Sunday seems to be the day for human interest stories about how difficult it is for families to make ends meet during the recession. Coming on the heels of last week's Labor Department study that 15% of Americans now live below the poverty line, it's not surprising. However, an article in the New York Times challenges this notion and challenges the methodology behind calculating the poverty line in the U.S.
While the Times spends two pages splitting hairs about what constitutes poverty or not, the conservative estimate is that 4.6 million more people have slipped below the poverty line since 2006. The new study highlights that another 44 million people live between 100 - 130% of the poverty line, or another 15% of the population. That's about 30% of the total population who are one bad break away from homelessnees or hunger, if they are not there already.
Something's got to give. I'm not a Marxist, but there is only so much poverty or near poverty that a consumer spending economy can take before there are no buyers left. Fewer buyers... fewer manufacturers... fewer jobs... fewer buyers... downward spiral.
It's time for a good ol' Keynesian intervention right now. I'm afraid I'm going to be telling my grandchildren about what it was like to live in the 2010's, but I can't afford to have kids anytime soon. I'm only 3 of those buggers away from the line myself.