World Bank: Extreme Poverty Worldwide Has Plummeted

The World Bank recently announced that the world had reached a new milestone. Extreme poverty, the Bank explained, is likely to dip below 10 percent worldwide for the first time in 2015.

Extreme poverty, according to the WB, is a situation in which a person lives on an income of less than $1.90 per day. In other words, we're talking about real, grinding poverty, and not a lifestyle at the poverty line in America where the poor have cell phones and air conditioning. In other words, this measure of poverty isn't a relative measure, as is often used by the UN for measures such as its child poverty report.

According to the Bank:

The World Bank projects that global poverty will have fallen from 902 million people or 12.8 per cent of the global population in 2012 to 702 million people, or 9.6 per cent of the global population, this year.

We must note that richest countries of the world have already eradicated extreme poverty. There are not people who live on $1.90 in the US, Canada, Australia, or Western Europe. These countries simply do not contain more than a negligible number of people who live in mud huts, walk miles a day to get clean water, and have no access to modern health care. Even in Eastern Europe, where Soviet-style socialism persisted into the 1990s, we rarely find a population with more than 1 percent of the population that endured extreme poverty levels.

So, we look to Latin America, Asia, and Africa to find the populations that continue to endure under conditions of extreme poverty.

All data is from the World Bank and reflects data collected over the twenty years from 1992 to 2012, the last year that data is published. Worldwide during that period, extreme poverty fell from 34.7 percent to 12.7 percent.

Latin America is the least poor of the regions outside the wealthy west and Eastern Europe. The largest countries in Latin America have all been well below the worldwide rates for extreme poverty over the past twenty years:

In addition to seeing that Latin America has lower poverty in general than the world overall, we also can note that there has been substantial improvement in the twenty-year period. In Mexico during this period, extreme poverty dropped from 9.7 percent to 2.7 percent. Extreme poverty dropped even further in Brazil where the rate fell from 20.8 percent to 4.9 percent. In Columbia, the drop was smaller, but remained on the right track, with extreme poverty dropping from 8 percent to 6 percent.

Conditions are considerably worse in southern Asia and southeast Asia where extreme poverty rates exceeding 40 percent can be found. Nevertheless, in these cases we also find profound improvement over the 20 year period. In China, for example, extreme poverty fell from 57 percent to 11 percent. In Indonesia, the rate fell from 57 percent to 15 percent. Some of the least amount of progress was found in Bangladesh.  But even , there, extreme poverty dropped by 20 percentage points from 63 percent to 43 percent. 

The worst situation, however, was found in Africa where overall extreme poverty rates were higher, and the least amount of improvement was seen.

Among the largest countries in Africa, we find that extreme poverty continues to plague large portions of the population, although significant improvement was experienced in South Africa and Ethiopia. In Ethiopia, from 1992 to 2012, extreme poverty dropped from 67 percent to 33 percent, and it fell from 32 percent to 17 percent in South Africa. 

Federal spending, state by state

The Pew Charitable trusts recently released new data up through 2013 on federal spending in the states.

If we look at federal spending as a proportion of each state's overall GDP, we find that the recipients are not exactly evenly distributed:

Source: Pew Charitable Trusts  (based on data from 2004–2013)

This is all federal spending, so these totals are a combination of military spending, social welfare programs such as Medicare, and ordinary civilian federal spending, including civilian research facilities and other programs funded by federal grants.

These are proportional numbers, so they are a function of both the amount of federal spending as well as the overall size of GDP. So, in California, for example, which receives immense amounts of government spending, is nevertheless a state where federal spending is offset by a very large private sector. In a more rural state with few major private industries, such as New Mexico, the state shows up as being highly reliant on federal spending.

