Sunday, November 20, 2011

The Government Is the Only Reason the Poverty Rate Isn't 28.6 Percent

From the always-excellent Center for Budget and Policy Priorities (so excellent that I recently donated to them), we have the following chart, which shows us how high the poverty rate in the U.S. would be, absent any government assistance:

I've discussed in previous posts how badly things are going for the middle class and the poor - and the current news is really bad. For example, the current poverty rate of 15.1-15.5% (depending on how you count) is the highest the poverty rate has been since 1993.

But, the chart (and the accompanying CBPP analysis) show what a critical role the government's safety net programs play in keeping people out of poverty. Without any government safety net programs, the poverty rate would nearly double - to 28.6%. The temporary stimulus increases in the safety net programs have shaved 2.3% off the poverty rate - so when these measures expire (many of which are set to expire next year), we can expect to see the poverty rate rise by 2.3%, all else equal.

This is a successful example of the government working well - keeping people out of poverty. Hip hip hooray! Let's hope these programs aren't gutted in the name of reducing deficits, tossing millions more people into poverty.

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