A lot of the coverage of the Census Bureau’s new Supplemental Poverty Measure treats it as a bit of a wash — child poverty down, poverty among the elderly up. But for me the big news is that America’s safety net isn’t working.
The world officially hit 7 billion people today, and so to celebrate I decided to take a look at what’s happened to poverty in the world as its population has increased — many, many thanks to Nick Rizzo and to Laurence Chandy and Homi Kharas at Brookings, two Englishmen who provided him with unpublished data and were extremely generous with their time.
Swiss Re reinsures a lot of life insurance. As a result, it could lose billions of dollars if a lot of insured people die young, due to pandemics, terrorism, or the like. To hedge that risk, it has sold about $1.8 billion in mortality bonds to date. Such bonds earn a healthy yield, so long as there’s no big rise in mortality. If there is, then the bondholders lose some or all of their principal, and it’s used instead to make those unexpected life-insurance payouts.