Steve Chiotakis: The latest Census data show more than 46 million Americans — a record — officially live below the poverty level. Median income fell more than 2 percent last year to levels lower than 1997. Discouraging numbers at a time when President Obama and Republican lawmakers haggle over what to do to kick start this economy.
Ron Haskins co-directs the Center on Children and Families at the Brookings Institution in Washington, he’s with us now. Good morning, sir.
Ron Haskins: Good morning.
Chiotakis: Why does it seem like we keep going backwards?
Haskins: We have a bad economy — we have a lousy economy. The numbers could not be much worse, and they haven’t been much worse for many, many years — especially children’s poverty, which is what I follow the most closely. So it’s a gloomy picture.
Chiotakis: Obviously this is a job market problem, but is it the fact that Americans are unemployed or that they’re underemployed? I mean, what’s going on here?
Haskins: I think there’re two things. Unemployment’s important, but long-term unemployment, which is very, very high — the highest it’s been — is even more important, because when you’re unemployed for a long time, you spend down your resources. So that’s part of the problem.
The other problem is that fewer Americans work now than in the past. It isn’t just — you can’t capture this by unemployment because the people who are discouraged and drop out of the labor force don’t show up in the unemployment numbers.
Chiotakis: What do we do to break this?
Haskins: Well there are two general ideas. One is stimulus. We can’t say stimulus anymore, because it’s so unpopular, but stimulus. The Keynesian solution — governments spend more money and that’ll stimulate the economy. The first one did have some positive impacts, but let’s face it — it didn’t end the recession by any means. And the other one is to increase certainty. This is something that Republicans are talking about a lot now lately, in the last several months. And that is that we should do something about our deficit, get it under control, and we should improve our tax code, and then we should stop talking about increasing taxes. And that would have a very positive impact on businesses, they would invest more, that means there’d be more jobs. It’s not that kind of thing that scientists can say, “You know, we dial this up and it’s going to work.” But I think there’s some truth in both of them. But I think what we really lack now is stability and confidence for the future.
Chiotakis: Ron Haskins from the Brookings Institution. Ron, thank you.
Haskins: You’re welcome.
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