AOC’s Baseless Accusation That the U.S. Is a “Brutal, Barbarian Society”
By James D. Agresti
April 16, 2020
According to democratic socialist Alexandria Ocasio-Cortez, the Covid-19 pandemic is proving that the United States “is a brutal, barbarian society for the vast majority of working-class Americans.” As evidence of this, she claims that “40% of us couldn’t even afford a $400 emergency” before this crisis, and Covid-19 “is more than a $400 emergency.”
However, her “40%–$400” statistic is false, and the facts that broadly inform this issue reveal that:
- government social programs, which AOC seeks to enlarge, depress workers’ savings, causing the very outcomes that she decries.
- the people of the U.S. lead the world in charity.
- middle- and low-income Americans are more financially capable of handling Covid-19 than the bulk of people in most developed countries, including those who live in more socialistic nations that AOC says the U.S. should emulate.
In a recent video, Congresswoman Alexandria Ocasio-Cortez (D–NY) declared: “This is supposed to be the richest society in the world, and I think what this crisis is showing us is that this is only a rich society for a very small amount of people, and it is a brutal, barbarian society for the vast majority of working-class Americans because 40% of us couldn’t even afford a $400 emergency before this thing started. This is more than a $400 emergency, and we’re really going to have to step up and completely change our approach to our public systems.”
The “40%–$400” Statistic
The statistic cited by AOC stems from an annual Federal Reserve study of people’s “self-reported ability to handle unexpected expenses.” Contrary to her claim that “40% of us couldn’t even afford a $400 emergency,” the survey actually finds that 12% of U.S. residents fall into that category. Furthermore, the facts surrounding this 12% figure reveal that it overstates the portion of people who can’t afford such an expense.
Per the Federal Reserve’s report on this issue, “if faced with an unexpected expense of $400”:
- 61% “of adults say they would cover it with cash, savings, or a credit card paid off at the next statement.”
- 27% say they “would borrow or sell something to pay for the expense.”
- 12% say “would not be able to cover the expense at all.”
Hence, AOC’s figure of “40%” includes people who would place the expense on a credit card and not pay it off right away. This is materially different from her claim that they “couldn’t even afford” it.
Moreover, the same report notes that another survey found 76% “of households had $400 in liquid assets (even after taking monthly expenses into account).” In other words, it’s not that they “couldn’t” immediately pay for an unexpected $400 expense; they just preferred not to do so. Given that 40% of U.S. residents carry a credit card balance “most or all of the time,” the “$40%–$400” statistic says little beyond that.
With regard to the 12% who claim they “would not be able to cover the expense at all,” consumer data shows that the lowest-spending 10% of U.S. households spend an average of $1,369 per year on entertainment and $208 per year on alcohol. That’s enough to handle about four $400 emergencies every year. Furthermore, these figures are based on household surveys, and the U.S. Bureau of Economic Analysis explains that they “are subject to deliberate underreporting of certain items.”
The fourth-lowest 10% of households—who are also included in AOC’s 40% figure—spend an average of $2,830 per year on entertainment and $320 on alcohol. This is enough to cover about eight $400 emergencies, which means the issue is not about a lack of money but how it is spent.
In spite of these facts, media outlets have published headlines like these:
- “The Shocking Number of Americans Who Can’t Cover a $400 Expense”
– Washington Post
- “Nearly 40% of Americans Can’t Cover a Surprise $400 Expense”
- “40% of Americans Don’t Have $400 in the Bank for Emergency Expenses”
– ABC News
- “Nearly 40% of Americans Can’t Cover a Surprise $400 Expense”
– CBS News
- “40% of Americans Can’t Cover a $400 Emergency Expense”
Also, the survey includes all “noninstitutionalized, civilian” adults who live in the U.S., not just “working-class Americans” as AOC asserts. Thus, it also includes non-working Americans and millions of unauthorized immigrants who are not legally allowed to earn income in the United States. Since these individuals often work off the books and don’t disclose the money, this potentially skews the results of such surveys.