By this measure, the state most reliant on federal spending is Mississippi where federal spending is equal to 32 percent of the state's GDP. The state least reliant on federal spending is Wyoming where federal spending is equal to 11 percent of the state's GDP:

Source: Pew Charitable Trusts  (based on data from 2004–2013)

The above measure gives us a sense of how much federal spending is taking place relative to overall economic activity. But, it tells us little about how much the feds are spending in each state relative to the tax revenue being produced in each state.

To discover that, we need to compare federal spending to tax collections from each state. So, I took gross tax collection by state, and then subtracted refund totals. I then compared the "net" collections to Pew's total federal spending data in each state. (The tax data used was 2013 data.) We can then measure the result in terms of dollars spend in each state per dollar in tax revenue collected. States that have a value of less than a dollar in the map below receive less than a dollar in federal spending for every dollar in taxes paid from that state. So, for example, Ohio receives 91 cents in federal spending for every dollar collected in taxes from Ohio:

I've divided this graph up into "net tax payer states," "break-even states" and "net tax receiver" states. The lightest shade of blue are states that, by far, pay in more than they receive back, such as New Jersey and Minnesota. The next lightest shade of blue are states that are more or less "break even" in the sense that spending and tax collections hover somewhat around a 1-for-1 relationship. The darker blue states are states that receive considerably more in federal spending than they pay in taxes.
Here are all states, including values:

Naturally, these values aren't spread evenly within the states themselves, either. Areas that are more rural and reliant on agriculture will tend to be net tax receiver areas both because farmers and ranchers receive a lot of government subsidies, and also because agricultural work tends to have lower productivity than urban work.

Urban areas, in contrast, produce most of the tax revenue, so highly urbanized states will tend to more often be "break even" or "net tax payer" states.

Other Considerations

One thing that must not be ignored is the fact that the US government spends more than it takes in nationwide. During 2013, for example, the federal government spent a dollar for every 80 cents it took in via taxes.

Nationwide, the tax-spending ratio is not one dollar, but it about $1.20. So, states that are getting around $1.20 back for every dollar extracted in taxes are really just at the national average.
This is being made possible by old-fashioned deficit spending and also by monetization of the debt which the Federal Reserve facilitates by expanding the money supply. Once interest rates rise or the international value of the dollar begins to fall significantly, this sort of overspending will no longer be possible, and many states will find themselves in dire straits. (States that are "net tax payer" or "break even" states will adjust the best to any significant disruptions in federal spending.)

Government Shutdown Averted: Record-Breaking Spending to Continue

Republican Congressional leaders and President Obama recently agreed on a two-year budget deal. And in case you were worried, rest assured there were not any significant cuts to any government program.

Oh sure, there will be spending increases for some programs, and cuts for others, but the total amount spent is only going up with minimal changes to the big picture. Some of it will be covered by tax revenues, but about half of it will be covered, yet again, by an increase in debt. The Brookings Institution notes:

The second problem is that the lubricant Congress used to enact the deal was money it doesn't have. Thus, according to CRFB, all the spending in the deal cost $154 billion but the offsets in the bill amounted to only $78 billion. Thus, the true net cost of the bill, excluding budget gimmicks, was $76 billion. As always, the money will be obtained by additional borrowing, thereby increasing the nation's debt.

So, more than $150 billion will be spent, with 76 billion of that added to the national debt so future taxpayers and pay the principal and interest.

Moreover, much of this undoes the alleged "cuts" that were in the earlier sequestration. Remember when we were promised that government spending would be reduced over time thanks to the sequester? Pay no attention to that sort of thing. Nowadays, we have what's called "sequester relief" also known as "more spending."

All of this comes after several years of astronomically high government spending that came in the wake of the 2008 financial crisis, so to claim in any way that there have been anything resembling "cuts" in any context that extends beyond a single fiscal year strains the boundaries of credibility.

After having already driven through a massive expansion in Medicare for prescription drugs in 2003, George W. Bush kicked off an even bigger expansion in late 2008 with TARP and other enormous increases in fiscal "stimulus." Obama has been more than happy to keep us on that plateau:

Now, you're likely to read a lot about how this program was slashed, or that program was "cut," in the latest budget deal, but there's certainly no danger of overall spending going down.

