The Fraud Of Hope And Change: U.S. Poverty Soars To Highest In 50 Years, One In 7 Americans Living In Abject Poverty, Halfway Through Obama’s Term

Sep 14, 2010 2 Comments ›› Pat Dollard

Times Online:

From the pawn shops of Las Vegas to the soup kitchens of Detroit, stories of hardship and bleak new data on poverty will deal a serious setback to the Obama Administration’s efforts to persuade voters that the US economy is looking up.

One in seven Americans is living in poverty after the sharpest increase in the number of working-age poor since 1959, census data released today is expected to show. The number will rise further next year, to as many as one in five, when the cost of childcare and health insurance is included in official calculations for the first time.

Approximately 45 million people out of a population of 307 million will be classified as living below the poverty line, demographers believe. If projections prove accurate the overall poverty rate could rise to 15 per cent — giving Republicans new ammunition with which to attack President Obama’s faltering drive to stimulate growth.

The spike in poverty on Mr Obama’s watch is a direct result of the recession he inherited but its impact is being felt far beyond the long-term unemployment blackspots of the Midwest — and he is unlikely to escape the blame.

“Everyone wishes the first two or three stimulus Bills had worked better than they did, and everyone agrees they didn’t do enough,” Douglas Besharov of the University of Maryland, a leading census analyst, said. “The Administration underestimated how bad it was, so they thought they had more wriggle room, even as late as this summer. I think they bet wrong.”

The newly indigent are imposing record burdens on charities in most states but are concentrated in areas where the housing and job markets collapsed fastest in 2008. “Detroit has been hardest hit but Florida, California and Nevada have also been hammered with foreclosures, leading to people living in their cars and on the streets,” George Hope of the Salvation Army said.

The charity spent more than $3 billion (£1.95 billion) helping 30 million people last year, with some areas reporting a 400 per cent increase in the number seeking short-term help and a sharp rise to 370,000 in the number requesting drug rehabilitation services. “When people lose their jobs they start grasping for anything to give them a sense of escape, and that turns into addictions,” Major Hope said.

Mr Obama pledged, on taking office, to bring unemployment down to 8 per cent nationally. The new poverty figures are closely linked to last year’s unemployment peak of 10.1 per cent but the jobless rate remains stuck above 9.5 per cent. On Sunday the new chairman of the White House Council of Economic Advisers, Austan Goolsbee, said: “I don’t anticipate it coming down rapidly.”

The new map of American poverty overlaps strikingly with that of Mr Obama’s electoral base, with communities that turned out for him in force in 2008 bearing the brunt of a largely jobless recovery. African-Americans are over-represented among those dependent on welfare payments, food stamps and charitable donations but so are Hispanics who voted Democrat in huge numbers two years ago, often for the first time.

Some of the fastest rises in poverty are expected in heavily immigrant communities such as Modesto in California’s Great Central Valley, and parts of Los Angeles, Las Vegas and Fort Myers in Florida.

Nowhere is immune. Lorain County in northern Ohio already has the distinction of a 25 per cent poverty rate and is part of a swing district in Congress that could reflect a broad trend towards the Republicans in November’s midterm elections. Its local newspaper headlined an editorial on poverty yesterday “A Failure of Leadership”.

The highest poverty level on record in the post-war era was 22.4 per cent in 1959. The most recent set of census figures, from 2008, were based on a poverty line set at an annual income of $22,025 for a family of four.

This year’s data will refocus political attention on the nearly $1 trillion in stimulus spending authorised by Mr Obama since January 2009. Even his admirers admit too much of it was poorly targeted, and too little went on genuine job creation. As Warren Buffett, the investor, has said: “The problem with the stimulus is it was only half Viagra.”