Beating down the poor to benefit the economy

Do you believe that the poor are born lazy, stay lazy, and are devoid of the desire to lift themselves out of poverty?County struggling to find workers for hurricane shelters - South Florida  Sun Sentinel - South Florida Sun-Sentinel

Do you believe that success has nothing to do with luck and opportunity, but rather is a function of innate character, which the poor lack?

Do you believe that benefits to the poor dissuade the poor from working and serving the rich?

Do you find yourself agreeing with comments such as, “Don’t increase unemployment benefits; the people never will go back to work.” “Stop welfare payments; they keep people lazing at home.”

Do you believe the poor must be whipped, like reluctant beasts of burden, so that “someone” will pick up the garbage or dig the ditches?

If these are your beliefs, be aware that your notion is a function of:

Gap Psychology describes the common desire to distance oneself from those below, on any social scale, and to come nearer to those above. 

Among the prime victims of Gap Psychology are the homeless, who widely are thought to deserve their plight, or worse yet, actually wish to be homeless.

The above beliefs provide the “have-mores” with ready excuses for not assisting the “have-lesses.”

Whether or not these are your beliefs, you may find the excerpts from the following article fascinating:

Surprising silver lining
In fight against homelessness, hotel settings could be a game-changing model, By Charles J. Johnson, Chicago Tribune

When COVID-19 halted the world a little more than a year ago, one group of people appeared to be particularly vulnerable to this new, little-understood coronavirus: the homeless.

Often suffering from poor health and packed head-to-foot in shelters — known as congregate housing — homeless individuals were one of several groups of people who, it was feared, would be decimated by the spread of COVID-19.

While those experiencing homelessness did suffer COVID’s aggressive spread initially, a silver lining has emerged out of the deadly pandemic.

Hotels, abandoned by business travelers and tourists, were used to house people who would otherwise be sleeping in congregate shelters or on pads arranged on the floor of a church basement.

If we provide the homeless with hotel rooms, do you believe they never will go to work?

Social service agencies, doctors and those who stayed in the hotels are now calling it a game-changing model for how to stabilize people experiencing homelessness and get them into permanent housing and off the street for good.

Equipped with a flood of private donations, CARES Act funds and FEMA dollars, local nonprofits and governments — including Chicago and Cook County — were able to house more than a thousand people in these hotel settings.

Private donations should not be necessary.

The federal government, having unlimited funds, should provide state and local organizations with sufficient money to pursue this partial solution to poverty.

Not only is federal support not constrained by money support, but the support stimulates the entire economy.

Nia Tavoularis of Connections for the Homeless in Evanston, a social service
agency, calls the practice of hotel sheltering “revolutionary … an absolutely new frontier.”

Now, agencies and municipalities in Chicago and across the country are looking to acquire hotels, some on the verge of bankruptcy after more than a year with few paying guests, or buildings that could be converted to “hotel-style” shelters.

A battle has erupted in Texas over a plan to convert a former hotel into permanent supportive housing. Oregon is looking to spend as much as $65 million to buy 20 underused hotels, enough for roughly 2,000 people. In California, the practice has been hailed as a success in a state that constantly battles homelessness in its major cities.

While it might seem obvious that it’s preferable to sleep in comfy sheets with cable TV than on a pad, it’s not the creature comforts experts say are revolutionary.

Before we resume sneering at the poor as useless, lazy takers, only too willing to live off the public, let’s examine reality.

The vast majority of the homeless do not wish to be homeless, and it is not character flaws that have made them homeless. Fate and circumstance have dealt them blows from which they do not know how to recover.

Becoming homeless is like falling into a deep hole, from which even the most strenuous effort cannot extricate you:

Those in shelters often face a series of intersecting hurdles before they can find stable employment and housing or access government services:

Some shelters will take only men or women, meaning homeless families are sometimes unable to be housed together. A daughter caring for her elderly father or a mother caring for male teens might be separated.

Many shelters close during the day, requiring residents to leave during typical office hours. Try navigating the secretary of state or Cook County court system with a social worker at 9 p.m.

Doctors and nurses aren’t easily able to treat patients, who often suffer from diabetes, hypertension, substance abuse disorder and mental health conditions.

