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Seven Defects of American Governance -- Part 2

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Headlined to H3 6/9/11

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Our government's policies of war and empire, the need for restoration of sanity to our monetary, fiscal, and trade policies, reversing the income inequality trend, and improving social justice, these I consider the seven major defects of modern day American governance.   Unless or until corrected, the risk of societal collapse is eminent; the only uncertainty is in the timing.   An earlier column focused on the War on Terror.   A discussion of the War on Poverty was initiated and is now concluded.

The War on Poverty:   The Organization for Economic Co-Operation and Development (OECD) monitors "social protection" which it defines as " all income transfers (or benefits) in kind and in cash that a society affords to its individual members in order to: avoid or alleviate poverty; or assist them in coping with a series of life contingencies or risks which, if they occurred might otherwise lead to a loss of income "or reduce or correct inequalities created through the primary (pre-transfer) income distribution."   Of the 26 nations, the U.S. spends less on social protection than all except South Korea with spending of about 7 percent of GDP, roughly one-half the average OECD GDP spending of about 14 percent.

Reportedly using similar guidelines to the Congressional Research Service which reports on aid to the poor only infrequently, the conservative Heritage Foundation calculates federal spending in aid to the poor was $522 billion in fiscal year 2008.   How this cost can ever be reduced without significant job creation with livable wage provisions is unclear.

While President Johnson declared War on Poverty in 1964, sometime in the Nixon-Ford years, Capitalism declared War on the Middle Class and Working Poor.   That is when Capitalism Hits the Fan, according to Dr. Richard Wolff, www.rdwolff . com.   This is when the owners of production ceased to share productivity gains with labor thereby impacting the middle class and the working poor alike.

Based on Census Bureau data, the National Poverty League reports, "in the late 1950s, the poverty rate for all Americans was 22.4 percent, or 39.5 million individuals. These numbers declined steadily throughout the 1960s, reaching a low of 11.1 percent, or 22.9 million individuals, in 1973. Over the next decade, the poverty rate fluctuated between 11.1 and 12.6 percent, but it began to rise steadily again in 1980. By 1983, the number of poor individuals had risen to 35.3 million individuals, or 15.2 percent.   For the next ten years, the poverty rate remained above 12.8 percent, increasing to 15.1 percent, or 39.3 million individuals by 1993. The rate declined for the remainder of the decade, to 11.3 percent by 2000. From 2000 to 2004 it rose each year to 12.7 in 2004."

In 2009, 43.6 million or 1 person in 7 lived in poverty, the highest number on record.   Blacks and Hispanics living in poverty approached twice the national rate of 14.7 percent; 25.8 percent and 25.3 percent respectively.   The highest rate of 35 percent was recorded for children.

Social spending in the U.S. is already dismally low, 0.4 percent of GDP vs. Western Europe's 2.6 percent using Sweden, Germany, France and the U.K.'s social spending as proxies.   Yet, a www.themiddleclass.org   analysis indicates roughly two-thirds of the spending cuts proposed by Republicans in Congress (as well at those of Obama) to reduce future deficits come from programs that directly benefit low and some middle-income Americans.   Unlike Willie Sutton, the proposal seeks to rob from the Dollar Store rather than the bank (National Security previously discussed) right next door.

There will be a battle royal between the Democrats and Republican over the next weeks and months over spending cuts.   But a single fact is this, unless this country proves capable of developing jobs, jobs and more jobs, and well-paying jobs at that, our economy is headed towards steep decline if not an utter collapse.

In closing, to paraphrase Martin Luther King, Jr., I urge your consideration and understanding of his observation that "aid to the poor is commendable, but it must not cause us (or our government) to overlook the circumstances of economic injustice which make aid to the poor necessary".

 

A retired MBA, I am a former corporate ideologue, former 3rd party advocate and current curmudgeon. While a continued supporter of a 3rd party, I have concluded their efficacy cannot be demonstrated until our form of Government is changed to (more...)
 
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Moving up the socioeconomic ladder has proved more... by Harold Hellickson on Thursday, Jun 9, 2011 at 6:24:24 AM