s, FDR attempted to include health care for all as part of the New Deal, but it was shunted aside. The “1935 Social Security Act created the old-age and unemployment insurance systems we have today, with no provisions for health care coverage.”

When Harry Truman assumed the presidency after Franklin Roosevelt’s death, he was a proponent of universal health care—an issue he understood well after his enlistment in the Army during WW I, where he saw many of the new, young recruits rejected because of poor health, which he attributed to the lack of basic health care.

In a draft message to Congress in 1947, Truman wrote: “Healthy citizens constitute our greatest natural resource, and prudence as well as justice demands that we husband that resource. … as a nation we should not reserve good health and long productive life for the well-to-do, only, but should strive to make good health equally available to all citizens.”

But the universal health care bill never got to a vote because of a vigorous campaign by the American Medical Association(AMA) and the first ever national PR campaign which dubbed the plan, “Socialized Medicine”. President Truman considered this loss the “greatest disappointment of his presidency”.

The AMA advocated for private insurance instead, and these plans became more accessible during the 1950’s and into the 1960’s. A health care social safety net was finally established in 1965 with President Johnson’s signing the Medicare and Medicaid Act. But let’s not forget today’s lonely, progressive voices that continue to fight for universal health care as a right, rather than as a for-profit industry.

______________________________________

Providing healthcare for all Americans, let alone slashing the budget to take away health care for our poorest, is a moral is…

Welcome to The Poverty Trap, a newsletter and podcast for people who are fed up with the inequality baked into America’s system and want to individually and collectively make change.

I put together an end-of-month, link round-up highlighting a few of my favorite Substacker’s recent posts, and one from The Poverty Trap published in September of last year. I believe there’s a common thread running through the first three posts — outside of Robert Reich’s call to action — a question I’ve been researching and writing about for the last 10 years or so: What is it, exactly, about the American system that it chooses not to help the poor in any significant way, in fact, to punish the poor and at the same time help the rich get richer by our laws, policy choices, and perhaps most powerfully, our myths about the poor. I think these posts will give us some clarity.

— First up is a great piece from Untrickled by Michelle Teheux, which discusses the alleged virtues of working long hours for low pay…and examines why we think this is a good thing.

I have worked a list of s**t jobs a mile long. None of them built my character. But we have concocted all kinds of myths in order to convince poor people to do shitty jobs for low wages so that the upper classes can enjoy the cheap labor of poor people and their children.

https://substack.com/home/post/p-162418827

— Speaking of punishing the poor…American Inequality written by Jerremy Ney, recently published a detailed post explaining why President Trump’s tariffs are a tax on the poor:

The Trump administration is largely of the belief that tariffs may hurt Wall Street but benefit Main Street. We’ve heard this consistently in talking points, but it is far from the truth. Not only do lower income or middle class Americans also own stock typically through their 401K plans, but they will also suffer higher prices for all goods because tariffs don’t happen in a vacuum — other countries respond, high walls means goods need to go somewhere else, and tariffs are effectively a consumption tax, which disproportionately impacts low-income Americans who spend a larger share of their earnings on consumption.

— Shortly after the democratic convention last year, I wrote about Michelle Obama’s incredible speech where she discussed the impact of “generational wealth” and how it amounted to affirmative action for the rich. Here’s what I said about keeping the poor, poor regarding admissions to elite colleges, which can set its graduates on the path to wealth:

If a prospective student is fortunate enough to be born into a family that could not only afford to send their child or children to an elite college, but who also had attended that same elite college and/or was able to make donations to the institution’s endowment fund, that student literally got a boost in the admissions process, an extra check mark next to their name that will be considered when deciding whether that student gets the opportunity to enter its hallowed grounds…and a leg up in earning the money their parents did.

— It may be helpful to end this link round-up with a call to action from Robert Reich at the 100 day mark of Trump’s second presidency, a presidency that has done nothing but cater to the rich and trounce the lowest wage earners and what’s left of our country’s middle class. He discusses how elected officials, major players and regular folks can come together to stop our slide into an authoritarian regime:

Friends, we have witnessed what can happen in just the first hundred days. I’m not at all sure we can wait until the 2026 midterm elections and cross our fingers that Democrats take back at least one chamber of Congress. At the rate this regime is wreaking havoc, too much damage will have been done by then.

