America’s Descent into Poverty
By Paul Craig Roberts
Clearing House" ----
The United States has collapsed economically, socially,
politically, legally, constitutionally, and environmentally. The
country that exists today is not even a shell of the country
into which I was born. In this article I will deal with
America’s economic collapse. In subsequent articles, I will deal
with other aspects of American collapse.
Economically, America has descended into poverty. As Peter
Edelman says, “Low-wage work is pandemic.” Today in “freedom and
democracy” America, “the world’s only superpower,” one fourth of
the work force is employed in jobs that pay less than $22,000,
the poverty line for a family of four. Some of these lowly-paid
persons are young college graduates, burdened by education
loans, who share housing with three or four others in the same
desperate situation. Other of these persons are single parents
only one medical problem or lost job away from homelessness.
Others might be Ph.D.s teaching at universities as adjunct
professors for $10,000 per year or less. Education is still
touted as the way out of poverty, but increasingly is a path
poverty or into
enlistments into the military services.
Edelman, who studies these issues, reports that 20.5 million
Americans have incomes less than $9,500 per year, which is half
of the poverty definition for a family of three.
There are six million Americans whose only income is food
stamps. That means that there are six million Americans who live
on the streets or under bridges or in the homes of relatives or
friends. Hard-hearted Republicans continue to rail at welfare,
but Edelman says, “basically welfare is gone.”
In my opinion as an economist, the official poverty line is long
out of date. The prospect of three people living on $19,000 per
year is farfetched. Considering the prices of rent, electricity,
water, bread and fast food, one person cannot live in the US on
$6,333.33 per year. In Thailand, perhaps, until the dollar
collapses, it might be done, but not in the US.
As Dan Ariely (Duke University) and Mike Norton (Harvard
University) have shown empirically, 40% of the US population,
the 40% less well off, own 0.3%, that is, three-tenths of one
percent, of America’s personal wealth. Who owns the other 99.7%?
The top 20% have 84% of the country’s wealth. Those Americans in
the third and fourth quintiles--essentially America’s middle
class--have only 15.7% of the nation’s wealth. Such an unequal
distribution of income is unprecedented in the economically
In my day, confronted with such disparity in the distribution of
income and wealth, a disparity that obviously poses a dramatic
problem for economic policy, political stability, and the macro
management of the economy, Democrats would have demanded
corrections, and Republicans would have reluctantly agreed.
But not today. Both political parties whore for money.
The Republicans believe that the suffering of poor Americans is
not helping the rich enough. Paul Ryan and Mitt Romney are
committed to abolishing every program that addresses needs of
what Republicans deride as “useless eaters.”
The “useless eaters” are the working poor and the former middle
class whose jobs were
offshored so that corporate executives could receive
multi-millions of dollars in performance pay compensation and
their shareholders could make millions of dollars on capital
gains. While a handful of executives enjoy yachts and Playboy
playmates, tens of millions of Americans barely get by.
In political propaganda, the “useless eaters” are not merely a
burden on society and the rich. They are leeches who force
honest taxpayers to pay for their many hours of comfortable
leisure enjoying life, watching sports events, and fishing in
trout streams, while they push around their belongings in
grocery baskets or sell their bodies for the next MacDonald
The concentration of wealth and power in the US today is far
beyond anything my graduate economic professors could image in
the 1960s. At four of the world’s best universities that I
attended, the opinion was that competition in the free market
would prevent great disparities in the distribution of income
and wealth. As I was to learn, this belief was based on an
ideology, not on reality.
Congress, acting on this erroneous belief in free market
perfection, deregulated the US economy in order to create a free
market. The immediate consequence was resort to every previous
illegal action to monopolize, to commit financial and other
fraud, to destroy the productive basis of American consumer
incomes, and to redirect income and wealth to the one percent.
The “democratic” Clinton administration, like the Bush and Obama
administrations, was suborned by free market ideology. The
Clinton sell-outs to Big Money essentially abolished Aid to
Families with Dependent Children. But this sell-out of
struggling Americans was not enough to satisfy the Republican
Party. Mitt Romney and Paul Ryan want to cut or abolish every
program that cushions poverty-stricken
Americans from starvation and homelessness.
Republicans claim that the only reason Americans are in need is
because the government uses taxpayers’ money to subsidize
Americans who are unwilling to work. As Republicans see it,
while we hard-workers sacrifice our leisure and time with our
families, the welfare rabble enjoy the leisure that our tax
dollars provide them.
This cock-eyed belief, on top of corporate CEOs maximizing their
incomes by offshoring the middle class jobs of millions of
Americans, has left Americans in poverty and cities, counties,
states, and the federal government without a tax base, resulting
in bankruptcies at the state and local level and massive budget
deficits at the federal level that threaten the value of the
dollar and its role as reserve currency.
The economic destruction of America benefitted the mega-rich
with multi-billions of dollars with which to enjoy life and its
high-priced accompaniments wherever the mega-rich wish.
Meanwhile, away from the French Rivera, Homeland Security is
ammunition to keep dispossessed Americans under control.
Craig Roberts was Assistant Secretary of the Treasury for
Economic Policy and associate editor of the Wall Street Journal.
He was columnist for Business Week, Scripps Howard News Service,
and Creators Syndicate. He has had many university appointments.
His internet columns have attracted a worldwide following.
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