The Exploding Poverty & Food Stamp Crises

Poverty: The Census Bureau reported this week that 50 million Americans, roughly one in six – almost 17% – are living below the poverty line, which is defined as earnings of less than $23,021 a year for a family of four. Think about that – a family of four living on less than $2,000 per month.

The latest poverty figures are the worst since the 1960s when President Lyndon Johnson launched the so-called “War On Poverty” campaign, which failed miserably. You may recall that President Obama’s $800+ billion stimulus package – the American Recovery and Reinvestment Act – enacted in early 2009 was hailed as a powerful anti-poverty measure, among other things. Yet the US poverty rate is now at the highest level in a half century.  

According to the Census data, over 20% of our nation’s children are living in poverty, and it may even be worse. According to one recent study, only Romania has a higher child poverty rate than the US among developed nations, as shown in the table below.


The United States is considered the richest, most economically competitive country on the planet. So how is it possible that it has the second highest rate of child poverty in the developed world? The answer, as you might expect, would take volumes to explain. However, I think it is safe to say that our current economic and fiscal policies aren’t helping, but it’s more complicated than that.

Food Stamps: The number of Americans who are enrolled in the Supplemental Nutrition Assistance Program (SNAP) has increased by 70% since 2008 to 47.8 million as of December 2012, according to recently published figures.

This means nearly 50 million people – over 19% of the American population – are receiving food stamps, which is almost double the rate of 1975. Last year, the US government spent a record$74.6 billion on the program, this according to the Department of Agriculture which administers the food stamp program.


Even though the economy has been creating net new jobs each month for the last few years, the number of enrollees in the SNAP program continues to grow. Currently, three out of every four households benefiting from the SNAP have at least one member who is working.

Again, how can this be happening in America? At least part of the reason is the Great Recession. You can see in the chart above that the explosion in the food stamps program began in 2008. But as I noted above in the poverty discussion, the real reason for record high food stamps is much more complicated than most Americans realize.

Conclusions: It is unthinkable and unforgivable that poverty in the US has grown to the point that only Romania has a worse standing than America among developed nations. Likewise, it is equally unacceptable that nearly 20% of US families are dependent on food stamps. Worse yet, both of these trends are on the rise and little is being done to reverse them.

I apologize for bringing up two very alarming and controversial topics – poverty and food stamps, both of which are exploding – in the Blog without space to go into more detail about each.  I will address them more thoroughly in upcoming issues of my weekly E-Letter.

For now, just ponder the possibility that these trends and others may not be random occurrences.

Have a great weekend everyone!

Posted 04-04-2013 2:59 PM by Gary D. Halbert