The nation is tottering on the edge of dictatorship.

We are no longer Democrats or Republicans. We are either patriots fighting the regime or we are complicit in its tyranny. There is no middle ground.

_______________________________________________

I’d love to hear what you think about each of these posts, and how and why our country still operates based on myths about the poor, and why our country quite literally punishes the poor for their lack of money. Please share your ideas in the Comment Section below:

The Poverty Trap is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Welcome to The Poverty Trap, a newsletter and podcast for people who are fed up with the inequality baked into America’s system and want to individually and collectively make change.

I don’t believe the title of this post is the least bit dramatic. It is, unfortunately, simply factual. I’ve included below the full post I wrote in September of last year, after the first and only presidential debate, titled: “Ohio’s Governor On Pet Eating And The Demonizing of Immigrants”. This isn’t where the lies started, or where they will end, but the fact that a post-debate poll found that “A whopping 76 percent of likely voters who currently support former president Trump either believe that Springfield’s Haitian immigrants are eating their neighbor’s pets or reserve the right to scapegoat them in the future…without a shred of evidence and with Republican party officials denouncing these lies as “garbage”, is astounding.

It is also astounding that the current administration and Republican members of Congress continue to claim that “illegal” immigrants receive social safety net money, specifically, Social Security, Medicare and Medicaid benefits. No, they do not.

Documented immigrants — such as those with permanent status and dual intent temporary visas — pay the payroll taxes that contribute to Social Security and Medicare, according to Tara Watson, a senior fellow at The Brookings Institution and author of the book “The Border Within: The Economics of Immigration in an Age of Fear.”

Generally, undocumented immigrants are not eligible for Social Security or Medicare benefits, Watson said, but they may pay in to the programs anyway…When asked about Vance’s statement that undocumented workers are draining Medicare and Social Security, HHS spokesperson Renata Miller said: “These claims are false and they serve as a distraction from the health care concerns that everyday Americans care about. CNBC article, October 1, 2024

Just last week in a CNN town hall with both Republican and Democratic members of Congress, Rep.Mike Lawler, (R New York), repeated the claim that illegal immigrants receive Medicaid (specifically referring to the state of New York in the clip below), and neither the two democratic representatives nor the CNN hosts corrected him in real time, or from what I have read, any time after the town hall. This failure to hold elected officials accountable for directly lying to the American people, to the world, is a good part of what is causing the downward spiral of our democracy.

This past February, The New York Times published a fascinating piece discussing how President Trump is using lies and distortion to drive draconian changes to our government. And a few days ago, The Times published a lengthly article detailing why the claims of massive fraud Elon Musk was making about both the Social Security program and unemployment benefits were false, yet both he and President Trump continue to double down on these lies. But what did the voting public expect when President Trump, in a presidential debate no less, (followed by Vice-President Vance and others doubling down at every opportunity) insisted that immigrants were eating dogs, cats and geese in Springfield, Ohio?

And it is this torrent of lies that have paved the way for the Trump administration to ignore a United States Supreme Court order, and also has paved the way for at least some of us to ignore it too.

Ohio's Governor On Pet Eating...And The Demonizing of Immigrants

Humans Know How to Repeat A Pattern

JOAN DEMARTIN

SEP 29, 2024

This post goes out to both free and paid subscribers, but if you are not already a paid subscriber and value this effort and our growing community, please consider upgrading to a paid membership. Thanks in advance for your financial support of my work —it’s what allows me to keep researching and writing!

After the City of Springfield, Ohio received over thirty bomb threats requiring the evacuation of government buildings and schools, and the cancellation of in-person classes at Wittenberg University, six Ohio lawmakers requested emergency law enforcement funding from U.S. Attorney General Merrick Garland. Photo below, courtesy of The Columbus Dispatch via Liz Dufour, Cincinnati Enquirer

“The national attention crested after Ohio Sen. JD Vance posted claims without evidence about Haitian immigrants abducting and eating dogs and cats on social media. Former president Donald Trump repeated the claims during the presidential debate with Vice President Kamala Harris, despite local and state officials saying the claims are false.” Columbus Dispatch, September 26, 2024

No matter how many times the Republican mayor and law enforcement personnel of the City of Springfield, Ohio, the president of Wittenberg University, and even the Republican governor of Ohio, Mike DeWine, state that there are “no credible reports” whatsoever, of any of the legal, Haitian immigrants living in Springfield, eating people’s pets, or geese roaming in its parks, over half of current supporters of former president Trump still choose to believe the Trump—Vance campaign, rather than their government officials and legitimate news sources. This is not a point for welcome and necessary protest of our government’s policies, nor is it a matter of opinion. There is simply no evidence these statements are true, and the lies are directly causing harm to all in Springfield, and for that matter, to all U.S. cities and communities.

