Yes and no. If you're "white" (whatever that means), male, somewhat educated, somewhat sober, and unprincipled, it is very difficult to be truly poor -- you have to work at it. But then, such people rarely do.
If you're non-white (whatever *that* means, but if you fit the description, you know), are female, have no college at all (or worse, failed to graduate high school -- even worse, cannot read, write, and do simple arithmetic), drink (drug, gamble, or otherwise flush your life down a hole), or stubbornly adhere to some principled integrity or code of values, your chances of being poor increase. One such "black mark" is okay; two problematic; three or more pretty much guarantees a marginal existence.
Certainly, there are ample opportunities in US. The streets are not paved with gold but money changes hands pretty freely in a somewhat open marketplace. For every door that is closed, another is open. However, the river can carry away wealth as fast as it brings it. For some, a very large number of doors are closed -- and hidden fees, terms, and conditions attach to many of those that remain open.
It's worthwhile noting that many of those not considered "poor" are neither wealthy nor even moderately secure. Nearly half of Americans surveyed live "paycheck to paycheck" -- they have essentially no savings, not even enough cash on hand to survive a month without income. Astonishingly, 20% of those earning over $100,000 a year say they, too, live paycheck to paycheck. This basic measure of solvency focuses on cash flow, not assets; the sad truth is that nearly everyone is deeply in debt, owing more than they own. So most Americans are both cash-poor and asset-poor -- including those with above-average incomes.
Easy credit masks the terrible economic weakness of the average worker. Most people have expensive-looking toys (cheaply made with Third World slave labor); they wear decent-looking clothes (cheaply made with Third World slave labor); they drive cars freely, fueled with cheap (yes, $3 a gallon is still cheap) gas (extorted from Third World countries at gunpoint). Many live in not too shabby homes, mortgaged to the ears -- if they build up any equity, they pull it out with a line of credit. Everyone has debt; many have much; some have entire mountains of it. A man with a dollar in his pocket may be wealthier than one with a fine house, car, and teevee -- and $1000 on deposit in the bank but $150,000 worth of debt. The second man may live "better" but he's not just poor; if he should slip and the bankers call in his paper, he'll be bankrupt.
Meanwhile, median rents in 2000 were about $600 a month or about $150 a week. That doesn't sound too bad but in 2003, nearly 36 million households lived beneath the official US poverty threshold -- $18,810 for a family of four or less than $1600 a month. You need to picture someone -- with a wife (also working) and two kids -- both together earning $1600 a month, paying $600 in rent, with $230 a week left over for every single other expense -- gas, food, clothing, and of course the credit card bills. This man is not poor -- the US government says so -- but every day is a battle against the wolf at the door and one small step taken wrong spells disaster. No clarinet lessons for Junior.
The truly ugly effect of easy credit, high rents, a loose labor market, and the resulting pervasive semi-poverty enjoyed by the majority of Americans is FEAR. Fear keeps workers quiet on the job and on the street. You do not talk back to the boss, not even to protest violations of the law; for every celebrated lawsuit winner there are a thousand who are simply fired and lack recourse. The prospect of a family man losing his home -- losing his family's home -- is so terrifyingly real that he can pretty much be told to do anything, anywhere, anytime. Meanwhile, he is obsessed with his personal insecurity, which is regularly pumped up by the evening news and the continuous deluge of ads with attractive, stylish, wealthy models that take every possible opportunity to show him, graphically, what a complete failure he is (unless, of course, he's willing to go deeper into debt to buy this shiny toy here). Such a man finds it difficult to march in the streets, even to protest the grossest abuses of power. He simply doesn't care who gets burned, so long as he thinks it's not himself and his family.
There *is* a substantial social safety net in US -- welfare may suck but it sucks better than nothing at all. There is no excuse for sane people to go ragged and begging in America -- except perhaps a stubborn unwillingness to play the government game. People on welfare don't generally want to stay that way -- but of course, habits are hard to break. There is definitely a disincentive built into the system; any attempt to find work risks being cut off from the little security one has got. It's actually worse to be a member of the working poor than to sit on the monthly check -- if you are supporting a family on Burger King's paycheck, you are truly poor.
Depending on how you count it, the wealthiest 20% of Americans have about 80% of the total net worth of all Americans; the remaining 80% of people have 20% of the money. That's bad enough but what's really ugly is that the wealthiest 1% have (again, depending on how you count) between one-third and one-half of everything. Since everything in America has a price, laws are bought like any other product or service; and only enough money is spent on the workers -- including the middle class -- to keep us alive, quiet, and working for the top dogs.
Poverty is, to some extent, a personal choice. Even drunks decide to remain drunks; it's possible to stop drinking, recover some personal dignity, and go look for work. Any secretary whose boss demands oral sex is free to give it up; she doesn't *have* to say no, get fired, lose her apartment, and sleep in her car while trying to find other work, dreaming of suing the evil SOB. Any professional engineer -- say, a construction site safety inspector -- is free to sign off on dangerous practices and hope he's elsewhere when the bridge falls down, rather than risk being fired and blackballed, watching his wife take the kids to his MIL's while he holds down the counter at Radio Shack. We all choose.
But in large part, poverty is a social choice -- made by the rich for all the rest of us. Poverty -- I don't even speak of spiritual poverty, merely of material -- is the main method by which the majority is kept quiet -- too busy and too fearful to make trouble or demand a minimum standard of behavior from the very wealthy and powerful among us.
Long ago, the Romans said that to keep control of the public, Caesar must offer them either bread or circuses. More bread meant less starvation, therefore less discontent; more circuses (that is, the bloody gladiatorial contests in the stadia) meant less boredom, therefore less discontent; either way, less chance of riots and revolts. Most Caesars figured out that circuses were far the better choice: cheaper than bread, for one; for another, hungry men seek bread before justice.