Thanks to the way things work in DC, every new budget deal involves a lot of logrolling where some politicians promise to support new spending, while other politicians agree to cuts. This is done in the context of promising support for some other political favor on some other part of the budget or on future legislation. Everyone understands that in the big scheme of things, there's no political will to cut much of anything.

After all, where would anyone make any actual budget cuts? Let's look at where most of the money is spent. Here's the 2015 breakdown:

Source: Office of Management and Budget, Table 5.1

There Is No Public Support for Spending Cuts
It's hard to see where any of these cuts could come, politically speaking. When many people gripe about government spending, it is often a safe bet that they are really only complaining about spending that goes to programs they don't like.

For example, lopsided majorities of Americans oppose any cuts to benefits in Social Security or Medicare, which combined make the single biggest government expense.

In fact, in 2013, when Pew surveyed Americans as to which government programs should be cut, lopsided majorities opposed any cuts to Medicare or Social Security. When asked what programs should be cut as part of budget negotiations in DC, 87 percent of respondents opposed cuts to Social Security, while 82 percent opposed cuts to Medicare. (The popularity of these programs extends across Republicans, Democrats, and unaffiliated voters.)

If Social Security and Medicare are off limits according to 80 percent of the population, that puts 36 percent of the budget off limits right away. And unless the US plans to default on its debt, the government is locked into another six percent on top of that. (When interest rates start to go up, that six percent will get a lot bigger.)

So where to cut? Perhaps, we could cut defense? According to Pew, 73 percent of those polled are opposed to cutting defense. That puts another 23 percent off limits, so we're now up to 65 percent of the budget that few want to cut. Pew reports that 71 percent of Americans are opposed to cuts in "aid to needy" (i.e., Medicaid, TANF, etc). That leaves us with cuts to highway funds, scientific research, and other forms of discretionary spending. Those programs are all popular too.

Indeed, the least popular programs, those which more than a third of those polled would like to cut, are the State Department and Foreign Aid. Unfortunately for deficit hawks, those two programs combine for a paltry sum of 38 billion dollars. In other words, only one percent of the budget is ripe for cutting. Good luck getting the government budget under control.

Again, there are no significant cuts planned, but even if there were, they would come after years of substantial expansion. If we look at the three biggest areas of spending (defense, poverty programs, and entitlement spending) we'd see plenty of growth over the past decade (in constant 2009 dollars, millions of $):

Source: Office of Management and Budget, Table 5.1

Many critics of growing government spending like to imagine that everything's being driven by spending on poor people, but it's not. In fact, spending on poverty programs barely outpaces spending on the old-age programs Medicare and Social Security.

Over the past yen years, Social Security and Medicare have grown 43 percent. Meanwhile, programs aimed at the poor, such as Medicaid, the earned income tax credit, food stamps, and others, grew 48 percent over the same time period.

Defense spending, which is also near historic highs, grew 11 percent over that time.

Poverty programs will see increases in coming years as Obamacare subsidies increase, but spending on Medicare is likely to accelerate as well. While Social Security may be topping out, retirees are likely to continue receive more back in Medicare benefits than they paid in. Indefinitely.

Of course, if Republicans manage to gain control of the White House and expand control of Congress, we'll likely see cuts to poverty programs. But those cuts will be matched by more military spending, and we'll see no overall decline in spending. Medicare will continue to expand.

Deficits Make It All Possible

Although it is abundantly clear that few want to see any cuts to government programs,  most can agree that they don't want any new taxes.

So, if the voters want more spending, but no tax increases, how will the new spending be possible?

