Sep 29, 2012

One in four Americans live in poverty. What has gone wrong with the American dream?

Is America competing with India on poverty? Looking at the latest data that Oxfam (Ignoring the nation's poor: A political peril in 2012? http://bit.ly/SewjEf) has put up, I am not only shocked but must accept that it has taken me quite sometime to digest the appalling American poverty figures. If every one in four American's live in poverty or near poverty, a  number that has grown by 22.6% since 2007, and every one in seven is living in hunger, and with unemployment soaring, wonder what has gone so wrong with the  American dream. 

In India, the poverty estimates have recently been raised from 27.5% to 37.2% after the Planning commission accepted a report submitted by economist Suresh Tendulkar. The new poverty line pegs the number of Indians in poverty at 410 million, a jump of about 100 million. If we were to accept the official poverty line, although I have always argued that India's poverty line is too stringent, it is one in every three Indians who live in poverty.

If in the United States, it is one in every four Americans. In India, it is almost close to one in every three Indians !

In 2010, US official estimates show 46.9 million people living in poverty, up from 37.3 million in 2007 -- the fourth consecutive annual increase in the number of people in poverty. In 2010, for which data was released in Sept 2011, poverty remains the highest in past 52 years. A superpower cannot be sustained for long on a growing population of hungry and poor. Nor can the economic mirage hide forever the startling realities.

Jeffrey Buchanan, Oxfam America's senior domestic policy adviser, writes that while the economic shift that is taking place towards growing poverty does not find much of echo in media (like in India), the number of working families sliding below the poverty line has grown by over 25 per cent since 2007. Here he is talking about working families who have been impacted by the 2008 economic slowdown and have probably lost their jobs or are being under-employed since then. From 2007 onwards,10.4 million Americans have seen their incomes fall below the federal poverty mark, $ 23,500 for a family of four.

The US incidentally does not measure poverty the way the UN deliberately tries to underplay by computing it on the basis of a bare minimum that is need to survive, at less than $1.25 a day. In India, the official poverty line has been pegged even much lower at 64 US cents for urban areas and  52 cents for rural areas. India, as is quite obvious, wants to hide its poverty under the statistical smokescreen (Indian government seeks to lower official poverty line to 50 cents per day, Wall Street Journal, http://bit.ly/r3bF5B).

The question that arises is how come in a country which is considered to be the Mecca of economic liberalisation and free markets, where hundreds of billions of dollars are pumped in social security programmes, including supplement nutrition, poverty and hunger have broken all records? US has also gone in for Quantitative Easing (QE), which in layman's language means printing of currency notes, and still poverty zooms. Isn't it therefore time to sit up and take notice as to where and why has this economic dream gone bust?

Something has gone terribly wrong.

It is the flawed economic model that has probably outlived it's utility. It is the betrayal by the educated, including the mainline economists and the rating agencies, who have relentlessly worked hard to justify the wrongs. It is the all pervasive intellectual corruption, an art perfected by academicians, management gurus and policy makers, that has seduced the people to believe that the only path to progress is through growth economics.

To borrow the thoughts of Rabindranath Tagore I pray to God to let more and more people emerge free from the confines of economic fundamentalism. Where the mind is held high, and without fear; where knowledge is free ...

2 comments:

Bhavana said...

Yes, yes, yes...saw this downturn with my own eyes...knew of children being hungry (1 in 4 in NM in 2008), knew of adults in poverty--you see the trap of insurance and medical costs and transportation costs and house rentals are so high that one often had to choose between food and meds or rentals or car payments. There is so much of discontent and economic stress there. Why do you we want to imitate that?

Bruce Scholten said...

The American Dream became more realistic under Clinton. But Bush's attempt to fund 2 (largely needless) wars without raising taxes relied on an unsustainable housing bubble & Wall Street 'securitisation' that dwarfed junk bond scandals of the 1980s. I'll vote Obama-Biden coz Reagan-Bush neoliberalisation has failed.