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The benefit to millions of people for not working has risen dramatically during Obama’s Great Recession. Staying home and collecting a government check has never been so appealing.
The picture of a desperate, straggling army of jobless poor—magnified by the lefty news media– is a distortion of reality. The benefit of not working increased from $10,000 to $15,000 a year for millions of Americans. Moreover, it unquestionably actually increased joblessness, the major political football of 2012.
Of course, some Americans are needy. Many are searching honestly for work. The monthly unemployment insurance payment on average was $864 in 2006. It jumped to $2,667, however, in 2010, economist Kevin Hassett writes. On an annual basis that would be over $32,000. That’s more money than the average annual pay for a barber, a fast-food supervisor, a teacher’s assistant, a security guard, a library technician, a nurse’s aide, a veterinarian assistant, a parking lot attendant, a home health aide, a floral designer, a diet technician, a bartender, a sports referee or umpire, and dozens of other occupations, according to the Bureau of Labor Statistics pay data.
The number of Americans in “poverty” (as defined by the government) in 2010 was 46 million. The official national poverty rate for 2010—the most recent figure—was 15 percent, according to the U.S. Census Bureau. Since 2007, the safety net for the financially needy has “expanded radically,” as Kevin Hassett, puts it. Hassett is a senior fellow and director of economic policy studies at the American Enterprise Institute. Hassett quotes Casey E. Mulligan, economics professor at University of Chicago as saying the percentage of the country’s population in poverty rose by only 0.6 percent from 2007 to 2010. Amazing, considering the hard-times economy.
Spending outlays to help the poor expanded not only because of the long economic rough patch but because the requirements for eligibility expanded so generously for most programs. Those in need can’t say they have been given short shrift when spending per person, not just total spending has increased so dramatically. Professor Mulligan developed a chart showing the average amount of assistance per unemployed or under-employed from 2006 to 2010 for individuals under age 65. It’s extensive.
The chart includes consumer loan charge-offs (of credit cards, mortgages or other debts), home retention actions (which seek to help keep borrowers in their homes while mitigating risk for banks. One type of home retention action is loan modification, in which servicers modify one or more mortgage terms. Another type is a payment plan. In this case, no terms are contractually modified, but borrowers are given time to catch up on missed payments (or are allowed to show they can meet amended terms); other government transfers, such as Supplemental Security Income, which pays limited-income people who are disabled or blind, and food stamps, plus the Child and Adult Care Program, which makes reimbursements for meals in day-care facilities.
As recently as last fall, Obama was offering mortgage relief to hundreds of thousands, following up on his previous failed foreclosure relief proposals.
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