Fortunately, we can just add it to the deficit! People used to worry about the deficit, but those days are gone. Now, we can just keep the Medicare and Obamacare cash flowing, and it's no problem, because we can just borrow:

Thanks to the American love of charging current spending binges to future generations, the 2015 deficit was 438 billion — which is an improvement over the years of 2009-2012 when the deficit topped a trillion dollars each year — but deficits year after year have added up to a total government debt of 18 trillion dollars:

A little trimming of one program here or another program there is nothing more than window dressing.

So far, thanks to a continued demand for US debt globally, and thanks to partial monetization of the debt through the Fed, the feds (with the approval of the voters) can continue to pretend that the binge can go on forever.  As long as the central bank continues to successfully play the game in which interest rates for US government debt remain low, it will continue to be relatively painless for the US to rack up huge deficits and debts. Certainly, other large economies in the world are doing the US a favor by being even more debt-ridden and fiscally unpredictable than the US. So, US debt looks relatively attractive.

When the Spending Binge Ends

However, when the day arrives that US debt suffers from declining global demand (whether for economic or geopolitical reasons), maintaining the spending spree will suddenly become a lot more expensive. That 6 percent of the federal budget will get a lot bigger, and programs like Medicare, Medicaid, and Defense will all be faced with significant cuts to service the debt.

Americans do not want to see any cuts to any of their favorite programs (which is all of them). Thus, the political will to cut budgets will never come domestically. It will be forced on us when foreigners begin to dump US debt and force up its price.  In other words, the decision to slash benefits will be made for us by global investors.
Graphs by Ryan McMaken.

A Better View of Poverty Rates: We Must Consider the Cost of Living

This week a number of wire services picked up a story in which states are ranked according to which states are the "most expensive states to raise a family." The list, which was created by a private company to drive web traffic to its site, attempts to quantify the cost of raising a family by factoring in government mandated family leave, the cost of child care, and other factors.

The use of mandatory family leave is rather novel, given that mandated leave raises the effective minimum wage for many workers, and thus negatively impacts the least-skilled workers the most.  Nevertheless, the list appealed to the common-sense notion that there's more to one's standard of living than a relatively high income. The cost of living is an important factor.

The US Poverty Rate Does Not Account for Local Cost of Living 

Given the importance of the cost of living, it is very problematic that the official poverty rate totals for US states do not take costs into account.

When measuring poverty rates internationally, poverty is just defined as households that make 50 percent or 60 percent of the national median income. Although these measures often attempt to take into account differences in the cost of living among different countries, measuring poverty this way provides its own set of problems. It simply makes poverty a purely relative measure, so we end up with a situation where purchasing power for a median household in one country (say, Portugal) is actually lower than a poverty-level household in another country (say, the US).

The US official measure, on the other hand, attempts to get around this problem by defining the poverty rate as an actual dollar amount based on what a household can buy. The federal government has set the poverty income at $24,250 for a family of four in 2015.

The problem is this dollar amount is applied nationwide and then used to calculate poverty rates. So, a household in Arkansas at this income level is deemed "poor" while a household in California at the same income level is deemed equally poor. However, the cost of living in much of Arkansas is quite a bit lower than in much of California.

If we fail to adjust for the cost of living, the poverty rate  map looks like this:

In this case, the highest poverty rate is found in Mississippi with a rate of 23 percent, with Arizona and New Mexico close behind at 21 percent and 19 percent, respectively. New York and California are a dozen states down the list with poverty rates 15 percent for both. (See here for full list based on 2009 calculations.)

Many have noticed certain regional trends here, and that has led to a myriad of articles claiming that so-called "red states" have higher poverty rates than the "blue states." In many cases, "red states" is really code for "low tax" or "free-market-ish" state. In other words, this map "proves" that low taxes and freer economies cause more poverty.

This might be a conundrum if it were not for the fact that this measure of poverty completely ignores the plight of low-income households in states where the cost of living is very high. The biggest offenders here are, not surprisingly, California and New York, where rents and the cost of living in general is very high.

The feds have long recognized the discrepancy here, and in the fine print have long noted that poverty rates should only be used as very general "guidelines" or measures over time. Comparisons among states are discouraged.