Government Social Programs
Also belying AOC’s rhetoric about the inability of Americans to weather a Covid-19 crisis is the fact that taxpayers already pay for most of the living expenses of low-income households, including the vast bulk of their medical costs. Roughly 22% of the U.S. population is on Medicaid, and as the U.S. Centers for Medicare and Medicaid Services explains:
Beneficiary cost sharing, such as deductibles or co-payments, and beneficiary premiums are very limited in Medicaid and do not represent a significant share of the total cost of health care goods and services for Medicaid enrollees.
Beyond medical care, federal, state, and local governments provide a wide range of other benefits to low-income households. In 2015, the U.S. Government Accountability Office identified 82 federal means-tested welfare programs. When all of these benefits and other sources of income are included, U.S. households that are officially “in poverty” consume an average of more than $50,000 per year in goods and services. This amounts to 5.2 times the income they report to the Census Bureau.
Governments also shift the costs of some welfare policies to the private sector. A prime example is the federal law that requires most hospitals with emergency departments to provide an “examination” and “stabilizing treatment” for anyone who comes to such a facility and requests care for an emergency medical condition or childbirth—regardless of their ability to pay and immigration status.
In 2018, federal, state, and local governments provided an average of $23,050 in social benefits to every household in the United States. The federal government defines these as “payments from social insurance funds, such as social security and Medicare, and payments providing other income support, such as Medicaid and food stamp benefits.” These alone are on par with the total average household income of Eastern Europe, including both private earnings and government benefits.
In addition, the federal government has recently enacted enough Covid-19-related legislation to nearly double its regular $2.6 trillion annual spending on social benefits. This includes but is not limited to $192 billion for the Families First Coronavirus Response Act and an estimated $2.2 trillion for the Coronavirus Aid, Relief, and Economic Security Act.
Impact on Personal Savings
Such levels of government social spending, which AOC wants to increase, are the main reason why many workers don’t save more of their income. As detailed in 2016 working paper published by the European Central Bank:
- “As the state organizes and offers more public insurance, there is less need for relatively poor households to hold precautionary savings, and more income might be used for consumption purposes.”
- “social services provided by the state are substitutes for private wealth accumulation.”
- “an increase in welfare state spending goes along with an increase—rather than a decrease—of observed wealth inequality.”
Furthermore, Americans must ultimately fund these programs, which hinders their ability to save. The $23,050 per household in social benefits that governments paid out in 2018 ultimately came from American households. Although high-income households bear a greater share of these costs than others, middle-income workers lose about 15.3% of their paychecks to social insurance taxes.
If, in contrast, these workers could have saved and invested a fifth of these taxes during their careers, each retired middle-income worker would have an additional $199,000 to $764,000 in savings today.
Long before governments began providing appreciable amounts of social benefits, the U.S. led the world in charity, and it continues to do so.
In notes that Thomas Jefferson wrote in the 1780s, he described how Americans cared for the sick and poor with striking contrast to modern, government-run welfare programs:
- Churches collected money and appointed modest, quiet people to deliver these resources and personally look after each person in need.
- For the poor who had “neither property, friends, nor strength to labour,” farmers took them in, and churches paid these caretakers an annual sum to do this.
- For the poor who were “able to help themselves a little,” churches supplemented their income so they could “live comfortably in their own houses, or in the houses of their friends.”
- “Vagabonds without visible property or vocation, are placed in work houses, where they are well clothed, fed, lodged, and made to labor. Nearly the same method of providing for the poor prevails through all our states; and from Savannah [Georgia] to Portsmouth [New Hampshire] you will seldom meet a beggar.”
- Sick people were “visited by all the neighbors,” who brought them food and took turns watching over them at night. Regarding this charity, Jefferson wrote:
- It “is without comparison better than in a general hospital, where the sick, the dying and the dead, are crammed together, in the same rooms, and often in the same beds.”
- Being in a home and under the care of a local community has advantages that outweigh the “regularities of medicine and regimen” in a hospital.
- “Nature and kind nursing save a much greater proportion in our plain way, at a smaller expense, and with less abuse.”
