Welcome back to the deep dive. So you've probably
encountered this strange paradox in the economy,
right? Oh, definitely. You see the official data.
You see healthy GDP, low unemployment. But for
so many people, stability just feels well. completely
out of reach. It feels like the goalposts have
moved. And that's exactly what we're digging
into with the sources you've brought today. We're
going to interrogate those foundational numbers,
the policies that create that exact feeling.
We'll start with the economics and then you'll
see how that bleeds directly into, well, political
physics and even the way we project power globally.
The core question is always... Where are the
broken parameters? Okay, let's unpack that distortion
then because it starts with this one Just massive
claim right the official poverty line for a family
of four in the u .s. Is about thirty one thousand
dollars thirty one thousand two hundred Yeah
But the analysis we're looking at suggests that
if you calculate the real cost of living the
actual crisis point for a family is closer to
a hundred and forty thousand It's a staggering
difference, isn't it? Unbelievable. And it totally
reframes how you see the American economy. I
mean, if almost half the country is living in
what you could call economic deprivation, then
all the political fragility, all the anger, it
starts to make a lot more sense. It all connects.
We have to follow this invisible infrastructure
that's defining our reality. So let's start with
the origin story of that flawed number. We have
to go back to 1963. Right. To an economist named
Molly Orshansky. And her formula? for the time
was actually pretty simple and elegant. She said
the poverty line is just three times the cost
of a minimum food diet. And we have to be really
clear about her intent. She was a rigorous economist.
She wasn't trying to define what's a good middle
class life. She was measuring income inadequacy.
She was drawing a line in the sand. A crisis
floor. The bare minimum. The absolute minimum
to avoid total destitution. And that three times
multiplier only worked in 1963 because the rest
of the family The family's budget wasn't so constrained.
Housing was relatively cheap. It was a way to
build wealth. Health care may be a blue cross
plan. Ten dollars a month. Which is what? About
a hundred bucks today adjusted for inflation.
A tiny fraction of what it is now. And child
care was mostly non -market. Family helped or
mothers stayed home. You could even pay for college
with a summer job. And today that entire structure
has, I mean, it's completely inverted. Right.
If you look at twenty twenty four, housing costs
have just exploded. Health care is this massive
mandatory expense and child care. The sources
call it. ruinously expensive. And that inversion
is the whole story. What families spend money
on has totally transformed. Food you eat at home,
it's not a third of your budget anymore. Not
even close. It's more like five to seven percent.
So if you stick to Orshansky's original principle
that the multiplier should be the inverse of
what you spend on food, then That number three
is totally obsolete. It's not three anymore.
It's 16. 16. And that's the whole mechanism.
That's how the measurement breaks. You apply
that new multiplier, and suddenly the income
inadequacy line for a family of four is, well,
it's somewhere between $130 ,000 and $150 ,000.
So the official number, that $31 ,000? It's not
measuring poverty anymore. It's measuring the
threshold for actual starvation in a modern economy.
That is just, it's astonishing. But let's ground
it. Does that $140 ,000 figure assume a big house
and luxury cars? Not at all. Not even a little
bit. The analysis actually breaks down a basic
needs budget. It's for a family of four, two
earners, two kids. And there are zero luxuries.
It's just what they call the participation ticket.
But you need just to hold a job. Exactly. To
hold a job, raise kids in 2024. And the gross
income they need for just that is $136 ,500.
And get this, the most shocking detail in that
budget. It's not the housing. No. Housing is
about $23 ,000 a year in their model. The biggest
line item is child care. $32 ,773. It costs more
than the roof over your head. And this creates
what the analysis calls the child care trap.
It's fundamental. How does that work? Well, to
get to the median household income, about $80
,000, you almost always need two adults working.
Sure. But the moment that second person goes
to work, you trigger that $32 ,000 child care
bill. So the second income isn't for saving.
It's not for getting ahead. It's just to pay
a stranger to watch your kids so you can go to
work. It's a closed loop. A completely closed
loop. Your net gain at the end of the month might
only be $1 ,000 or $2 ,000. And we should remember
that $136 ,000 number is conservative. Very conservative.