Patients and providers aren’t able to return to the same shelter night after night and an expensive cycle of emergency room visit-shelter-ER is common.

Permanent housing opportunities dry up if caseworkers can’t quickly reach their clients, extending one’s stay on the streets or forcing them into housing that might not be close to work and family support or isn’t handicap accessible.

Many of the homeless have the potential to benefit society, but society puts obstacles in their way. Just one of many examples:

Qwandra Drummer was trying to study for the Illinois bar exam in February 2020 when a worker at a shelter yanked her laptop’s power cord out of the wall. Drummer wasn’t allowed to use the facility’s electricity to charge computer devices.

“I was begging, crying,” Drummer said. “I said ‘can you not understand what I’m trying to do’?

She said, ‘I don’t care what you’re studying for, you cannot use our electricity.’

Drummer, raising six children, graduated with a degree in engineering. She grew up around the now-demolished Robert Taylor homes and Wentworth Gardens on Chicago’s South Side.

She jokes about failing the “foreseeability test” she learned about in law school.

As COVID-19 began to creep into Chicago, she grew scared for her family and bought a tent, a radio and other camping supplies, fearing they would have to live outside. 

Instead, Drummer was placed at the Hilton Garden Inn and the Orrington Hotel in Evanston, where her kids were able to e-learn in a space with two bathrooms, two bedrooms and a living room.

Meals from local restaurants were delivered “with a smile” three times a day, and Connections staff brought clothes, toiletries and games for the kids. One of Drummer’s children is autistic and blankets help. They found an extra thick one for her.

The kids weren’t the only ones studying and taking tests online. Drummer had plenty of electricity for bar exam prep. She passed and was admitted in January.

The example is instructive of the superiority of the hotel system, advocates say. A family was able to stay together. Service providers were able to quickly and diligently meet individual health needs.

And the dignity of a warm bed and some privacy put a bounce in the family matriarch, who gained a major credential she can now use in her job hunt.Porter Ranch Families Living Out Of Hotel Rooms Adjust To 'New Normal' –  CBS Los Angeles

After a stay from April to August, Drummer and family moved into market-rate housing.

Let us not forget that many of the homeless are children, doomed to lives of failure through no fault of their own.

These children have been denied the possibility of becoming productive Americans, who would benefit the nation. How many? We never will know. 

Clearly though, they were not born to fail. They were thrust into a failure box, and once there, we the “haves” helped put a lid on their box making escape unlikely.

The Strange Benefits of the Pandemic

Despite its horrors, the pandemic was not all bad. It had a few, unforeseen benefits.

The pandemic helped us rid ourselves of the worst President in American history, a man who tried to end American democracy, and to become a dictator. 

The pandemic dramatically reduced the world’s air and water pollution by forcing us, and teaching us, to work at home. Though many will return to the old, energy-consuming, tie-cosuming “travel-miles-to-and-from-work,” many will not.

The “hotel revolution” would not have been possible without the pandemic. The rooms would not have been so available, nor would the public funds to pay for them, and hoteliers wouldn’t have had the financial incentive to take in those experiencing homelessness.

In Chicago, occupancy rates at hotels in February 2021 stood at 20%, down from nearly 60% at the same time last year as coronavirus was beginning to ramp up.

As hotels fill back up, the industry isn’t expecting a return to pre-pandemic profitability before 2024 — some propose acquiring hotels that closed, or that owners are looking to sell, and convert them into permanent shelters.

While the investment required to create the fixed-site facilities may cause sticker shock for some taxpayers, advocates point to studies that find the public costs of servicing homelessness — ER visits, police and EMS services — can be higher than simply paying for housing.

Yes, sticker shock for state and local government taxpayers. but if the federal government funds these efforts, no tax dollars would be used. Federal taxes do not fund federal spending.

The majority of the money for the hotels ultimately came from the federal government in the form of the CARES Act and reimbursements from FEMA.

President Joe Biden signed an executive order saying FEMA will continue to reimburse hotel stays for those at risk of COVID-19 because of homelessness through September, and has instructed the agency to reimburse hotel stays retroactively at 100%, up from the 75% the Trump administration ordered.