In the 1830s, a French historian and political scientist named Alexis de Tocqueville visited the U.S. and wrote a famous work entitled Democracy in America. In it, he stated that what “I most admire in America” is how people were personally engaged in advancing the welfare of society:
In the United States the interests of the country are everywhere kept in view; they are an object of solicitude [concern] to the people of the whole Union, and every citizen is as warmly attached to them as if they were his own.
When a private individual meditates an undertaking, however directly connected it may be with the welfare of society, he never thinks of soliciting the cooperation of the Government; but he publishes his plan, offers to execute it himself, courts the assistance of other individuals, and struggles manfully against all obstacles. Undoubtedly he is often less successful than the State might have been in his position; but in the end, the sum of these private undertakings far exceeds all that the Government could have done.
Although federal, state, and local governments consume about 33.5% of the U.S. economy—at an average cost of $54,000 per year to every household in the nation—U.S. citizens still donate about $50 billion each year to charities that provide “direct services to people in need.” That equals an average of $1,316 for every person who is reportedly below the poverty line.
U.S. citizens also donate $38 billion per year to health charities, along with $59 billion to education charities, and $127 billion to religious groups, many of which serve the poor.
A 2016 study of 24 nations by the Charities Aid Foundation found that the people of the United States are most generous and donate 1.44% of the nation’s gross domestic product to charities. The next closest nation, New Zealand, donates 0.79%, or 45% less than the USA. Nations such as Finland (0.13%) and France (0.11%) donate less than one-tenth of the USA.
The Big Picture
The most comprehensive mass measure of people’s financial condition is their consumption of goods and services. This is the World Bank’s “preferred” indicator of material well-being due to “practical reasons of reliability and because consumption is thought to better capture long-run welfare levels than current income.”
The latest available data show that middle-income Americans and even the poorest 20% of Americans consume more goods and services than the national averages for all people in most affluent countries. This includes the majority of nations in the prestigious Organization for Economic Cooperation and Development, including more socialistic nations that AOC says the U.S. should emulate:
An important strength of this data is that it is adjusted for purchasing power to measure tangible realities like square feet of living area, foods, smartphones, etc. This removes the confounding effects of factors like inflation and exchange rates. Thus, an apple in one nation is counted the same as an apple in another.
Contrary to AOC’s portrayal of the USA as “a brutal, barbarian society for the vast majority of working-class Americans,” the key facts that inform this matter show that:
- the lone statistic she used to support this allegation is false.
- personal savings—the subject of her statistic—are depressed by government social programs that she champions and seeks to expand.
- when it comes to charity, the people of the U.S. are the most generous in the world.
- middle- and even low-income Americans have more material resources to weather Covid-19 than the majority of people in most developed nations.
Doesn’t AOC have a point? For example, the fact that you can loose health insurance because you loose your job is considered brutal and barbarian by any European I know.
How many Europeans do you know? Losing health insurance is not equivalent to losing health care. Did you not read the section above about Medicaid? The poor in this country receive better health care than the poor in Europe.
As the caregiver to an 84 year old mom with Parkinson’s disease, I was surprised at what we do and do not provide for our citizens. Through the course of her illness mom has never received the physical therapy required to keep the disease at bay. Coverage through Medicare is limited. Home care, respite care, forget about it. She needs 24/7 attention that I provide. I can’t work and don’t tell me to put her in a nursing home. Not one healthcare provider has ever encourage that option. They have assured me that a facility that accepts Medicare would ignore my mother for six months until she passed. Most benefits are tied to the estate, which means the home my mom worked all her life for is sold to pay for her final care. The wealth, if you want to call it that, is not passed on to her children. You can chose to say weather you feel that is fair or unfair. I can state from my experience that I have never met one caregiver who thought this was ideal. When the human equation is not figured into facts, statistics and policy we lose some of our soul. I fully expect ridicule and disparaging remarks for my opinion because that’s par for the course these days. Everything becomes political. One thing I can state that will not be challenged, I love and am devoted to my mother. She is the daughter of cotton mill workers who never received any employment benefits, were never able to unionize. Their jobs went outside the U.S. My mom retired from retail and had to return to work as a stock worker/ greeter at a big box store to make ends meet. She had quit after a few years to become the caregiver for my grandmother. During that time she was diagnosed with Parkinson’s. And so the cycle continues. Perhaps if people could see the numbers through the lens of families, weigh the cost in quality of life, maybe a more thoughtful discourse would be possible.