It's using a national average for rent of like...
$1 ,900 a month if you live anywhere near a major
city. I mean, the example they give is Caldwell,
New Jersey. Right, a decent town, but not Manhattan.
And a two -bedroom there is over $2 ,700 a month.
And your required income immediately jumps past
$160 ,000. And that rent check buys you zero
equity. That is a critical change from the 50s.
For the working poor, Housing today is just an
expense. It's a subscription for a roof. It's
not building any wealth. Now, when you present
this data, you always get pushback from economists
about hedonic adjustments. Yes, the quality argument.
They say, sure, prices are higher, but your phone
is better. Your TV is better. Why is that defense
so flawed here? Because it's a category error.
I mean, it's a total distraction. We're not talking
about the price of a luxury TV. Right. We are
calculating the price of participation. Yeah.
What does it cost just to show up in the modern
economy? Okay, so let's run the participation
audit. In 1955, your connectivity cost was a
landline. Five bucks a month. About $58 in today's
money. Today, you need a smartphone, you need
broadband for work, for school, for your bank.
And that's about $200 a month. The cost of just
being connected has tripled, even after you adjust
for inflation. And health care is the most violent
comparison. That $10 a month premium in 1955,
that's $115 today. The average family premium
now, over $1 ,600 a month. That's 14 times inflation.
14 times. And childcare, of course, went from
basically zero in a single earner economy to
$32 ,000. It's an infinite increase in a mandatory
cost. And this whole cost structure is what creates
the valley of death in the safety net. Right.
It's a trap. The system punishes you for trying
to climb. How so? The cliffs are just undeniable.
A family might lose Medicaid when their income
hits, say, $45 ,000. So a $10 ,000 raise. A $10
,000 raise, which should be amazing, suddenly
means you have a massive new health care bill.
You're actually poorer. And the same thing happens
with child care subsidies around $65 ,000. A
$20 ,000 pay bump can trigger a $28 ,000 loss
in benefits. So the effective tax on trying to
get ahead is insane. maybe a hundred percent.
Which means a family making a hundred grand can
easily be worse off financially than one making
forty thousand. You are penalized for striving.
And falling below that 140 line is what the analysis
calls a phase change. You become economically
inert. Exactly. You're barred from good credit.
You can't get into a decent rental. You have
no buffer. That $140 ,000 line is an affluence.
It's the buffer against total ruin. So when we
see those charts, You know the ones showing the
middle class drinking, but the number of families
making over 150 is growing. Yeah, the ones that
used to show rising prosperity. We have to completely
reinterpret that now. Absolutely. If you apply
this $140 ,000 survival line, that chart doesn't
show prosperity. It shows that only about a third
of Americans have managed to escape deprivation.
So the so -called middle class? That huge group,
45 % of the country, making between 50 and 150.
They're actually the working poor, trapped in
that valley of death. They make too much for
help, but not nearly enough to live. And it explains
why the poverty rate is low. Food is cheap. Food
is cheap. Life is expensive. Because housing,
health care, and child care are broken. In this
feeling, this economic stress where working harder
makes you poorer, it translates directly into
political instability. It has to. Which brings
us to the raw numbers of power in Washington.
The sources really highlight just how fragile
the whole political environment is, especially
in the House. Yeah. After the recent death of
Representative Doug LaMalfa from California and
Marjorie Taylor Greene's exit before that, the
Republican majority is, well, it's on a knife's
edge. The tally right now is 218 Republicans
to 213 Democrats. A five -seat margin. And as
Professor Kostas Panagopoulos points out in the
analysis, that is an incredibly difficult margin
to govern with. Even a handful of people defecting
can kill any piece of legislation. And it's probably
going to get even tighter. Almost certainly.
There are two upcoming special elections that
Democrats are heavily favored to win. Texas is
18th and New Jersey is 11th. Right. The New Jersey
one is considered safe Democrat. So if they win
both, and they're expected to... Let's do the
math. The majority shrinks to 218 to 215. Which
means Speaker Mike Johnson could only afford
a single defection on any vote. One person defects
or is just absent and he can't pass a thing.
