The United States government uses only a household's cash income befor

To choose between option A and C

Looking closely, option A seems to in the wrong direction. The government calculation is based on the cash income and option A says that for 99% the yearly cash income is the majority of its disposable income and this means that the governments calculation here is correct. This option thus supports the governments calculation.

Option C wins.

Any answer choice which says that the Government's calculation method is flawed and needs to be revised is the answer. "C" brings out a discrepancy. Established that means accepted research studies by private sectors indicates that the figure is less than the figure indicated by the Government's study. Since multiple studies made by the private sector give a different figure, there has to be some defect in the Government's calculation method and it ought to be revised. Hence the answer is "C".

This is my interpretation:

P1: The United States government uses only a household’s cash income before taxes to determine whether that household falls below the poverty line in a given year; capital gains, non-cash government benefits, and tax credits are not included. However, yearly cash income is not a fool-proof measure of a given household’s disposable income.

Cash ---> Government policy (premise)

Conclusion:Others ---> Cash ---> Government Policy change (Need from Question Stem)
Others ------> Government policy change (Strengthen)

1. Needs to shows that Other factors influence Cash, therefore government policy needs to change
2. Needs to shows that Other factors ---> Government policy change i.e. Government assumes cash (before tax) is the only determinant, others are not.

A. strengthens the fact that cash is sufficient for government to retain its policy (weaken policy needs changes)
Cash before tax = yearly cash income = Disposable income >>>>>> Other factors ---> Other factors negligible[/color]

'

Govt uses family's cash income to determine whether it falls below poverty line.
The Govt does not consider other factors (A, B and C)
But cash income is not a fool proof method of disposable income (e.g. retirees getting high CGs)

What strengthens that Govt's methods need to change to measure true poverty?

If we can say that true poverty is different from what the Govt measures, then we can say that the Govt needs to change the method. If we see that Govt is measuring true poverty almost at point, then the change may not be required and the Govt's measure may be a good indicator.

a ) For more than 99% of those classified as living in poverty, yearly cash income comprises the vast majority of each household's disposable income.

This says that for 99% people classified as poor, cash income = disposable income.
So the method works in 99% cases hence the cash income measure seems to be a good indicator of disposable income in our circumstances. So our conclusion is not strengthened that we need to change the Govt method.

b) While the government’s calculation method indicated a 12.5% poverty rate in 2003, the same calculation method indicated anywhere from a 9% to a 16% poverty rate during the preceding decade

How the rate indicated was diff over diff years is irrelevant.

c) Most established research studies conducted by the private sector indicate that the number of people truly living in poverty in the U.S. is less than that indicated by the government’s calculation method.

So most other studies show that true poverty is less than what Govt is calculating. So it seems that cash income is not a good measure of disposable income for a substantial number of cases in reality and hence the Govt should change its method. Strengthens

d) Several prominent economists endorse an alternate calculation method which incorporates all income, not just cash income, and adjusts for taxes paid and other core expenses.

It doesn't matter if other economists endorse another method. We need to find whether the Govt's method is good enough or not.

e) The government’s calculation method also erroneously counts those who do not earn income in a given year but who have substantial assets on which to live during that year.

This just shows another factor D missing in Govt's method. But does that affect the actual numbers calculated? We cannot say. Perhaps all factors A, B, C and D are irrelevant in our situation because people don't have these other earnings.

Answer (C)

It's really hard to choose between C & E. I choose E over C coz it points out a flaw in the government's method. And C, however, is based upon the studies whose result could be right or wrong. Is there any flaw in my reasoning? How to choose E over C?

egmat, isn't option E also a strengthener ?

it says "The government’s calculation method also erroneously counts " -> this means the method is incorrect in considering some people with income from non - cash assets.

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