America Has Failed

Posted in: Government

What do you call a nation that cannot feed its people?

According to the most recent report by the Department of Agriculture, more than 37 million people in the United States, including more than 11 million children, did not have access to sufficient food to lead a healthy life. And that was in 2018, well before the pandemic that produced the most severe economic downturn since the Great Depression. Now it is much worse. Feeding America, a network of the nation’s largest hunger-relief organizations, estimated that 54 million people, or one in every six people in the country, including 18 million children—one in four—will go hungry at some point in 2020. Lines at food banks stretch for miles. Conditions in some states are especially dire; the crisis will reach one in four Mississippians and one in three Louisiana children. But there is no such thing as blue hunger or red hunger. In every state in the country, and every county in every state, there are people who cannot secure the food they need to live a healthy life.

What do you call a nation that cannot house its people?

Prior to the pandemic, nearly 21 million renter households—almost half the total—were “cost-burdened,” which meant they spent more than 30% of their household income on rent. Another 11 million renter households—roughly one in four—were forced to devote more than half their household income on rent, which predictably drove them to skimp on other essentials, like food, medical care, and insurance. Among renter households below the poverty line, the numbers are even more frightening. More than half these households spent over 50% of their monthly income on rent, and one in four spent 70 cents of every dollar they earned to fend off eviction. And that was when the economy was good.

Now, by contrast, the nation faces what may become “the most severe housing crisis in its history.” So warns a coalition of scholars and affordable housing advocates, including the National Low Income Housing Coalition, the COVID-19 Eviction Defense Project, the Aspen Institute, and the Eviction Lab at Princeton University. In a paper published earlier this month, the authors predicted that “in the absence of robust and swift intervention,” between 30 and 40 million people could be evicted from their homes by the end of the year. Imagine every man, woman, and child living in Nevada, Arkansas, Mississippi, Kansas, New Mexico, Nebraska, West Virginia, Idaho, Hawaii, New Hampshire, Maine, Montana, Rhode Island, Delaware, South Dakota, North Dakota, Alaska, Vermont, and Wyoming. Now imagine them all kicked out of their homes. That’s 30 million people, the low end of the current estimate.

What do you call a nation that cannot guarantee that its people will have ready access to clean, safe water?

As of 2019, more than 2 million people in this country do not have access to indoor plumbing. Another 44 million are served by water systems that recently had health-based violations of the Safe Drinking Water Act. No less serious is the matter of water affordability. A Boston economist recently completed a comprehensive study of water affordability in this country as of  2018. He examined conditions in 12 cities, ranging from large (Philadelphia) to small (Santa Fe), from south (Austin) to north (Seattle), and from west (San Diego) to Midwest (Cleveland and Indianapolis) to east (Charlotte). His findings were shocking. For the poorest among us, water bills are universally unaffordable. In 11 of the 12 cities, 100 percent—and in the 12th, 99.9 percent—of the population that survived on incomes of less than half the federal poverty level lived in neighborhoods where water bills were unaffordable.

In some cities, the depth of the affordability crisis is hard to fathom. In Cleveland, nearly 90 percent of the poorest residents pay at least 12 percent of their income on water, more than four times the amount that is considered affordable for that income bracket. In New Orleans, it’s even worse. One hundred percent of New Orleans residents struggling to survive on less than half the poverty level pay at least 12 percent of their income on water. Water is so expensive in the Crescent City that for many residents, an income above the poverty level may not be sufficient; over nine in ten New Orleans residents earning 100-150 percent of the poverty level pay between 4 and 7 percent of their income on water. And this was in 2018, when the economy was booming.

What do you call a nation whose policymakers ensure that the wealthy will be protected while the poor will be left out?

Since the pandemic, the Federal Reserve has taken extraordinary steps to support the U.S. economy. Among many other things, it announced that it was prepared to make unlimited purchases of government-backed debt to stabilize financial markets, and to continue those purchases as long as necessary. This comes on top of the $2.3 trillion in liquidity it introduced into the banking system in the form of short term loans. Most observers credit the Fed’s decisive and sustained action with providing a major boost to the financial markets, which have all but recovered from the pandemic. The Nasdaq reached an all-time high weeks ago, and the S & P 500 returned to record levels just last week, making this the shortest bear market in U.S. history. Those whose money is in the market, in other words, have more than fully recovered, at least financially, from the crisis.

But most Americans are not in the market—at least not to a meaningful extent. Most surveys find that a bit more than half of all Americans have at least some direct or indirect exposure to the stock market, meaning they own shares in personal accounts or through things like employer-funded pension or retirement plans. Yet this number vastly overstates the extent to which most Americans benefit from a booming market. In this as in most things, wealth rules. Eighty-four percent of all stocks owned by Americans are held by the wealthiest ten percent of American households. The poorest half of Americans—roughly 160 million people—own virtually no stocks or bonds. They simply do not have enough disposable income to become investors.

The stock market is booming, but as Janet Yellen, the former chair of the Federal Reserve recently said, “[t]he stock market isn’t the economy.” While the rich have more than recouped their losses, the poor continue to suffer. “Individuals and businesses are not going to make it through this unless they get grants, and only the federal government can do that.” But the federal government apparently won’t; Congress has left town, and most federal support has expired.

So what do you call a nation that cannot feed, house, and provide water for its poor, but can somehow manage to find the tools to support and enrich its wealthy?

You call it a failure.

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