The Poverty Cycle

Both Absolute and Effective Demand have to be matched by productivity.

In some cases, people demand more than they can supply. This is seen as living beyond one’s means.

This is a common problem among the worker class as they are weak against the onslaught of their desires as their absolute and effective demand.

This leads to the poverty cycle which has 4 phases:

1. The worker gets low wages
2. Inflation or lack of discipline causes an increase in expenses
3. Poverty results from the mismatch of revenue and expense
4. Poverty creates a lack of empowerment which prevents the worker from raising his revenue

Preventing the Poverty Cycle

The root cause of the poverty cycle is unchecked demand.

The Minimum Needs Policy offers a counterweight to basic effective demand which it seeks to supply.

However, provding the basics such as education, food, and lodging will not prevent people from losing money from excessive spending.

Such spending can be blocked by having transactions done through a centralized system or app.

The system will deny such impoverishing transactions and prevent the poverty cycle from starting.