Tuesday, December 10, 2013

The Safety Net Helps, but where is the inclusive economic growth?

I quote from an article in The Washington Post:
Government programs such as food stamps and unemployment insurance have made significant progress in easing the plight of the poor in the half-century since the launch of the war on poverty, according to a major new study........ 
According to the new research, the safety net helped reduce the percentage of Americans in poverty from 26 percent in 1967 to 16 percent in 2012. The results were especially striking during the most recent economic downturn, when the poverty rate barely budged despite a massive increase in unemployment. 
While the government has helped keep poverty at bay, the economy by itself has failed to improve the lives of the very poor over the past 50 years. Without taking into account the role of government policy, more Americans — 29 percent — would be in poverty today, compared with 27 percent in 1967............ 
Among the researchers’ discoveries was that deep poverty — incomes below 50 percent of the poverty line — has been stable at 5 percent of the population for about 40 years and that the safety net has grown especially powerful in protecting children from poverty.
The safety net seems to be helping quite a bit, although one person in six in poverty, and one in 20 deep poverty seems unacceptable to me. Perhaps we need to do more for those living rough on the streets and those with mental illness that keep them in poverty.

It is good that the number of children in poverty is lower, but the rate is not nearly low enough.

The problem is that our economy and our economic policies are making the rich much richer, giving the people with the highest incomes sky high incomes, while leaving the poor in poverty (and as recent posts showed, the middle class stagnating). Trickle down is not working and we need what Obama has been calling for -- a middle class led economic boom, with long term growth based on innovation and supported by government investment in infrastructure, human resources, and science and technology.

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