President Trump calls affordability ‘the work of Democratic fraudsters’
President Donald Trump called affordability a “Democrat scam” and “the work of con artists.”
A Wall Street portfolio manager made headlines with a blog post announcing the new poverty line for an American family of four at $140,000 a year.
That’s a very large number. The federal poverty level for a family of four, set by the Department of Health and Human Services, is $32,150. Median household income in 2024 was $83,730.
This provocative Substack post, published on November 23rd, was written by Michael Green, chief strategist and portfolio manager at Simplify Asset Management.
Mr. Greene may seem like an unlikely source for a populist argument about the decline of America’s middle class into poverty.
“We have been implicitly told that families making $80,000 are doing well: safely above poverty, solidly in the middle class, and probably comfortable,” Green writes.
But when you consider how much households actually spend on child care, housing, health care, and other necessities in 2025, “an $80,000 household will live in extreme poverty,” Green writes.
Is $140,000 the new poverty line? Here’s the breakdown.
Green set out to create a “basic needs” budget for a family of four with two jobs and two children based on average spending in 2024.
- Childcare fee: $32,773
- Housing: $23,267
- Food: $14,717
- Transportation fee: $14,828
- Healthcare: $10,567
- Other essentials: $21,857
Add in taxes of about $18,500 and your total income is nearly $140,000. Green argues that this is how much a typical family of four needs to survive.
“It’s out of touch with reality.”
Unsurprisingly, many readers objected.
“Mr. Green’s argument is thatWrong.” Noah Smith, another popular economics blogger, writes: “Not only is it slightly wrong or technically incorrect, it’s just completely off base and out of touch with reality.”
“This…is the worst analysis of poverty I’ve ever seen,” wrote Scott Winship, a senior fellow at the liberal American Enterprise Institute.
Critics argue that setting the poverty line above the median American household income is patently unreasonable.
Critics have noted data that suggests most Americans have enough food, adequate housing, transportation and health insurance.
The authors tore apart Mr. Green’s calculations.
Take child care as an example: His $30,000-plus figure assumes families are paying for center-based care, but “only one-third of people with young children actually use it,” Winship said in an interview with USA TODAY. Those with older children will use it even less.
The word “poverty” suggests living without food, health insurance, or a moving vehicle.
Green: Poverty means “clinging on by the nails”
Green concedes that a family of four earning $80,000 may not starve to death. He says it doesn’t matter.
“What we experience in the United States is rarely absolute poverty,” he said in an interview with USA TODAY. “What we’re describing is instability. That feeling of holding on tightly with your fingernails.”
He said a family of four with an income of $80,000 may not go hungry, but they will face poverty. Families may not have access to the medical care they need or may be living on cheap junk food. Parents may not have the cash for decent child care, one partner will be forced to quit their job, and household income will plummet. and so on.
His Substack posts reflect efforts by think tanks and personal finance sites to quantify how much money families need to make ends meet.
The Economic Policy Research Institute provides a household budget calculator. According to the report, a family of four in Essex County, New Jersey, needs about $123,000 a year to achieve a “modest but reasonable standard of living.” In a previous blog post, Green examined the cost of living in the New Jersey borough of Caldwell.
Josh Bivens, the left-leaning think tank’s chief economist, said Green’s poverty line exercise was “basically trying to recreate a calculator.” “But it is clear that this measure is not a measure of poverty or material deprivation. It is a measure of a modest but adequate standard of living.”
Financial journalism site Investopedia uses similar calculations to estimate the amount of emergency savings a family should have (about $35,000 on average) and the lifetime cost of achieving the American Dream (about $5 million).
“Mr. Green is not wrong in the fact that the standards for setting poverty levels are outdated and do not take into account the burst of inflation across the needs faced by households,” said Caleb Silver, editor-in-chief of Investopedia.
Is the poverty line too low?
The federal poverty standard comes from a 1964 government report that set the family threshold at $3,000 based on food prices and household budgets at the time, Winship wrote. Poverty levels are adjusted upwards for inflation.
Greene is not alone in arguing that the poverty line is too low.
“Poverty levels do not accurately describe the actual needs of most American households today, and they should be much higher,” Silver said.
Greene said the precarious situation of America’s middle class is emblematic of widening income inequality and the continued concentration of wealth in America.
As a solution, he suggests “reintroducing progressive taxation.” This means imposing higher taxes on the wealthiest Americans and corporations, while easing the burden on everyone else.
His focus on income inequality puts him in the ranks of the Economic Policy Institute and other progressive voices.
But Greene says she would have voted for Donald Trump in 2024. Trump’s signature tax and spending bill reduced the tax burden on the wealthy.
Greene says much of the vitriol in her viral blog post comes from “people with a vested interest in the status quo” who are shaken by talk of six-figure poverty lines and taxes on the wealthy.
That’s nonsense, some critics say.
“If the middle class is less stable today, it is no more so than at any time in the history of the world,” Winship said.
In her upcoming post, Greene promises solutions to poverty and proposals to save America’s middle class.
“There will always be a middle class,” he said. “North Korea has a middle class. The question is whether that middle class is thriving.”