According to a post-presidential debate survey taken by YouGov and reported in a September 17, 2024 article in The Hill:

…22 percent of Trump-backers say they think the debunked lies that have spread about migrants abducting dogs and cats to eat are “definitely true,” while 30 percent said that they are “probably true.” Another 24 percent said they aren’t sure.

A whopping 76 percent of likely voters who currently support former president Trump either believe that Springfield’s Haitian immigrants are eating their neighbor’s pets or reserve the right to scapegoat them in the future…without a shred of evidence and with Republican party officials denouncing these lies as “garbage”

"There's a lot of garbage on the internet and this is a piece of garbage that was simply not true, there's no evidence of this at all," he [Ohio’s Republican Governor, Mike DeWine] told ABC's "This Week."

Governor DeWine also wrote an Opinion piece for The New York Times detailing his and his wife’s deep connections with the City of Springfield, his trips to Haiti as a Congressman and the City’s nearly 200 years of welcoming and assimilating immigrants, exactly as our country (mostly) has done. Governor DeWine did not, however, decline to support the Trump—Vance ticket as hundreds of his other Republican colleagues have done, but managed to say he was “saddened” by their choice to attack, and then double and triple down on their attacks of Springfield’s Haitian immigrant community.

We are almost entirely a nation of immigrants,1 yet many in our country have demonized and scapegoated each new immigrant group as they tried to assimilate into our country. Now, this fear mongering is amplified through social media, and consequently, more, perhaps otherwise sane people, believe lies. The only antidote to lies is the truth, and that is what our justice system attempts to unveil—the truth through the presentation of facts, and the analysis of those facts by a judge and the peers of the accused.

The Mayor of Springfield, Rob Rue, recently stated that the lies perpetrated by former president Trump and Senator Vance have cost the city “hundreds of thousands of dollars”, according to a CNN report published on September 22, mostly due to antagonizers calling in bomb threats and the resulting evacuations of public buildings, schools and even grocery stores. On September 24, , a nonprofit Haitian community group filed criminal charges against both Trump and Vance. Here is wh…

Welcome to The Poverty Trap, a newsletter and podcast for people who are fed up with the inequality baked into America’s system and want to individually and collectively make change.

An 18 minute clip from The Daily Show: Jon Stewart interviewing Mathew Desmond, Pulitzer Prize winning author of Evicted, and most recently author of Poverty, By America. Well worth your time if you want to better understand some of the reasons why we still have substantial poverty in the richest country on earth.

“The average family in the bottom 20% of the income distribution, the poorest families, they are receiving about $26,000 a year from the government. The average family in the top 20%, the richest families, are receiving about $35,000 a year from the government. This is the true nature of our welfare state. They [the richest families] are getting about 40% more than the poorest families. Then we have the, like, audacity, the shamelessness, to look at a program that would reduce childhood poverty or make sure everyone had access to a dentist, and be like, ‘Gosh, how can we afford it?’ “ Mathew Desmond interview with Jon Stewart, March 3, 2025.

The question I posed is this: “Is it really that hard to eliminate poverty in America?” I believe the answer is a resounding “no”. But I also believe there must be a profound, cultural and moral shift in attitudes about the people who have fallen into poverty, for whatever reasons, and those pushed into homelessness and poverty by our laws and policy choices, before meaningful change can be made. After all, the reason why America’s wealthiest receive 40% more in subsidies from the federal government than the poorest is because it is designed that way through laws, which reflect the choices of our elected officials, and ultimately reflect our voting choices. But we can change the design of our system through our vote.

In his acceptance lecture for the Nobel Peace Prize in late 1964, Dr. Martin Luther King, Jr. said:

“There is no deficit in human resources; the deficit is in human will.” MLK, Jr. in his Nobel Peace Prize lecture presented December 11, 1964, where he addresses the failure to end poverty.