That doesn't stop pundits from claiming that blue states like California and New York have been successful in combating poverty through tighter regulation of business, and higher taxation.

If we adjust the states and poverty rates for the cost of living, however, the map looks a bit different:

In this case, the state with the highest poverty rate is California at  23 percent. Arizona and Florida are close behind with rates of 22 percent and 20 percent, respectively. New York has risen to sixth place with a poverty rate of 18 percent, while Mississippi has fallen to eighth place with a rate of 17 percent.

Here we see our bias-confirming assumptions no longer seem to apply since  no correlation is apparent along the lines of the red-state/blue-state claims. Right-wing Indiana, at 15 percent, is more or less equal with left-wing Illinois, while Mississippi and New York, with widely divergent public policy regimes, also have similar poverty rates. (See Table 3.)

Obviously, we have to look somewhere beyond our neat-and-nice ideas about red states and blue states to come up with an explanation.

Of course, poverty can be a function of so many things, that it's impossible to generalize. Public policy is certainly a factor, but so are cultural factors, access to capital, the transportation infrastructure, and more. Some states are influenced by the presence of Indian Reservations (such as Arizona) where local economic policy is more influenced by federal law than state law.

But most of the discussion about "rich states" and "poor states" has long been skewed by the fact we tend to ignore cost of living.

As a final illustration, we can look at median incomes from each state. The median income figures put out by the census bureau do not account for regional "price parity."

Using just the basic median income numbers from the Current Population Survey, we get this:

The US median income is $51,849, and many high-cost states come in well above this, with Hawaii at $59,244 and California at $57,688.  Meanwhile, Mississippi and Louisiana come in at $39,011 and $39,637, respectively.

State median incomes vary by as much as $31,000, with New Hampshire coming in at $70,063 which is $31,051 higher than Mississippi.

But once we adjust incomes for price parity, we find that many of the high-income, high-cost states fall quite a bit in the list:

First, we notice that this compresses the variation in median incomes. The difference between the highest-income state (New Hampshire at $66,159) and the lowest income state (Louisiana at $43,462), shrinks to $22,697.

We also notice that New York now has the second-lowest median income in the country, right between Louisiana and Mississippi. New York now has a real median income of $44,326, while Mississippi has a real median income of $44,944. California and Hawaii fall from being near the top of the list to below the national median income, with median incomes of $51,369 in California and $50,984 in Hawaii.

Basically, the purchasing power of a median household in New York or California is much lower than has been traditionally suggested.

This is also important to keep in mind when comparing US median incomes and poverty rates to foreign countries. Much of the US is very inexpensive in terms of cost of living and well below northern Europe, New Zealand, Australia, and even Canada.
Maps and graphs by Ryan McMaken.

Is Living-at-Home an Indicator of the Standard of Living?

In this article, I noted that median incomes — even when adjusted for cost of living, taxes, and social benfits — are higher in the United States than in Europe. What's more, Americans at poverty level (i.e., 60% of national median income) have more purchasing power than median-level households in many European countries.

But what are some outward indications of this? The UNICEF report on childhood poverty, for example, attempts to quantify the effects of poverty by asking extremely subjective questions like "Did you feel stress this week?" and using the answer to compile a type of index. The problems with indicators such as these should be obvious, since "stress" can mean any number of things.

But let's try for a somewhat more concrete manifestation of a low standard of living: adults living with parents.

In the US, at least, it's been long accepted that new household formation is an indicator of the state of the economy. Specifically, it is assumed that young people who can find gainful employment will be able to move out of their parents' homes more quickly, and also potentially find spouses and/or have children sooner. Economic factors are generally blamed on trends in living at home, as with the discussion about the "boomerang effect" during the most recent business cycle.

This has been the case historically in the US as the marrying age of Americans has fluctuated over time and geography with the availability of land, which was a key factor in economic self-sufficiency in an agrarian setting.

