A New Way to Read Numbers

Too often, we think of poverty in America in terms of what it costs the states and federal government in Food Stamp payments, Medicaid benefits, subsidized housing, etc. generally lumped together and described as "welfare" costs. There is a common myth, effectively exploited by many politicians,  that American taxpayers are taken advantage of by those who refuse to do their share.  This gives the pretext of rationality to the actions of some of our elected officials when they opt out of Medicaid, or support cuts to food stamps, and childhood nutrition programs.

But there is a very important point we are all missing if we continue to subscribe to this myopic, manipulative gospel about the government's proper role in aiding the economically disadvantaged.
A Canadian money manager was looking at poverty conditions in the Province of Ontario, Canada.
He decided to quantify the cost of poverty. He came up with some interesting...and staggering numbers. His conclusion? Poverty was costing the province of Ontario roughly $38 billion annually.
He assigned a dollar amount to the increased  demand for healthcare, the loss of revenue from people not in the workforce, paying taxes and contributing to the local economy, and most disturbing, the consequences and the impact on early childhood development and educational performance.
We need to get our elected officials to start looking at the costs, in real dollars, of poverty in America.
More at the link:http://www.thestar.com/news/gta/2013/04/17/poverty_costs_us_billions_fiorito.html

A "Selective Recovery"

U.S. Census data announced last week, and analyzed by the Brookings Institute's William H Frey, confirms what many American workers are experiencing: economic gains since the so-called recovery began in 2009, are "halting and uneven."  Here are some of the findings  included in an article  by AP reporter, Hope Yen:

• In 2012, 46.5 million Americans lived in poverty, unchanged from 2011.
• In 2012, 13.6% of all U.S. households received Food Stamps. The highest level on record. 
• In 2012, 44% of all Food Stamps households had one or more persons with disabilities.
• In Mississippi, 1  out of 3 kids live in poverty, but California has the highest number of children living in poverty with 2.2 million kids.
• Home ownership declined for the 5th straight year in a row to 63.9%.
• Households earning less than $25,000 now make up 24% of all U.S.  households
• Households earning between $50,000 - $100,000 slipped from 31.2% to 29.9%.

source article at link:
http://news.yahoo.com/census-no-sign-economic-rebound-many-us-040228468.html

Inequality for All

   Robert Reich's  very important documentary opens on September 27th. If it isn't showing in your area, this website will tell you where it will be screening, or how to host a screening of  your own.

inequalityforall.com

Losing Ground

photo taken by Mandi Wright, Detroit Free Press

Losing Ground

A recent Detroit Free Press article, quoting figures from the U.S. Census bureau, tells us that 23% of all Michigan households live on retirement income.  As the U. S. economy limps along with it's "jobless recovery," Michigan still remains among the hardest hit of all states. On July 18, 2013, Detroit, Michigan's largest city, became the largest U.S. city to ever file for Chapter 9 bankruptcy. As the bankruptcy proceedings make their way through Federal court in downtown Detroit, at the top of the list of issues they are grappling with is proposed cuts to public employee pensions. 

The Emergency Manager in Detroit draws the distinction that he is "only" proposing to cut the amount of money the City owes the two retiree pension funds by offering them .10 cents on the dollar. (Which will result in cutting pensions.) This is the same amount he proposes to give "other creditors" like the banks, who are insured, and the bond holders, who are also insured. ERISA, which offers some protection for private pensions, does not cover public employees. Unfortunately, the only protection public employees in Michigan have, is language in the state constitution which the Emergency Manager claims is voided by a federal bankruptcy filing.

(The Republican governor of Michigan targeted public employee pensions for an income tax increase, shortly after taking office in 2010, and his Republican controlled legislature approved this very specific tax increase on public employee pensions.) 

There's a legitimate question whether the state had the legal authority to appoint an Emergency Manager, and whether the EM took legally appropriate action in filing for bankruptcy. For instance, has the EM sufficiently proved, as the law requires, that the solvency of the city is at immediate risk and bankruptcy is the only remedy? Legal questions also remain as to whether the Emergency Manager bargained with creditors in good faith, another requirement prior to a Chapter 9 filing. These issues and others have yet to be determined.

Meanwhile, according the procedures set forth in Chapter 9 municipal filings, committees of various creditor groups have been established, mediators have been appointed, and negotiations have begun. A Chapter 9 filing acts as injunctive relief from individual lawsuits by creditors, but unlike Chapter 7 & 11, a judge cannot force a settlement. He can facilitate one, he can mediate, and he has final approval on a plan of adjustment agreed to by the various parties and submitted by the Emergency Manager. 

We will be monitoring these proceedings very closely and will keep readers informed. Why? because pensions are at risk, and because there are nearly 600,000 public employees in Michigan, nearly 800,000 in Illinois, and close to 2.3 million in California. These states are also grappling with underfunded public pension issues. Stay tuned.