And now, if only Joe Biden would stop asking “Who will pay for it?” when referring to federal programs. The answer to the question is, “The federal government creates all the dollars needed, each time it pays a bill.

Biden never asked that question when the first trillions of stimulus dollars were spent, but now oddly, he has become a debt hawk, and for no good reason. 

“For suburban Cook County, we’ve been very fortunate that Cook County has some very good people in its planning department who’ve made it work so we can pay for the hotels.”

For all the anger over COVID lockdowns and elected officials violating their own public health advice, service providers generally spoke glowingly of the speed and effort the city and Cook County showed in working with them throughout the pandemic, especially in early days.

“The relationship with the county saved the day. It kept us alive emotionally, financially.”

We love to hate government workers. Trump referred to them as “the swamp.” 

But the vast majority are hard workers, sincerely trying to do a good job. The real swamp was composed of the miscreants hired by Trump and his gang.


The poor are not to be despised. They are people, young, old, smart, not so smart, but they are just people. They have children and dreams for those children. And the children too have dreams.

The homeless are a largely untapped resource, that if given the chance, can become an important asset for America.

The federal government has the unlimited ability to help pull the homeless out of poverty and into productivity.

We have only to believe it can be done, and to give these people the means and the opportunity to succeed.



Rodger Malcolm Mitchell 

[ Monetary Sovereignty, Twitter: @rodgermitchell, Search: #monetarysovereignty Facebook: Rodger Malcolm Mitchell ]


  • Monetary Sovereignty describes money creation and destruction.
  • Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics. Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps: Ten Steps To Prosperity:

  1. Eliminate FICA
  2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone
  3. Social Security for all
  4. Free education (including post-grad) for everyone
  5. Salary for attending school
  6. Eliminate federal taxes on business
  7. Increase the standard income tax deduction, annually.
  8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.
  9. Federal ownership of all banks
  10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 


The Ten Steps will grow the economy and narrow the income/wealth/power Gap between the rich and the rest. 


3 thoughts on “Beating down the poor to benefit the economy

  1. There was a good Zoom panel discussion (Let’s Talk it Over) last week that had Stephanie Kelton, Naomi Klein, Yanis Varoufakis, and Brian Eno who were discussing “The Austerity Doctrine in the Time of Coronavirus” (Link below, about 1 hour). In the video, Yanis Varoufakis made a very salient observation via a story with respect to austerity and gap psychology starting at about the 14:15 mark.

    He related a story from Karl Marx about a 19th century English capitalist that went to Western Australia with his family and workers to establish his own capitalist utopia only to find his workers abandoning him due to the wide availability of fertile land. Varoufakis made the assertion that the ‘nightmare of the powerful is that the weak have alternatives’. The powerful tend to understand that governments using their ‘money tree’ to spend on the poor could seriously circumscribe their power and render them like the English capitalist in Marx’s story. This is why they tend to deny monetary sovereignty/MMT and promote austerity and ‘fiscal responsibility’ whenever there is discussion about increasing benefits to the poor. Of course you never hear those objections when government spending is targeted on the rich.


    1. Good discussion. A bit repetitive, but I liked it perhaps because it agreed with me. 🙂

      But, I didn’t hear any discussion of the “dangers” of inflation. Did I just miss it? I always like to hear MMT talk about how “excessive” spending causes inflation (The word, “excessive” makes it a tautology.) They are wrong, of course, if rather than “excessive,” they simply mean “a lot.”

      As a reader of this blog you have seen that inflation is not caused by federal spending, but rather by shortages, usually of food or oil.


  2. I don’t think you missed it. They did not discuss inflation, probably because they all know it is a non-issue and they were speaking to a friendly like-minded audience. The “too much spending can cause inflation argument” is only brought up when they are directing their message to a more skeptical and orthodox (in the economic sense) audience, so as to disarm their criticisms. Also, your characterization of the argument as a tautology is a good one: Q: What causes inflation? MMT: Excessive spending. Q: So, how do we know when there is “excessive spending?” MMT: When it results in inflation. QED.


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