It appears to have been an important factor in Europe as well, since in pre-industrial times, there was little land available for purchase or settlement — and even less in the way of manufacturing jobs — and adult children often had to wait to simply inherent the family lands rather than attempt to find a new household.

So what percentage of adults ages 25-34 still live with their parents nowadays? According to Eurostat, the percentage of adults in this group that still live at home varies substantially from country to country:

The US numbers are from the Census. (Men tend to live with their parents in much larger percentages than women, by the way.)

The percentages here swing quite a bit between 57 percent in Slovakia and Denmark at 1.4 percent.

It's reasonable to accept that cultural factors may be at play here.  Clearly, living at home with one's parents appears to be frowned upon more in Scandinavia than in other rich countries of similar median income levels.

Nevertheless, if we do plot the living-home numbers against median disposable income, we do see a pretty clear correlation:

The countries where the median household has more purchasing power have fewer cases of adult children living with parents. Few should be surprised to find Greece and Portugal up in the top left of graph, for example. Almost all countries with median incomes above $20,000 have living-at-home percentages below 20 percent, while almost all countries with median income below $30,000 have living-at-home levels above 30 percent.

While it's not a perfect proxy for household purchasing power, the percentage of adults that continue to live at home in the prime family formation years does give us some insight into the real-world implications of the fact that real disposable income is lower in most European countries than it is in the United States.

A note on the data: This is all 2013 data, except for Turkey, which is 2007 (the most recent available.) The US data matches up with the Euro data on the age of the adults measured (i.e., 25-34), although in the case of the Euro data, it includes married or cohabiting adults children living with parents. These people are excluded in the US data. Fortunately for us, though, the percentage of people living at home who were also married or cohabiting is under 5 percent. 

Metro Denver: Average Apartment Rent Growth Sets New Record During Second Quarter

Third quarter multifamily vacancy and rent data will be coming out in a about a month, but let's have a closer look at the second quarter's numbers. If current trends are any indication, the third quarter — which tends to be the strongest quarter of the year for multifamily — will be another period of low vacancies and high rent growth.

The first graph shows the overall apartment vacancy rate in metro Denver through the second quarter of this year. The rate was 4.5 percent for the second quarter. that's down from the first quarter rate of 4.9 percent, and down from 4.7 percent during the second quarter of 2014. So, vacancies are low, given that 4 percent is pretty much as low as the vacancy rate ever goes in the metro area. From a tenant perspective, it's about as easy to find an apartment now as it was during the final days of the dot-com boom:

And when vacancy rates get low, we generally expect rent growth. But this time around, we're seeing some of the largest rent growth we've ever seen since the survey was first initiated in the early 1980s. The average rent in metro Denver during the second quarter was $1,265, which is the highest rent ever recorded in nominal terms. It's also the highest rent ever recorded in real terms, but I'll have to adjust the rents for inflation in a future post. The current acceleration in rents outpaces the 1990s:  

In fact, the past three quarters, when measured in year-over-year comparisons, show by far the largest YOY growth in rents ever recorded.  The second quarter's average rent of $1,265 was up an enormous  13.2 percent from the second quarter of 2014 when the average rent was $1,117. The YOY increase was over 12 percent for both the fourth quarter of 2014 and the first quarter of 2015:

Thanks to continued in-migration and a relatively small amount of new single-family construction, multifamily housing remains the most feasible option for many households. Those seeking affordability will move outward from the urban center to more affordable C-class units in further out neighborhoods. Some households will double up or take on roommates. 

The population growth data, though, won't come in for a year after the fact, so it's hard to know to what extent a lack of affordability is impacting in-migration at this time.

Compared to to other markets, the Denver market is experiencing some of the highest rent growth rates in the nation. But, of course, rent level remain well below those in San Francisco. 

