Fair warning, I'm a dummy trying to talk about stuff I don't fully understand, but I wanted to see others' thoughts on this.

In the 1960s, America's GDP (per capita) was $3,000.
Also, in 1960, the federal poverty limit was $3,000 for a family of four.

In 2023, the GDP (per capita) was $82,034.
The federal poverty limit for a family of four in 2023 was $30,000.

This can't be good for the American people. Unless I'm drawing comparisons between two completely unrelated things?

People who are barely in poverty today would have to earn ~2.7x the amount they earn to stay consistent with those who were barely in poverty in the 1960s if GDP and FPL were still equal to each other. So what about the families caught in the middle? Too high earnings to get help and too low to thrive? They just suffer, I guess.

Out of curiosity, I calculated what the thresholds would be if the percentages of GDP to FPL were swapped between 2023 and 1960.

1960s numbers adjusted if FPL matched 2023's percentage:
GDP=$3,000
FPL=$1,111

1960s numbers adjusted if GDP matched the percentage comparison of 2023:
GDP=$8,100
FPL=$3,000

Please let me know if it actually matters that the GDP per capita is 2.7x the federal poverty limit for a family of four. Also, let me know your thoughts.

I was reading this text from the Washington Post (sorry for the maybe paywall):

https://www.washingtonpost.com/opinions/2022/10/06/xi-jinping-crackdown-china-economy-change/

The opinion asserts that in response to liberalization of Chinese life, driven by capitalistic economic growth, is the reason that Xi Pinjing "cracked down in every sphere imaginable — attacking the private sector, humiliating billionaires, reviving Communist ideology, purging the party of corrupt officials and ramping up nationalism (mostly anti-Western) in both word and deed."

My conspiratorial brain latched on to the humiliating billionaires line, and started thinking about a between the lines message along the lines that billionaires are good and should not be humiliated, a subtle warning-response to the progressive grumblings here in the U.S. that a failure to support capitalism will result in totalitarianism.

Then I started thinking about the questions, are billionaires good for society? I had always held the position that a billionaire is a market failure (in my econ 101 understanding of the term), much like pollution. It is improper hoarding and unfair leveraging of capital into disproportionate and un-earned degree of pesonal privilege.

It is certainly a by-product of euro-american capitalism, whereby the desires and welfare of the many are trodden on by those with the ability to fight and to shape the regulatory machine meant to protect the interests of the common-wealth.

I see a few possibilities. One, is that my understanding of economics is wrong, and producing as many billionaires as possible is the ultimate goal of capitalism and in fact good for everyone, even in theory.

Two, it is indeed as I suspect, a market failure. And the failure here is one of degree, it is not, in fact problematic to have some individuals with significantly greater wealth among us, and is, in fact, beneficial overall, but to have some with so much more than the rest of us (wealth inequaility) is a result of getting in the way of a clean functioning marketplace.

Three, economic theory is working as described, and economic theory/activity is an insufficient foundation for the maintenance and success of a whole society, and we need to find a way to constrain it to its own sphere, so that it provides us with what we need to be healthy and happy, but no more.

I turn to the bright minds of tildes: am I looking at this right?