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China is eating our lunch. What might we do about it?

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Poverty and recovery

In 2008, the first year of the Great Recession, the number of Americans living in poverty rose by 1.7 million to nearly 47.5 million.   While hugely painful, that rise wasn't surprising given the unraveling economy.   What is surprising is that recent census data show that those poverty numbers held steady in 2009, even though job loss worsened significantly that year.  

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Clearly, the sheer scale of poverty -- 17% of the country's population, and anywhere between 18 and 27% of its children (varying from state to state)

, is unacceptable, particularly since poverty is the biggest determining factor in poor educational achievement K-12.   (Black kids do very poorly in school throughout a state like Mississippi or in the poor neighborhoods of any major American city, but they do just as well as white kids in every school that is operated on any of the hundreds of US military bases anywhere in the world.   Think about that.   What's the explanation for this difference in the academic performance of black children?   It's clearly that the parents of all kids who go to these schools on military bases have jobs, economic security, and health care -" very very different from the vast majority of black parents in Mississippi or in the poor neighborhoods of any major American city.)  

The new Republican House should take a good look at these facts, before it strives for any more slashing and burning.  

The latest poverty figures are from the Census Bureau's "alternative" data, developed in the 1990s to count the income and expenses that the "official" data omit.   For example, the official measure counts only cash income to gauge poverty (defined as $21,756 for a family of four in 2009).   The alternative figures cited above, which closely follow criteria from the National Academy of Sciences, include noncash federal benefits, like food stamps (and set the poverty line at $24,522 for a family of four).   That gives a truer picture of a family's economic status.  

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What analysts have found is that the antipoverty effect of government intervention in 2009 was profound.   Calculations by the Center on Budget and Policy Priorities, a liberal-leaning research group, show that specific stimulus provisions -- including expanded federal jobless benefits, new and improved tax credits for workers and bolstered food stamps -- kept 4.5 million people out of poverty in 2009.   Only Social Security and the earned income credit did more to fight poverty.  

The results are likely to be roughly similar in 2010 because most of the 2009 law was continued last year.   The portents going forward are not good.  

Federal aid is being scaled back, even though growth is not yet robust enough to make a sizable dent in unemployment.   Late last year, Republicans blocked the extension of a successful stimulus program that had created 250,000 subsidized jobs for young people and low-income parents.   They claimed the stimulus was an expensive failure, even as they pressed to renew the high-end Bush tax cuts.   As part of the tax-cut deal, President Obama and Congress agreed to extend federal jobless benefits in 2011, but the checks will be $25 less a week than under the stimulus.   That reduction could push an estimated 175,000 more Americans into poverty in 2011.   The deal also included a one-year payroll tax cut that will benefit most workers, but it is even less helpful to the lowest-income workers than a now-expired tax break in the stimulus.  

Nearly two-thirds of Americans choose higher payroll taxes for Medicare and Social Security over reduced benefits in either program.   And asked to choose among cuts to Medicare, Social Security or the nation's third-largest spending program -- the military -- a huge majority said cut the Pentagon.   Even the Tea Partiers are now open to slashing the Pentagon's budget.

While Americans are near-unanimous in calling deficits a problem -- a "very serious" problem, say 7 out of 10 -- a majority believes it should not be necessary for them to pay higher taxes to bridge the shortfall between what the government spends and what it takes in.   By a huge margin, they say raise taxes on the rich instead!   But do they have the courage of their convictions when they go into the voting booth.   Mostly, no.

The long-term costs of reducing federal help at this critical time

With 14.5 million people still out of work, and more than 6 million of them jobless for more than six months, reducing federal help now will almost ensure more poverty later.   That would impose an even higher cost on the economy and budget because ever-poorer households cannot spend and consume in ways that boost employment opportunities for others.  

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We know it goes against the prevailing rhetoric to argue that more and better government policies are still needed to repair the economy.   It is also unpopular to argue that programs that have succeeded for decades in reducing poverty, like Social Security, need to be preserved even as they are retooled for the 21st century.   To argue otherwise is to deny a wealth of evidence to the contrary.   And yet some people close to Obama say that he is giving serious consideration to the Republican quest to cut social security payments.

President Obama must explain to the American people that the country needs to continue relief and recovery efforts, especially programs to create jobs.   Without that, tens of millions of Americans stuck in poverty will have little hope of climbing out -- and many more could join their ranks in the very near future.   (Click here for source article.)

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Several years after receiving my M.A. in social science (interdisciplinary studies) I was an instructor at S.F. State University for a year, but then went back to designing automated machinery, and then tech writing, in Silicon Valley. I've (more...)

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