And sixty-one years later, there apparently remains a deficit in human will.

I had the pleasure of attending Mathew Desmond’s talk at the Columbus, Ohio main library a few months ago. He presented a fascinating discussion to an overflow crowd that included much more than poverty numbers in America; he presented statistics that showed how and why our social and economic system allows this extreme poverty to happen, more than in any industrialized country, and despite our country’s great wealth. Desmond agrees that we need to expand not contract our social safety net, and our government could do much more to reign in worker exploitation and policies that allow predatory lending, for example, while increasing the minimum wage and empowering unions.

But he also describes scenarios where the upper middle class and the rich could start to actually think how they, as individuals and families, contribute to the scourge of poverty. The video below is a great, hour and a half discussion with Desmond and the Urban Institute, but in the first 11 minutes, Desmond describes everyday actions we can take, that may be quite uncomfortable, but are necessary if we want to shift the discussion about poverty in our communities and our larger society. In fact, it’s practically a requirement for those who have more than they need to stand up for those who don’t even have the bare necessities. Unfortunately, it is easy to forget that nearly 38 million people in the United States live at or below the federal poverty level.

In an article for Time published in 2023, Mark R. Rank, the Herbert S. Hadley professor of social welfare at Washington University in St. Louis, makes the case that America looks at poverty “all wrong”, saying we view poverty through the myths we’ve been taught about the poor, and in a larger sense, the American Dream—that we are all capable of “pulling ourselves up by our bootstraps” and supporting ourselves. And if you haven’t been able to achieve that status, you have made poor life choices—you are the “other”, far removed from mainstream American society. To the contrary, Rank points out the following facts:

… between the ages of 20 and 75, 75 % of all Americans will spend at least one year in or near poverty? Or that only 10% of the poor live in high poverty neighborhoods? Or that, according the U.S. Census Bureau, two thirds of the poor classify themselves as White? Or that most individuals in poverty remain poor for only one or two years?

Rank also discusses, as does Mathew Desmond, that the myths surrounding the poor are rooted in racism; people continue to believe, contrary to fact, that the majority of those receiving “welfare” are Black or other minorities. The 38 million people in this country who live below the federal poverty line are just too lazy to work hard enough to support themselves and their families—never mind the $7.25 federal minimum wage, the trampling of unions, soaring prices for goods and services, unaffordable housing and the myriad other systemic factors that work against the poor.

There is another force poised to hit low income Americans even harder than myths and perceptions about poverty, and it will strike an even larger portion of the American population. It will not be only those who are poor and disabled who are upended, but the elderly and every segment of what is left of the middle class.

In the fall of 2024, the National Association of Social Workers published its analysis of Project 2025, a 900 page document written by the Heritage Foundation outlining its right wing agenda to consolidate power in the president and cabinet and at the same time, dismantle federal government agencies. This analysis of Project 2025 and its devastating impact on the poor, middle class, women and minorities turned out to be 100% correct:

Once the fine print was made clear, many Americans began to realize that the plan poses a threat to return Americans, especially those from communities of color and the low to moderate income population, to the late 19th/mid-20th century, a time of robber barons, Jim Crow laws, and a lack of a social safety net…

As promised, Elon Musk, President Trump’s “special employee” in charge of the surreal, “Department of Government Efficiency” is taking a literal chainsaw to federal agencies and social safety net programs, including Social Security. Photo Credit: AP File

The politics and policy choices of those we chose to elect have become even clearer now, but they were right in front of us when we voted, and certainly discussed and explained before the election.

True individual freedom cannot exist without economic security and independence. People who are hungry and out of a job are the stuff of which dictatorships are made. President Franklin Delano Roosevelt, 1944. (Thanks to Robert Reich for posting this prescient warning on March 20, 2025)

______________________________________________

What was your first reaction when it became clear that our government chooses to subsidize the rich more than the poor? When it became clear that our social safety net, including social security, is on the chopping block? Please leave your thoughts and ideas in the Comment Section below.

This post goes out to both free and paid subscribers, but if you are not already a paid subscriber and value this effort and our growing community, please consider upgrading to a paid membership. Thank you! And a hearty “thank you” to my latest free and paid subscribers—I appreciate your support!

The Poverty Trap is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.