Note: The report also tracks median rent, although, at this time, there is no significant difference in the trend between median rents and average rents. the median rent during the second quarter of 2015 was $1,225, which was up 14.7 percent from the 2nd Q 2014 median rent of $1,067. The median rent during the first quarter of 2015 was $1,203.

Colorado One of the Best States for Property Tax

This map from the Tax Foundation shows that Colorado has some of the lowest property taxes in the nation:

This should not be interpreted as a proxy map for which states have the lowest overall tax burden, for example. Note that Texas has relatively high property tax. But, Texas has no income tax so there's little we can discern about taxes in general from this map.

But when thinking about property taxes, it is useful to note that property taxes are especially damaging to people on fixed incomes like retirees and disabled people. Old people with low incomes, for example, would do fairly well in a state with high income tax and low property tax. But if property taxes are high, those seniors would get pummeled by repeated increases  in the property tax.

Denver Continues to Outpace the Nation in Latest Case-Shiller Home Price Index Data

Case-Shiller released new home price index data for July this week. As has been the case since 2012, the data shows continued increases in home prices. The first graph shows the index value for both the nationwide 20-city composite index, and the metro Denver index:

 

While the trend has clearly been upward in recent years, we are now seeing that a plateau has been hit in both the Denver metro area and in the composite index. Of course, the metro Denver plateau around ten percent points to continued strong gains in prices, and is a reason for current homowners and landlords to be happy. first time homebuyers, on the other hand, have less reason to be happy. 

At the national level, though, the composite index suggests more of a cooling in the market. Growth rates are clearly down from where they were back in 2013, and outside of Denver and San Francisco, price growth has moderated throughout many of the cities covered in the index.  Index growth is now flat around 5 percent, and has been so since last September. With interest rates at historic lows, this further suggests an inflexibility in the market that refuses to take off in spite of high accomodative monetary policy. 

In Denver, however, in-migration continues to drive strong price increases, though. The second graph compares the rate growth of the composite index and the Denver index.  Denver is clearly outpacing the nation overall.

Note also that the 2-city composite index is still below its former peak level. July 2015's index number was still 11.9 percent below the peak level, reached during July 2006. Metro Denver's July value, however, was well above its former peak and is at an all-time high. During July, the metro Denver index was 22.1 percent above the 2006 peak achieved during August 2006.

Comparing Whole Countries on Murder Rates Is Often Misleading

We often see the United States compared to a variety of other countries in terms of life expectancy, murder rates, and more. But, it's a bit dishonest to compare a country the size of Portugal, for example, with the United States.Portugal has ten million people and is not geographically diverse. The United States has more than 300 million people, and is extremely diverse in its geography.

So, it makes much more sense to compare the particular states within the US with foreign countries, and most people tend to underestimate the diversity in factors such as life expectancy and murder rates among states.

For example, the murder rate in Oregon (2.0 per 100,000) places it about 160th among 218 countries measured. That's quite low, and well below the US overall rate of  4.7 (per 100,000), which places it at 91st in the world. In other words, there are many places in the US that are well below the national murder rate, including Iowa, Wisconsin, and Colorado. If we were use this more detailed analysis, we would find that, in spite of claims that the US is a relatively high-crime country, much of the US is actually quite moderate, or even low, in this regard.

Were we to do this, we would then be asking ourselves not why the US murder rate is what it is. We would be asking ourselves what it is about Maryland, Louisiana, and South Carolina that are driving up the US murder rate.

Indeed, this should be done for other large countries as well. Mexico is a large country, so it's of little value to simply speak of the murder rate in Mexico as high. The question is this: where is the murder rate high in Mexico?

If we look at this analysis from The Economist, we find that the murder rate in much of Mexico is on a par with Costa Rica and the Bahamas.  And almost no one ever says "don't go to the Bahamas, or you'll be beheaded!" The perception of Mexico is as a high-crime area, and the Bahamas are seen as a serene place to vacation. But the answer is really more complicated than that.

