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What can governments do to end poverty in their countries? Is a solution possible under capitalism?

Hello, I come from Argentina, and in my country, poverty is an issue we still can't eradicate, even though extreme poverty has been around for many decades now.

What still baffles me is the fact that although the Government gives away money to those with reduced incomes, poverty is as bad as always. Poor people can now (at least) fulfill their basic needs, but they have now become dependant on the Govt to give them the necessary resources for life (and politicians do not care about this, since this way they can keep on "buying" their votes with cash). They don't have jobs (and some do not even bother to find one) and most still live in slums under really poor conditions. So, it's obvious this solution is only benefitial in the short run... eventually the Government is going to run out of money and we'll still have the same number of people in the streets.

Moreover, I read yesterday how India is going to start doing the same thing, but I guess that probably won't go anywhere either.

Now, what do you think is the solution to stop this vicious circle of poverty? What is your Government doing about it?

Bear in mind that Latin America has just extreme poverty levels (not as much as Africa), but still much more than the First World countries. At least in my country there is a surprisingly high number of slums (check some photos in wikipedia: http://es.wikipedia.org/wiki/Villa_miseria )

In my opinion, emphasis should be made on giving labour to these people outside-the-system. But for that, we need to offer public AND quality education. Yet I'm conscious that a malnourished child is not going to be able to be properly educated, is he?. So what can we do to ensure that child will have a better future? It's difficult to come up with a solution, but we're in the 21st Century now, it's about time we stopped poverty.

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    Jan 3 2013: In the current economic model shared by the vast majority of the globe, the human quotient, people, have relatively no value. Why?…In capitalism that which is rare has value, and people are not rare. In a "tribe" there is no poverty,everyone has a job to do and everyone works for the group, which translates to everyones needs being met; in a city however, you have ten people and five apples..…Absolute Poverty is not based on dollar amounts, it's based on allocation of resources. This planet is capable of providing the basic needs of every human on it and more, so NOT making available those resources to everyone is a choice made by those who "own" those resources. The people in poverty live outside a system which considers them to be common, valueless, yet, are taught to believe that same system will provide for them if they work hard enough, are lucky enough, or smart enough...

    So the in addition to education, population reduction needs to be established and redistribution of population, as concentrating populations in smaller and smaller areas is also a major factor in creating poverty and conditions which make said populations vulnerable to fluctuations in resource allocation models that are often outside our control....Ofcourse the first question from the established power structure is, "Who is going to pay for it?". The answer is everyone. Do we "need" a new stadium?…Do we "need" a tax cut?…Do we "need" a bigger military?…Do we "need" an individual with a billion dollars in their bank account?…It shouldn't be our governments we look to change first, it is our own individual perspective of ourselves and our place and purpose, here and now that must change first.

    And though contemporary definitions point to economic parameters and "prejudices" to describe them, the First, Second, and Third Worlds actually refer respectively to NATO Allied, Soviet Allied and Neutral countries during the cold war era… Them vs Us...Perhaps our language should change first.

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