ARTICLE ANALYSIS
The article gives a detailed picture of the level of poverty in the United States. It depicts that almost ninety eight million (97.3) Americans fall in the category where they earn low income. These are in the category of earning from one hundred to two hundred (100-200) percentage of the poverty level. An extra forty nine million find themselves in the category of low-income earners. This gives one hundred and forty six (146.4) million, which is equivalent to forty-eight percent of the total American population. The figure has risen by four million in duration of three years. In the compiling of the data, the census took into consideration commuting, medical and other extra living costs.
The increase in poverty levels has been because of increased living costs, high unemployment levels, and government safety frays. The middle class number is shrinking and because its wages are not increased and are still stagnating. Safety net programs like tax credits and food stamps have caused the increase in poverty.
Congress is also in the forefront of adding more cuts to what the Americans are receiving. They are still advocating for addition of more cuts. The safety net programs being introduced have been of help to many Americans. This has however not turned well with the middle income. The middle-income earners have been turned into low-income earners because the income they get all goes to these cuts. Their ability to spend has been extremely reduced. Mayors have given out data that one person in four people find themselves in need of food aid which they did not receive. Pay cuts have made the middle-income earners drop into low-income earners, which is a threshold of about $45000 and a family of four. The reduction in the amount of income earned is because of the spouse losing their jobs, the government policies causing a reduction in the working hours and pay cuts. The meager income they earn is consumed by the children support and housing costs.
Because of recession, many people have been left jobless causing a significant down fall for income they get. The programs been introduced push these people to an extent of spending everything they have thus they do not promote self-sufficiency.
The recession has caused the percentages of the low-income families to rise for three consecutive years reaching a percentage of 31.2%. 31.2% is equivalent to about ten million Americans (10.2). The proportion is regarded as highest ever since 2002 when it was 27%.
The population of the retired people that is living below the poverty line of America is increasing. This is attributed by the fact that the retirees are using most of their savings and lack no other income to sustain them. According to studies carried out by EBRI, since the year 2005, the poverty rates of the retired have risen by 1.5% from 7.7% to 9.5% as by the year 2009. For those of age 75-84, the poverty increase was even steeper from 7.5 to 10.8% in the same duration. The oldest senior citizens (above 85 years) were the ones most affected with a percentage of 14.6%. The factor that attributes to the increase in poverty levels for these retirees is the failing health of the population and the costs that are attributed to managing the health conditions. EBRI research reveals that over 70% of the poor have suffered chronic diseases like cancer, heart problems, arthritis, stroke, and diabetes. Ninety-six (96%) percent of the population in poverty has some issues with their health condition. Their old age and deteriorating health makes them move into nursing homes for receive better care. The nursing homes charge a lot and the ones who go to these homes lose their items very fast. Economic recessions also play a great deal in improving the poverty levels of the retirees. With time and the increasing cost of living, the retirees’ savings are quickly depleted. They however have no income to add to whatever they have spent.
The Keynesian theory closely relates to this situation facing the Americans. Currently America is in times of high inflation and high unemployment. Thus as the Keynesian theory explains the government should put measures that help to fight these negative effects. It goes ahead and explains that during the times when the economy is stable, the government should increase the taxation rates and reduce its spending for constant economic growth. During the hard economic times, the government should go ahead and reduce the taxation rates while at the same time increasing the government expenditure. By reducing, the government spending and increasing the taxation at stable economic times the government ensures that it curbs the inflation rates in the economy (Asimakopulos, 2001). People are thus able to keep more of what they earn and job opportunities are created through the government spending.
In the article, since the recession the government has not loosened the tax rates of its citizens. This thus depicts that even at hard times the government holds tax rates on its citizens that are very expensive and that they are not changed depending on the economic times. This move has helped to plummet the rates of poverty in the country. As regarding to the taxation of wages, it should be advocated that people get taxed according to the amount of wages they receive. The higher the wages the higher the tax they should pay. For the ones earning minimum wages they should be taxed at lower rates than the previous ones. This should help reduce the margin existing between the poor and the rich. Government spending has also not been improved resulting in no creation of job opportunities. Ensuring that inflation is curbed will help reduce the costs of living in the country.
For the senior citizens, the government should definitely intervene. The congress should formulate policies to ensure sustainability of the senior citizens. This is according to the polls that the poverty level among the retirees has risen over the last few years. As regarding the nursing homes, the prices these people are charged should be made reasonable as the retirees are not earning any cash. This would help in ensuring that their savings last long enough to keep them for longer durations. Policies should be passed which advocate that the government pay a portion of what the retirees ought to pay.
When these government measures are taken into consideration and acted upon, economic stability will be a guarantee and with stability, it will help fight the poverty that is slowly creeping in the country.
References
Press, a. (2012, July 28). Nearly Half of Americans Are Poor or Low-Income. US news weekly , p. 23.
Asimakopulos, A. (2001). Keynes's General theory and accumulation. Cambridge [u.a.: Cambridge Univ. Press.