I’m sorry for you and your family’s misfortunes. Your mother’s individual story does not change the facts for the majority of Americans though.
There seems to be an assumption in this country that any individual’s experience is indicative of everyone’s or indicates a need to revamp systems that seem to be working for the majority; that just ain’t so. No system is anything close to perfect, but, if it works pretty well for most, it’s pretty damn good.
Your service to your mother is commendable and deserves praise. Anyone who denies that obvious fact deserves to be ignored.
Now to the analysis.
The fact that medicare provides poor coverage for your mother only supports the underlying assertion that AOC is wrong. After all, her solution to American healthcare is “medicare for all.”
Once again, I commend you for taking care of your mother. I am surprised that no healthcare professional has recommended that you allow your mother to go to a nursing home. There are many skilled nursing facilities that can handle a patient with Parkinson’s disease. Every nursing facility that I have been in (many) has in-house physical therapists that work with the residents. This could greatly enhance your mother’s quality of life. You are right that nursing facilities are not a perfect solution. The only perfect solution would be a cure for Parkinson’s disease. Unfortunately, no amount of socialized medicine could offer you this.
It is a serious mistake fight against the syngle health care : What is Meant by What is Meant by ‘Single-Payer’ in the Current Discussion of Health Care Reforms During the Primaries? https://pnhp.org/news/what-is-meant-by-single-payer-in-the-current-discussion-of-health-care-reforms-during-the-primaries/ vía @PNHP
I am a Spanish pro-life but I do not understand the fear at syngle system healthcare. I do not think that capitalism or conservadurism and right to life are synonim; please read this : In the developed world there are basically three ways to finance and provide medical services to the population at the state level. One, which is known as the National Health Service, where most of the funding is public and the provision of services is also public. The second model is the National Health Insurance, where financing is public (through a public insurance system) and the provision of services is private. And finally, the third system is that which is privately financed (which is predominantly carried out through private insurance, with private insurance companies managing the health system), and in which the provision of services is also private. In this model, unlike the previous two, the accumulation of private business benefits plays a decisive role in the configuration of the health system.
This model is the one that exists in the US, and it is clearly the most expensive system (the US is the country that spends the most on healthcare in the world, 17% of GDP), the most unpopular (64% is dissatisfied with the way the health system is financed and organized), more inefficient (40% of hysterectomies, 48% of cardiac catheterization and bypass operations, 28% of angiographies, 40% of angioplasties and 12% of interventions cataracts are unnecessary) and more inhuman (32% of people who are dying, that is, they have terminal illnesses, indicate they are worried about how they or their relatives will pay the medical bills). http://www.vnavarro.org/?p=…
I’d be pleased to contribute to a one-way ticket for her to emigrate to the kind, gentle society of her choice.
My experience in working with people shows me that a person’s personal belief system is far stronger than actual/ verifiable facts. They will always find some information to claim support for their belief despite information and facts contrary to their beliefs. The first thing I want to know when considering someones statements and claims is what is their core beliefs.
Perhaps AOC should use her economics degree and correlate the rise of taxes & government year over year with the standard living in the US with a particulate emphasis on disposable income that would be available to deal with unexpected events.
Nahhhhh … that would produce blame too close to home ….
Yo AOC, resolution to said: move your sorry, NON-productive/parasitic ass to a country of your satisfaction.
Only in America would someone as shallow, uninformed and minimally qualified as AOC be covered incessantly by the news media. PLEASE let her 15 minutes be up.
Is there anything more Brutal than the Wanton Murder of PreBorn Human Beings up to and Including Full Term Birth!!! That’s Barbarism supported and ADVOCATED by The Democrat Party of Death 💀 and Degradation!
AOC is a product of the useful idiot factories that some people still call colleges
I resent barbarian shaming. How insensitive!