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  1. #1
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    Poverty: The New Growth Industry in America

    http://www.huffingtonpost.com/dean-b...b_1833158.html

    Recent trends in poverty rates should have the country furious at its leaders. When we get the data for 2011 next month, we are likely to see yet another uptick in poverty rates, reversing almost 50 years of economic progress. The percentage of people in extreme poverty, with incomes less than half of the poverty level, is likely to again hit an all-time high since the data has been collected.

    The situation is made even worse by the fact that so many of those in poverty are children. In 2010, 27 percent of all children in the country were reported as living below the poverty level. For African-American children, the share in poverty is approaching 40 percent.

    Many will blame the welfare reform law in 1996 that passed with bipartisan support. That is appropriate. This bill involved a great deal of political grandstanding and removed guarantees that could have protected millions of families in a severe downturn like what we are now seeing.

    Advocates of this bill who now profess surprise at the result need to turn to a new line of work. There were plenty of people at the time who warned that the lack of federal guarantees could lead to severe hardship in an economic downturn. No one has a right to be surprised on this one. The surge in the poverty rate in a downturn like the present one was a predictable and predicted outcome of the legislation.

    However, there is the other side of the story, the overall state of the economy, which is the more important cause of the increase in the poverty rate. The vast majority of the people in this country rely on work for the bulk of their income and that would also be true for the tens of millions of people in poverty, if work was available. These people cannot find jobs in today's economy, or at least not full-time jobs that pay anything close to a living wage.

    The reason why so many of these people cannot find jobs is the incredible economic mismanagement by people with names like Robert Rubin, Alan Greenspan, and Ben Bernanke. These people thought that the bubbles that drove the economy in the last two decades, the stock bubble in the '90s and the housing bubble in the last decade, were really cool. They somehow thought that either the bubbles would not burst or that it would be easy to pick up the pieces after a crash. In Robert Rubin's case, he personally profited to the tune of more than $100 million from the housing bubble after he left his post as Treasury Secretary to take a top position at Citigroup.

    As much as it is important to have strong safety net protections to ensure that people are able to survive tough times, it is even more important to have a strong economy that can generate good paying jobs. Unfortunately, there is nothing on the political agenda at the moment likely to bring the economy back towards full employment any time soon.

    Both presidential candidates claim to be committed to deficit reduction as though there is magical process that causes private businesses to start hiring workers when they see that schools are laying off teachers and defense contractors are laying off factory workers. Just as few politicians had the courage in 1996 to stand up and say that the welfare reform bill would jeopardize the security of millions of families, few politicians are prepared to stand up now and say that we actually need more government investment to create jobs and rebuild the economy.

    The reality is that the collapse of the housing bubble created an enormous demand gap in the economy. In the short term, this gap can only be filled by the government, whether we like it or not. Until we do get the economy back on its feet, and start creating the millions of jobs that are needed, the poverty numbers will continue to be horrible. That is why the main route for fixing poverty requires fixing the economy.
    The only voice of sanity in these insane days of party hacks and religious ideology to concepts most people don't even know of. Bravo Dean Baker!!! (mind you this guy called the housing bubble back in 2002, YEARS before it happened).

  2. #2
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    But its too liberal of a website -cubsgirl

  3. #3
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    It sad how when pandits and party hacks speak on such meaningless issues (aka talking points) people talk about it all day, but people ignore real issues. Here is a real issue about a legit problem that is on the way and no one is talking about it.

    I guess U.S. propaganda is really as efficient as people thought it is.

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    it is a sad time to be an american

  5. #5
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    Quote Originally Posted by EricMontross View Post
    it is a sad time to be an american
    Its a sad time to be pretty much anyone who isn't upper middle class and up.

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    Quote Originally Posted by asandhu23 View Post
    But its too liberal of a website -cubsgirl
    Visit my Blog.



    "Glad the GOP finally came out with an Obamacare alternative. Can't wait to see their alternative to the Iraq War." - @LOLGOP

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    Quote Originally Posted by asandhu23 View Post
    Its a sad time to be pretty much anyone who isn't upper middle class and up.
    So, just the majority of Americans then?

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    A lot of wallowing in misery here. Sheez.

    A good article and it backs-up what most of us already know - the economy needs a jump-start.

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    Quote Originally Posted by John X Doe View Post
    A lot of wallowing in misery here. Sheez.

    A good article and it backs-up what most of us already know - the economy needs a jump-start.
    It also says that both parties are doing nothing about it, and that deficit reduction is NOT what is needed (nor is austerity). Dean Baker is one of the best economists in the country. The guy called the housing bubble back in 2002 (before all other mainstream economists). He knows the deficit is NOT AN ISSUE.

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    Quote Originally Posted by John X Doe View Post
    A lot of wallowing in misery here. Sheez.

    A good article and it backs-up what most of us already know - the economy needs a jump-start.
    A jump-start is a quick short-term fix to a bigger problem. This economy needs something else.....

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    Quote Originally Posted by steelcityroller View Post
    A jump-start is a quick short-term fix to a bigger problem. This economy needs something else.....
    Exactly, a "jump-start" would be considered a stimulus. I doubt that conservatives approve of this measure.
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    But the economy is getting better.... Thank god for all these part-time minimum wage jobs lowering that unemployment rate.

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    Quote Originally Posted by steelcityroller View Post
    But the economy is getting better.... Thank god for all these part-time minimum wage jobs lowering that unemployment rate.
    It is getting better but it certainly isn't happening in the way that anyone wants.

    If there are more jobs to be created, then we need for demand to come from somewhere and when everyone is scared there is going to be less demand. It is a catch-22 that isn't going to be solved easily. I certainly don't have a solution for it.
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    Quote Originally Posted by dbroncos78087 View Post
    It is getting better but it certainly isn't happening in the way that anyone wants.

    If there are more jobs to be created, then we need for demand to come from somewhere and when everyone is scared there is going to be less demand. It is a catch-22 that isn't going to be solved easily. I certainly don't have a solution for it.
    Obama could have solved it years ago but he didn't. He needed a bigger stimulus package. His package was 700 billion, while he need a stimulus package of 1.4 trillion. Every legit economist (including Dean Baker) was stating this at the time. The stimulus money that Obama did get through is actually working today, but it's not enough.

    Unfortunately Obama and the Democrats are playing along with this whole "deficit reduction" farce. At this moment, we need a bigger deficit (meaning a weaker Dollar), and a bigger Stimulus to recover lost demand from the housing bubble (the one that both parties created). Both parties are very much to the right of the population, and the presence of occupy last fall was proof of it.

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    One of the stimulus measures that Republicans support that I believe would be very successful is 100% capital expenditure deduction. If you buy a tractor this year, then you can deduct the full expense as opposed to accumulated deduction. That will get a business that is on the fence about whether to expand this year or wait to make up their mind. These are businesses that are making money but unsure about the future. It won't affect a business that is losing money or soon to go out of business. I think if you were to make that change we would see the I of our GDP increase and we would see a great resurgence.
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