Poverty in the US

Half the US population feed on the other half 

and the recession has not even begun

Commodity Online
7 October, 2011

Almost half of the entire US population is now dependent on some kind of government aid, as per the Census data of Q1, 2010. The exact figure stands at 48.5%.

And almost 46.4% of households will not be paying any Federal tax in 2011, as per the Tax Policy Center. This is worse than 39.9% in 2007 when the economic collapse began.

Put these two together and you see that almost half the US do not pay any taxes and in turn depend on the taxes paid by the rest half of the productive population who are economically independent

This means that only 50% of the population in the US is capable of living entirely independent of any government aid.

This is in fact a scary situation given that the US economy is projected to slowdown, the joblessness will only increase which means that in the future, more people will be living off the earnings of even lesser economically independent people who pay taxes.

In such a situation, will the US government try to raise taxes those who pay taxes or try and cut down on the benefits provided to its citizens.

Both have economically destabilizing consequences. Raising taxes will inevitably cause reduced consumption from such citizens and may also lead to capital outflows from the US. Whereas cutting on the social benefits stand an increased risk of stirring a social unrest.

Bottom line, the US has to grow and create jobs. Period.

Currently, the unemployment rate still hovers at around 9%, the Obama administration is planning on taxing the rich more, protests against the government and Wall Street is on the rise and prospects of economic growth is anything but depressing.