One is just a normal person who has fallen on hard times and is just struggling to survive. The other is usually bat-shit crazy and simply cannot function in society at all. "Street kids" and the hippie street people adopt something like the latter as a lifestyle choice. Some are erm "hobos" that live in tents in the woods and steal scrap metal and shit from trains to survive. Thats the nitty-gritty of it. You can blame Reagan for kicking out all the non-violent schizophrenics and the sort from the mental institutions, but there is definitely a divide between somebody who is homeless by external factors and one that is homeless by internal factors.
You're making some mistakes here.
- Not everyone who is chronically homeless is "batshit insane" or "can't function in society". Often, the reason they can't function in society is because they're homeless and the problems it causes. See point #2.
- External and internal factors are linked. If you have problems, it could make you homeless. If you are homeless, it can cause you problems. Someone who's living on the streets for years upon years is going to have "internal factors" even if there were none before. There are, in fact, plenty of chronically homeless people who are, well, fairly normal people, or who at least would be if it weren't for their homelessness.
- Where do you even draw the line between "internal" and "external" factors to begin with? It's always an interaction of the two. Just because someone is mentally ill or otherwise incapable of working within society doesn't mean that it's entirely his fault, especially when you consider that being able to "function with society" both depends on what you're like and what society's like, and you can't assume the individual is the problem there.
You are giving people too much credit. Normal (which is almost a loaded word, sorry) people simply do not allow themselves to reach the point where they have absolutely nothing and have nothing but a dirty set of clothing to work with. They go to something like living out of a car, using a PO box as an address and they recover one way or another. The people who somehow manage to stay utterly destitute but out of prison and out of mainstream society are that way because they are incapable, apathetic or unwilling to work themselves out of the situation they are in.
When I say external factor, I mean something like, say a carpenter gets laid off, cannot find a job no matter how hard he tries, is eneligble for any welfare benefits, spends his savings, sells everything he can to pay rent, is eventiually evicted and now lives in his truck he parks in woods and tries to get work at the local day-labor.
Internal factor, I mean the person is a schizophrenic with no family, a drug addict with no support, a guy with a personality or philosophy that refuses to participate the society, or a guy that simply cannot get his life together, a misanthropic guy that simply cannot deal with people and can never hold down a job and is kicked out of shelters, ect, ect.
The idea is if the problem lies with circumstance, or the problem lies within the individual. People are not helpless, they are ultimately responsible for their own destiny.