From Stem Cells to IVF Centers

Escaping the Poverty Trap - Revisited
by James Carvin 12/13/04

The Palm Beach County Housing Partnership is in downtown West Palm Beach a few blocks from where the Guatemalans drink their coffee Saturday mornings with the all night drunks in front of the Quick Stop on Broadway and 42nd. There, grants and assistance can be obtained for first time homebuyers who attend six hour workshops. Teaching the class was a saint named Manny Rodriguez, who volunteered there.

I've owned two homes before. What was I doing there? I was twenty years older than anyone else too, except for the guy with one leg who sat across from me, a disabled vet. We were all lectured about the importance of budgeting - how we can do without SUVs, plasma tv and extra cable channels, how we should keep receipts for everything for a month, even purchases of bubble gum. "You'd be surprised how the little things add up!"

Matching dollars with the Federal Government, Palm Beach County sets aside property taxes for several subsidized housing programs. The SHIP program is especially attractive, offering as much as $30,000 in grant money for downpayments on homes, even more if you buy in certain areas. We were all there for the free money you never have to pay back.

This was a great program when it was first designed. Several years ago the average cost of a home in this county was under $200,000. Now it is approaching $350,000. The $150,000 purchase limit imposed by SHIP means keeping the poor in the high crime areas where appreciation of homes has failed to happen. Without even more assistance the classes will remain separated. The gap will just widen.

Each participant in the workshop was handed a book titled "Realizing the American Dream." In the photos we all saw two story single family homes - not anything this program will actually deliver. I used to have a nice five bedroom home on a cul-de-sac with a living room, a two car garage, a huge kitchen, a giant back yard and trees everywhere. After our bankruptcy, the four of us moved into a two bedroom apartment with a tiny patio, where we stored anything that couldn't fit until it was ruined by humidity and rain.

It is the price of risk for which CEOs claim they deserve salaries in the millions and no one should have the right to tax it. That's not a bad point. I had always been taught, and still believe, that the only real escape from poverty comes from individual tenacity. But even for entrepreneurs, cash flow is essential. The way around it is partnership. If you don't have the money to get your business idea off the ground, your partner better have it. You might make it with tenacity alone if you have a cash endowed partner.

That person or institution, also needs to have enough of it. My business started with $100,000 of family savings. But I had counted on others to join in and they didn't. One thing I continue to pray for is a good partner for my future - one who knows how to put together a successful team. I've had hundreds of great ideas in my life. I see some of the technology I developed being used all over the Internet today. But I'm not reaping any of the benefit because I didn't have the right team. Don't go it alone. Pray hard to find not just any team, but the right team. Make no commitments without certainty.

Life isn't simple. Reaching goals requires working with moving targets. SHIP now needs to raise its limits and increase its help if it is to meet its objective. They are targeting the "working poor," which Florida has plenty of. Here, the average individual income is $20-30,000/year. In an inflationary environment debts pile up. Savings by the working class are rare albeit for the most austere. But SHIP has to work with banks on the remainder of the mortgage. With banks, debt to income ratios can't exceed 41%. Therefore, few qualify. Most remain in the trap. And it is growing deeper.

After 9/11, my wife, who was working in the tourism industry for $40,000/year, was laid off. This happened at a bad time because I still had my own hands tied up attempting to do the impossible with the remains of my failing business. We did odd jobs together for about two years to get the rent paid and then, as luck would have it, she suffered three massive strokes. She survived, but is now paralyzed in her left side and without the miracles we've been praying for, will never have the energy to work a full time job. No doubt, being otherwise healthy, it was due to stress. Curiously, she was automatically denied Social Security Disability. It is now in appeal.

So here I am an inventor and a writer, working two jobs to pay bills, taking care of a sick wife and two growing boys. I work courier jobs that combined pay me just under $20K, the perfect amount because it keeps us qualified for Medicaid. What else would ever pay all her medical bills without killing us with monthly premiums? In circumstances like mine, there are no options.

The advantage is it gives me the chance to revisit the poverty trap. It is a spiritual thing. Bad luck moves us from concepts and obligations that can be avoided in this lifetime to fellowship and communion. It is a blessing.

But the unaware are on every side. There in our classroom were what seemed to me a most ungrateful group. The gal to my right blurted out how hungry she was. "Where is the food?" She never stopped talking to the young lady next to her throughout the six hour session. At least half were like that. Though in their twenties, they were like bad teenagers. They kept getting up and walking to the bathroom. One man in the back chided the saintly Manny with, "Why you makin' us listen to this for the whole six hours? The last teacher let us out in just two. Just give us our certificates!"

Manny continued undaunted and even stretched it to six and a half. He did it for me, no doubt, and for the few quiet couples on the other side of the room, along with the man with the missing leg, who might gain from a program like that if a few other miracles take place. For the rest it may have been a thirty minute detention. He does this because, as he said, "I like to help people."

Now that is my kind of man. And probably yours. He probably voted for John Kerry. But I can overlook that. This little message of mine isn't about who to vote for. It is about caring enough to seek out realistic solutions, or honestly asking ourselves whether we should even try. It is about being like Manny. $30,000 grants are nothing to sneer at. But if they are not enough to deal with the reality of inflation do we bump it up or do we can it altogether?

I would like to hear from you. What is your take? Mine is that if this program isn't really helping anyone then we should stop funding it. Take the millions of dollars in property tax monies that are paying for this program and replace the 1/2 cent sales tax we just voted for to help out schools. Reducing sales tax would actually help the poor by decreasing inflation by 1/2%. We overlook so easily the fact that only the poor actually spend all of their money. That's why none of them will qualify to buy decent homes. They have no money invested. Think about it. It is the people who spend their money that pay sales taxes. As a result, the poor are paying more taxes than the rich.

Recognizing this fact, why not give the poor a sales tax exemption card? In Palm Beach County, that would reduce their inflation by another 6%.

But that might be a bad idea. People like me might find one more reason to keep down their income deliberately.

There might be some other ideas to erradicate poverty you or I have. Lets discuss it on THE GUIDE's brainstorm forum. Click here.

(For more articles by James Carvin click here)