The attraction of Socialism as an economic model is obvious: If America's wealth were redistributed equally, most of us would have about 5 times as much as we have now. Instead of a mountain of bills, the average worker would have money in the bank and own his home outright. He would laugh at outrageous workplace demands, secure in the knowledge that he could afford to wait until a more reasonable boss came along. He would insist on a shorter workweek and use the time to enjoy his family, perhaps to pursue an education or the arts. Schools would have the funds to employ sufficient numbers of well-trained teachers; useful programs could be pursued -- environmental initiatives, the colonization of Mars, the eradication of disease. A better fed, better educated, happier, and more secure public would never permit wars of adventure and our nation as a whole would benefit by being a better global citizen.
Unfortunately, Socialists refuse to face the basic truth about people: they require incentives to work at all. Millions play the lottery daily in the face of staggering odds; only the prospect of becoming fantastically wealth eggs them on. All workers are lottery players manque, hoping to work themselves into a decent job -- hoping against hope for earnings that outstrip expenses and permit a decent life now and a comfortable retirement later. Socialism destroys incentive by eliminating the opportunity to become very wealthy. Worse, Socialism leads to central planning -- and no government bureaucracy can efficiently distribute labor, resources, goods, and services on a national scale. The net effect is laziness and mediocrity. It is not even necessary to throw in the evils of totalitarianism that come inevitably with Socialism's companion political model, Communism. Most nations in Western Europe are essentially Socialist Democracies and their stagnation is famous.
No, we must respect our system for its successes -- Capitalism is proven the most efficient distributor of wealth. Yet it is hard to see how any man, in a fair game, can possibly amass 1000 or 100,000 times the wealth of another player. No matter how wise, clever, hardworking, or lucky, the best man at the table should only be worth perhaps 100 of the average sort.
There are three reasons that the fantastically wealthy are indeed so: compound investment, inheritance, and perversion of politics. The first two mechanisms undermine the efficiency of the dead hand of Adam Smith by removing marketplace pressures artificially. I'll come back to the last.
Compound investment means that you can buy a building and rent it out; then take the modest profit from so doing and buy another building. Or, equivalently, invest the money with a bank or mutual fund. Whatever you did to earn the money to begin with, is finished; you labor no more. Instead, people pay you to use your money -- and you turn around and invest that money, too. Pretty soon, you have so much money coming in that you need never even think about working -- and there is no limit to this process. You can have 100 M$ and still sit at home doing nothing, while others work and pay you to get still richer. You don't even have to manage the money; you pay others to do it. A total idiot or aquarium frog could do as much.
Inheritance means that we don't all start out equal -- or even close. Some start with next to nothing; some start out with that 100 M$. There is nothing remotely equitable about this -- but that's not the point. The point is that there is not really any true incentive for the average worker, since nothing he ever does will get him a piece of that 100 M$; while he struggles to earn his first million, the other guy is busy doubling his huge bankroll.
The combination is deadly. The rich are born rich and get richer as long as they live, without doing anything; the poor are born poor and if they don't want to stay that way, they'd better create new wealth themselves and hope the rich don't steal it all.
Paris Hilton doesn't work -- never has, never will. You decide just how criminal that is.
The greatest threat of great wealth to Democracy is the direct and indirect perversion of that political system. When everything is for sale, laws and votes are, too. Since public laws are the rules under which the economic game is played, it's not surprising that a significant portion of the wealth of the rich is spent buying laws that favor them. This is not always simple corruption; paying off a city councilman for a zoning variance is almost quaint compared to what's really going on at the highest levels of government. At the extreme, the rich hire Presidents to make highly profitable wars. Kids from poor homes go to die; the people they kill get angry and blow things up in US. The rich don't care, because they don't spend much time in high-risk targets. If terrorists ever manage to smuggle a nuclear bomb into downtown LA, Bill Gates won't know about it until he sees it on teevee.
Something can be done -- and it's not much:
1) Make the capital gains and corporation taxes progressive, like the income tax. You should be able to earn your first 50 M$ without working, perhaps. After that, it should get difficult. If you make it to 100 M$, you should have to go back to work full time if you want to hope to push it much higher. Similarly, giant corporations do no social good; net annual profits above 100 M$ should be heavily penalized.
2) Confiscate excessive inheritances and make inheritance taxes steeply progressive. There's no problem with modest inheritances; we all want to give our kids the best possible start. Indeed, it's nasty and wrong to tax the first million at all; a corner store might appraise for that much -- and who could object if a man's son takes over his store? Taxes should be modest on the first 10 M$ of inherited wealth. After that, they should rise steeply -- very steeply. It should simply not be possible to turn 18, having never done anything useful to society, and start the game with 100 M$.
It's quite probable that nothing can be done about the perversion of Democracy by excessive wealth -- not directly. Human nature is unchanging. So long as a rich man has something to gain from paying, say, a million dollars to tilt the playing field in his direction, he will find a way to do it. But if it becomes nearly impossible even to amass great wealth, then the perversion will drop to tolerable levels.
None of this envisions a Utopia. There will still be poverty and inequity. Even Jesus said, "There will be poor always."
But eliminating the free riders on top of the stack -- the hugely wealthy who consume everything and produce nothing -- will let us all breathe easier. There will still be plenty of incentive to create wealth -- nobody will sneer at the prospect, say, of investing in a risky business for the chance at a few million dollars. But the truly wealthy will only be able to spend their money -- to put it back into circulation without demanding that we give it back to them again.
This is true Capitalism, true Democracy, and true Freedom -- the freedom of every man on a level playing field, battling market forces for a share of the American Dream. This is true incentive and -- what you desire -- opportunity for any man not to be poor.