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America's Greatest Shame: Child Poverty Rises and Food Stamps Cut While Billionaires Boom

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Source: AlterNet

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There are 16.4 million American children living in poverty. That's nearly one quarter (22.6%) of all of our children. More alarming is that the percentage of poor children has  climbed by 4.5 percent  since the start of the Great Recession in 2007. And poor means poor. For a family of three with one child under 18, the poverty line is $18,400.

Meanwhile, the stock market is booming. Banks, hedge funds and private equity firms are making tens of billions of dollars again, while the luxury housing and goods markets are skyrocketing. 

Most amazing of all is the fact that 95 percent of the so-called "recovery" has gone to the top 1 percent who have seen their incomes rise by 34%. For the 99 percent there's been an undeclared wage freeze: the average wage has climbed by only 0.4 percent.

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To add to the misery, Washington has decided that the best way to tackle childhood poverty is to have poor kids eat less. Both parties already have agreed to cut billions from the Supplemental Nutrition Assistance Program (Food Stamps). Starting this November 1, payments are scheduled to drop from $668 a month to $632 for more than 47 million lower-income people -- one in seven Americans, most of them children. (Three incredible graphs that visualize the issues in this story are at the bottom of this article.)

And more cuts are coming. The Tea Party House passed a bill to cut food stamps by $4 billion a year, while the Senate calls for $400 million in cuts. How humane! And since it will be part of the omnibus Farm Bill, President Obama will sign it. (I wonder how our former community organizer will explain this to the poor children he once tried to help in Chicago.)  

But that's just the start. More austerity is coming in the form of cuts to Social Security as well as a host of other social programs. When times get tough, you've got to suck it up and take more from the poor.

Rewarding Billionaires Who Increase Poverty?

It gets even more revolting when we realize that the financial billionaires who are profiting so handsomely from the recovery are the very same who took down the economy in the first place. They were the ones who created and pedaled the toxic securities that puffed up and then burst the housing bubble. Those financial plutocrats caused 8 million workers to lose their jobs in a matter of months. Those bankers, hedge fund honchos and fund managers are directly responsible for the rise in child poverty rates. Washington bailed out those billionaires and is now asking the poor and the middle class to pay for the ensuing deficits with further cuts in social programs at every level of government.  

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Why do we put up with such injustices?

Washington Is in Wall Street's Pocket

Before we entirely succumb to financial amnesia, let's recall how we got here. Since the late 1970s, the financial sector has been on a crusade to remove any and all financial regulations. The goal was to undo all the controls put in place during the Great Depression that so effectively curtailed financial speculation and outright gambling. Once deregulated Wall Street engineered a Ponzi-like housing bubble that netted it astronomical sums. By the time it burst in 2007, 40% of all corporate profits flowed into the financial sector. Wall Street wages grew by leaps and bounds.

As the crash hit, all the largest Wall Street firms, not just Lehman Brothers and Bear Stearns, were in serious trouble. Had AIG gone under, so would nearly every major bank and investment house, along with thousands of hedge funds that depended on AIG to ensure its toxic bets. So Wall Street's Washington cadre engineered a $13 trillion bailout consisting of cash, no interest loans and a program by which the Federal Reserve would buy up Wall Street's toxic waste at par value. To produce a financial recovery, the Fed also drove down bond interest rates which in turn drove money into the stock market, sending it to new heights.

Here's the best of all. After getting $480 billion in bailout cash, the top financiers in the country paid themselves more than $150 billion in bonus money for a job well done. Is this a great country or what?

What didn't happen is this: Mortgages were not written down in mass to assist underwater home owners and those who suffered from predatory loans. No lasting jobs programs were created to put the unemployed back to work. No lasting penalties were paid by the individuals who took down the economy. And there was no serious effort at all to cap financial wages and bonuses in the name of justice.

All in all, you could not have designed a more perfect program to enrich the rich and do absolutely nothing for the 99 percent -- and as a result, sink ever more children into poverty.

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http://www.runawayinequality.org

Les Leopold is the executive director of the Labor Institute in New York, and author of "Runaway Inequality: An Activist's Guide to Economic Justice" (Labor Institute Press, 2015)


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