The murder rates in Mexican states vary so widely that Yucatan state has a murder rate equivalent to the very low-crime country of Finland, while Chihuahua state has a rate equivalent to El Salvador, one of the alleged murder capitals of the world.

And if you want to take a vacation soaking up some sun in Cabo? No problem, amigo, because the murder rate in Baja California Sur is lower than the murder rate in Texas.

The overall murder rate is 18, but note the diversity:

 Source: The Economist.

And here are two wonderful maps I came across, which appear to be from an earlier version of the UNODC Global Study on Homicide.  Russia is another case where it's obviously useless to talk about the country-wide murder rate.

Colorado Foreclosures Down 19 Percent During Second Quarter

Foreclosure totals in Colorado during the second quarter of 2015 remained well down from the 2009 peak totals. There were 2,282 foreclosure filings during the second quarter of this year, which was a drop of 19 percent from the second quarter of 2014. There were 1,063 foreclosure sales at auction during the second quarter of this year, dropping 34 percent from the second quarter of last year.

Back in 2009, filings had peaked at 12,135 during the second quarter, and sales peaked at 6,686 during the first quarter of 2010:

Foreclosures are on schedule to end the year way down from 2014. So far, this year, there have been 4,154 filings and 2,208 sales at auction, which means at mid-year, filings and sales are both down 33 percent from where they were at mid-year last year. 

For more, see the state of Colorado full report:

2015_2ndQ Foreclosure Report by Ryan McMaken

A Quick Look at Median Household Income Up to 2013

The Census Bureau won't release 2014's median household income for another month or so, but we can have a look at trends up through 2014, for now. These numbers are not adjusted for inflation.

For 2013, the median household income in Colorado was $63,371. In the US for the same period, it was $51,939.

As we can see in the first graph, the Colorado median income level has been above the US level since 1990.

 

We can also see that over time, this gap has been growing. The second graph shows the gap between the Colorado median income and the US median income: 

 

The gap was negative from 1986 to 1989 when Colorado's median income was lower than the US. But since then, the gap has generally grown, and reached $10,000 for the first time in 2007. In fact, 2013's gap was the largest ever recorded with Colorado's median income coming in at 11,432 above the US level. 

The final graph shows percentage change in median income for each area. Colorado's YOY changes are much more volatile, as would be expected from an area so much smaller than the US overall. The sheer size of the US and its economy prevent large swings. However, there is a slight downward drift in the US median income increases over time. In other words, US median income seems to be going up by a smaller amount over time. In Colorado, what was a downward drift during the 1990s, appears to have stabilized somewhat since 2003. The YOY change in Colorado from 2012 to 2013 (10.6 percent) was the second largest ever recorded, second only to 1990's growth rate of 14.6 percent. The US rate of change for 2013 was 1.8 percent.

COTD: Metro Denver Home Prices Head Up in FHFA Index

The Federal Housing and Finance Agency has released it Expanded-Data home prince index data through the second quarter of 2015. The latest data shows the largest year-over-year increase in Colorado home prices since 2001.  The first graph shows the YOY change for both Colorado and the US. note that home price growth in larger in Colorado than is the case nationwide. 

In Colorado, the YOY home price growth, according to this index, was 11.2 percent from the second Q of 2014 to the same period of 2015. That's up from 9.9 percent for the 1st Q of 2015. YOY changes in the index for Colorado has generally been above 9 percent since the 4th Q of 2012.   

For the US overall, the YOY change for the 2nd Q of 2015 was 6.2 percent, which was up from 6.1 percent measured during the 1st Q of 2015. 

The second graph shows the index values themselves since 2001. We see that both the US and Colorado have generally followed the same growth pattern over the past 15 years, but since 2012, Colorado has increasingly been outpacing the US. 

With a relatively small amount of new home construction, coupled with a continuing inflow of new residents, it is no surprise that home prices have begun to outpace the nation since the nation overall is not sustaining the type of population growth has experienced in recent years.