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Poverty is rising and visible on US streets

Land of the free, home of the brave, is how the Star Spangled Banner, the national anthem of the US, describes the country it sings over. After travelling for four weeks through its north-eastern cities it is clear that while some may be brave, many are a long financial way from being free.

Pittsburgh is a picturesque city set at the fork of the Allegheny and Monongahela rivers and is a fitting place to get a feel for the American dream. It boasts clean cities, beautiful suburbs, high-rise buildings plated in glass and world-class conference facilities.

But even here I am surprised to have to walk through the sleeping bags of the homeless on the pavement outside a church. In Chicago a kind elderly gentleman asks me the time as a way of opening conversation before asking if I might have a dollar to help him get into the night shelter.

While in New York a subway station that I used daily echoed with the words of a man seated at the end of the platform; “God bless, please help, I’m hungry”.

His image of hunger was very different to the one we are accustomed to in South Africa. He was severely overweight and needed help to stand as his begging shift came to an end.

Thirty-five percent of Americans are obese and for most it is not a sign of opulence but rather of poverty. A 1.3kg bag of apples costs between $3 (R26.30) and $4 and a 900g bag of carrots sells for about $1.50. A McDonald’s burger however, can be picked up immediately for just $1 plus tax.

In the Bronx a Grade 1 teacher sits and talks about the challenges of her job. Her main concern is that two-thirds of her students spend the night in shelters. They are forced to exit by 6am and frequently arrive at school having not had enough rest to function properly throughout the day.

It is no surprise that job creation formed such a pivotal part of the $6 billion (R53bn) 2012 election campaign. Unemployment this year has been reported at 7.9 percent, double what it was in 2007.

Studies have shown the longer a person is unemployed the harder it becomes for them to get a job with a significant decrease in opportunity occurring after 27 weeks of unemployment. The US Department of Labour reports that the median average for duration of unemployment is 19.7 weeks and more than 5 million people have not had jobs in more than 27 weeks.

Sunday was Veteran’s Day in the US. The National Football League designated 32 of their Sunday games as a salute to those who had served in the military and for every point scored they donated $100 to non-profit organisations that support veterans. These organisations are funded through charity and help returning soldiers to reintegrate into society, often with a focus on education and job-seeking.

While private donors rally support to help veterans, the US government designated $711bn of their 2012 budget to the military. Only $313bn more and it would equate to the military spend of the rest of the world combined.

The US suffers from perverse misallocation of spending. People speak gleefully abut “the Clinton years” as a time when they could spend recklessly and indeed it was a period when the US could look beyond their borders.

But the tables have turned. With poverty reported at 15 percent, and visible in the streets, President Barack Obama’s administration will need to change its strategies to support the nation from within, or watch as it slowly implodes.

Pierre Heistein is the convener of UCT’s Applied Economics for Smart Decision-Making course

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