Saturday, September 18, 2010

Obama increases poverty (and the poverty rate-- a separate matter) and then takes credit for lowering it

From the AP (hat tip: C-J)...

First, the title of the piece-- "1 in 7 live in poverty"-- is misleading or oft-misunderstood. (You may have seen a different title in your newspaper.) We think of "live in poverty" as living with a certain material standard of living. But the Census Bureau ignores all sorts of resources in its measurement of poverty (non-cash transfers from the govt; unreported income; dipping into savings). Because of this, the poverty rate is a far better measure of dependence on govt (an important non-material form of poverty).

The ranks of the working-age poor climbed to the highest level since the 1960s as the recession threw millions of people out of work last year, leaving one in seven Americans in poverty. The overall poverty rate climbed to 14.3%, or 43.6 million people [in 2009]...from 13.2%, or 39.8 million people, in 2008...

In a statement, President Barack Obama called 2009 a tough year for working families but said it could have been worse. "Because of the Recovery Act and many other programs providing tax relief and income support to a majority of working families — and especially those most in need — millions of Americans were kept out of poverty last year," Obama said....

True, but you put far more people into poverty. You've pounded the economy with bad economic policies, paralleling those of your predecessor (and going well beyond that). And by the definition of the Census Bureau, you've extended poverty since more people getting help from the govt will result in (and increase) the poverty rate.

David Johnson, the chief of the Census Bureau's household economics division, estimated that expanded unemployment benefits helped keep 3.3 million people out of poverty last year.

Nice job with the static analysis: Take what happened and subtract UI from their income, ignoring the negative incentives for getting re-employed and the negative macroeconomic impact of subsidizing unemployment.

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