America’s Descent into Poverty ~ Paul Craig Roberts
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 into 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In my opinion as an economist, the official poverty line is long out
of date.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
developed world.
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 burger.
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 collecting sufficient ammunition to keep dispossessed Americans under control.
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