That is unbelievable fragility. It empowers the
fringes. The analysis warns that basically anyone
can now derail the entire agenda. When your margin
is that thin, a few members who refuse to compromise,
often fueled by that same economic resentment,
they get a veto over the will of the majority.
So the political system is just reflecting the
economic instability. Every absence, every illness,
like with Representative Jim Baird, it's suddenly
a major political crisis. It is. The whole branch
of government is hanging by a single thread.
And when the legislature is that paralyzed, the
executive branch often feels like it has to act
more aggressively. And that brings us to our
final piece. The shift toward aggressive executive
power. We're talking about Greenland. Yes, a
remarkably aggressive stance. Secretary of State
Marco Rubio told lawmakers the goal is to buy
the island from Denmark. But the administration
hasn't ruled out just. taking it. Right. They've
publicly refused to rule out seizing it by force.
The White House press secretary said acquiring
Greenland is a national security priority for
the Arctic. The blowback must be immense. Denmark
is a NATO ally. It's profound. Attacking a Danish
territory is an attack on NATO. Other members
have basically said that if the US did that,
it would be the end of NATO. The end of the alliance.
The Danish prime minister's words were Everything
would come to an end. And this kind of aggressive
foreign policy seems to trace back to one person.
A central figure, yes. Stephen Miller, the deputy
chief of staff for policy. He is described as
the accelerant for the president's most incendiary
ideas. The prime minister, really. And his style
is... Pretty intense. He runs his meetings like
a wartime general, accepts no dissent, he's pushed
for things like 3 ,000 immigration arrests a
day, which is a ten -fold increase, and he's
leading the charge against elite universities.
It's the philosophy behind it that's key. You
have to understand his worldview. He doesn't
see disagreement as politics. He sees it as an
existential conflict. against forces of wickedness
and evil. So he's fundamentally against the whole
post -World War II order. Exactly. He wants to
end the international niceties and live in a
world governed by strength, that is governed
by force, that is governed by power. And that
explains Greenland. It's a pure power play. A
pure power play. And it's consistent. He was
a key force behind the operation to capture President
Maduro in Venezuela, and he declared the U .S.
military could take Greenland without a fight.
And his goal seems to go beyond just policy wins.
Oh, yeah. The analysis from former Senator Jeff
Flake is that Miller's goal is to change the
nature of who we are as a country. to reverse
the immigration trends since the 1960s. And he's
willing to use the power of the state to do it.
That's the defining trait. It's not just against
immigrants under some banner of national emergency.
It's also against domestic opponents. Right.
The sources detail his efforts to get federal
law enforcement to investigate a local activist
who he claimed was threatening his family. It
shows a willingness to use what he calls legitimate
state power against any perceived threat. foreign,
or domestic. So we have these three systems,
economic, political, and foreign policy, all
stretched to their absolute limit. That's the
perfect way to put it. We've looked at this foundational
economic number that traps millions below this
$140 ,000 survival line. Then we saw the political
fragility that results from that, with a House
majority hanging on by a single vote. And finally,
this aggressive, power -first foreign policy
that's threatening to just dismantle core alliances
like NATO. In every single case, a basic parameter
is being stretched to its breaking point. The
poverty multiplier, the majority threshold, the
definition of an ally's sovereignty. We are defining
crisis incorrectly, managing power precariously
and projecting force dangerously. Which leaves
one last big question for you to think about.
Right. If all the anger and volatility you see
out there, the rage the person earning 65 grand
feels at the system, at their neighbors, at their
leaders, if that is all fundamentally a result
of a broken economic contract, where working
hard doesn't get you past that $140 ,000 line.
Then what do you fix first? What has to be fixed
first for stability to return? Do you have to
fix the economic math before the political rage
can ever calm down? A very challenging thought
to end on. Thank you for sharing your sources
with us for this deep dive. We hope you feel
a little more informed about the hidden numbers
that are shaping our world.