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The relationship between poverty and debt is complicated. Does poverty cause debt or does debt exacerbate poverty? For that matter, what exactly is poverty? Whether a definition of poverty should include a measure of debt is itself a controversial question. Researchers have been trying to quantify poverty for a very long time. The definition used in the United States was first developed by Mollie Orshansky of the Social Security Administration in the 1960s. It is based on the cost of food and the assumption that food is one-third of a family’s budget. Therefore, in the United States a person is “poor” if his or her pretax income is less than three times the minimum food budget calculated by the federal government for a family ...

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