When you establish that $136,500 is the real break-even point for an American family, you start to explain the rage you see in the American electorate—especially the animosity the “working poor” (really, the middle class) feel toward the “actual poor” and immigrants. Our entire safety net is designed to catch people at the very bottom, but it sets a trap for anyone trying to climb out. As income rises from $40,000 to $100,000, benefits disappear faster than wages increase. I call this zone the Valley of Death. At $35,000, a family gets SNAP food benefits and childcare subsidies. But move to just $45,000, and the family loses Medicaid eligibility. Now there are premiums and deductibles. For a family in New Jersey, the $10,000 gain is erased by an increase of $10,567 in costs. At $65,000, there is another cliff where childcare subsidies vanish. The $20,000 income gain is accompanied by $28,000 in new tuition payments. A family earning $100,000 is effectively in a worse monthly financial position than a family earning $40,000. At $40,000, you are drowning, but the state gives you a life vest. At $100,000, you are drowning, but the state says you are a “high earner” and ties an anchor to your ankle called “market price.”

An income of $140,000 provides a bare buffer against slipping into this Valley of Death, in which every dollar in income means the disappearance of nearly as much in benefits. And at the bottom of this valley lies ruin. Eviction, bankruptcy, or default are death penalties in the financial system. They leave you barred from the credit system (often for 7–10 years), barred from the prime rental market by landlord screens, and barred from employment in sensitive sectors. During the Covid lockdowns, the costs of participating in the economy were suspended while government transfers replaced or even increased income for those at the lower income scale. Childcare ($32,000), commuting ($15,000), and work lunches ($5,000) disappeared, and families earning $80,000 actually felt comparatively rich. Then it all came back, with the costs inflated. The rage we feel today is the hangover from that brief moment. Economists and politicians look at this anger and call it racism, or lack of empathy. They are missing the mechanism. The anger at the benefits given to the poor—the EBT card, healthcare, childcare subsidies—comes from seeing that people are getting for free the exact things that they are working 60 hours a week to barely afford. And these are just the bare costs of participation. The anger isn’t about the goods. It’s about the breach of contract. The American Deal was that effort = security. Effort brought your hope strike closer. But because the real poverty line is $140,000, effort no longer yields security or progress; it brings risk, exhaustion, and debt.

When you are drowning, and you see the lifeguard throw a life vest to the person treading water next to you—a person who isn’t swimming as hard as you are—you don’t feel happiness for them. You feel a homicidal rage at the lifeguard. We have created a system where the only way to survive is to be destitute enough to qualify for aid, or rich enough to ignore the cost. The Census Bureau tells us that the American upper class is ever-growing. Economists look at the federal government and cheer. “Look!” they say. “In 1967, only 5 percent of families made over $150,000 (adjusted for inflation). Now, 34 percent do! We are a nation of rising aristocrats.” Except that $150,000 line isn’t really the “upper class” line. It’s the survival line. About 34 percent of Americans, or a little more, have managed to escape deprivation. And the 45 percent of the country that the government and economists tell us makes up that middle class are the real working poor. These are the families earning enough to lose their benefits but not enough to pay for childcare and rent. They are the ones trapped in the Valley of Death.

“Poverty” has collapsed to 11 percent. All the anti-poverty policies of the last decades have worked as intended. But remember Mollie Orshansky. The poverty line doesn’t measure poverty. What it measures is the percentage of Americans who cannot afford a minimum food diet multiplied by three. That’s it. It’s not measuring who can afford rent. It’s not measuring who can afford childcare. It’s measuring starvation. Of course that line is going down. We are an agricultural superpower who opened our markets to even cheaper foreign food. Food is cheap. But life is expensive. The numbers on the cost of living above—that number of around $140,000? It shows you the costs of participating in our economy. The gap between that threshold and the nominal poverty line is the Valley of Death that most American families are struggling to dig themselves out of in a system designed to prevent them from escaping. And those falling poverty numbers that economists and bureaucrats gaslight you with? Those numbers are not evidence that the system is working. They are evidence that it is failing—and that economists and politicians simply refuse to admit it.