U.S. economic collapse condemns 50 million Americans to poverty in 2012

Despite the United States federal government’s stimulus programs and various social initiatives, the U.S. Census Bureau released its latest statistics Wednesday in a report titled “America’s Families and Living Arrangements: 2012.” It found that poverty in America is growing far greater than what congress had anticipated.

With President Barack Obama being labelled as the “Food Stamps President,” new government data may confirm this notion for his critics.  The figures show that the nation’s poverty rate grew from 49 million in 2010 to 49.7 million last year, or 15.1 percent.

These figures were calculated using a new method called the Supplemental Poverty Measures that is designed to provide a more enhanced measure of poverty. It includes tallying government aid as income and subtracts medical out-of-pocket fees, child care costs and work-related expenses.

The poverty threshold for a two-parent family with two children is between $21,175 and $25,703.

Congress had first projected in September that the poverty rate would have dropped to 46.2 million. Not only did it increase, but the number of children living in poverty, which is at 13.4 million, or about 20 percent, only decreased by a very small amount.

It isn’t just children who are remaining in poverty, but the number of seniors also living an impoverished lifestyle has remained steady at 6.2 million, or 15.1 percent.  Furthermore, the poverty rate among married couples, urban residents, female-headed households, foreign-born non-citizens and residents of the northeast and west slightly rose.

Meanwhile, poverty for Caucasians, residents in the south and Midwest and Hispanics declined.

A report from the Congressional Research Service (CRS) found that welfare has become the single largest federal expense in the U.S. as it has grown 32 percent in the last four years and hit $1 trillion in 2011.  It is more than the national defense, Social Security and Medicare budgets.

When President Obama took office, welfare obligations stood at $563 billion, but many welfare programs have increased.  For instance, the costliest welfare program is Medicaid, which jumped from $82 billion in 2008 to $296 billion. The food stamps program was second on the list with $75 billion – 47.1 million people are on food stamps.

Other social safety nets include child care payments, adoption assistance, foster grandparents, low-income assistance for AIDS patients, weatherization assistance program, Indian health service and more.

Arloc Sherman, senior researcher at the Center on Budget and Policy Priorities, told Bloomberg News that a lot of government anti-poverty measures have prevented millions of others from becoming impoverished.  He wrote late last year that without government assistance the national poverty rate in 2010 would have been 28.6 percent.

“If significant federal cutbacks occur, the combination of those cuts, state budget cuts, and ongoing labor-market weakness may drive poverty still higher in the next few years and cause it to remain very high long after the economy recovers,” wrote Sherman in Nov. 2011.

Pew Research Center’s Economic Mobility Project published a separate report on the same day that found wealth in the U.S. has dramatically fallen.

It concluded that high-income areas lost the greatest amount of wealth by 47 percent from $289,281 in 2007 to $154,000 in 2009.  People living in poverty-stricken neighborhoods had their wealth drop from $32,778 in 2007 to $3,000 in 2009.

When it comes to states, the Census Bureau found that California is the most likely state to have the highest poverty in the country. This is followed by the District of Columbia, Arizona, Florida and Georgia.

Nobel laureate economist Milton Friedman told PBS in an interview that the two biggest factors to lower the poverty levels are the decriminalization of drugs and introducing parental choice in schooling.

“Because the place where poverty has been really serious and disastrous for the country has been in the inner cities, and in the inner cities that poverty is driven by the way in which the attempt to prohibit drugs has destroyed the stability and safety of the inner city, and the way in which our school system has shortchanged the low income classes in this country,” explained Friedman in the interview.

“I think it’s a scandal what has been happening in the school system so far as lower income classes. The dropout rates, the illiteracy rate, you know literacy in the United States was a lot higher in 1890 than it is now.”

Are the poor really that poor, though?

In a Fox Business Network segment, host John Stossel interviewed several people waiting at a food pantry and he found that a lot of them admit to having items like air conditioners, video game consoles, televisions and cellphones.

Citing Census Bureau statistics and his research, Stossel concluded that “to be poor in America is to live a life better than most have lived through history.”