Here is a shocking fact from the Institute of Policy Studies' analysis of some new Credit Suisse data on wealth around the world: "Of the Half-Billion Poorest Adults in the World, One out of Ten is an American."
Now, that sure sounds weird. Given the levels of poverty experienced in Haiti, Guatemala, Chad, and Bangladesh, can it really be that 10 percent of the world's poorest people live right here in the USA? Even Paul Buchheit, who wrote the piece, said it "seems impossible, with so many extremely poor countries, and it requires a second look at the data, and then a third look."
And he's right. It seems impossible because it's not true.
His take, though, is that it's right: "In the world’s poorest decile (bottom 10%), one out of ten are Americans, many of whom are burdened with so much debt that any remnant of tangible wealth is negated."
Being in debt isn't the same as being poor
Consider a young college graduate struggling to repay his student loans versus a single mom getting by on $2 a day because selling plasma is her only source of income. Only a crazy person would consider the recent graduate poorer than the impoverished woman. But because the recent graduate has negative net worth, the Credit Suisse data classifies him as poorer.
So when the Institute of Policy Studies says 10 percent of the world's poorest people are Americans, they are talking about people like our recent college grad — not people like the desperately poor mom.
But that's absurd. The poorest people in the world are the people with rock-bottom material living standards. People to whom generally nobody will loan money, who thus find themselves "richer" than people with student loans or underwater mortgages.
The good news about the United States is that way fewer than 10 percent of the world's truly poorest people live here. They are mostly living in South Asia, in sub-Saharan Africa, and in parts of the Caribbean basin. The bad news about the United States is that despite being one of the richest societies in human history, the number of people living in extreme poverty isn't zero.