"but this clearly is a middle class recession because of the credit and foreclosure crisis"

Many times on this blog I've pointed out the fact that if you want smaller government, then you need a thriving and growing middle class that perceives itself to be middle class, and not just one misstep or accident above being truly needy. Otherwise, the middle class will favor large government until the end of time. Often, people try and tell the middle class that the numbers show them to be better off than they think that they are, or people are worse off elsewhere. The answer is something like "F--- Off". In the real world, such arguments are considered justifications for inequality by the better off, or, better yet, rationalizations. As well, I've posted about psychological and social research that people, by that I mean actual human beings, perceive their situation in relation to the situation of others in their society. That's why they say "F--- Off" when economists tell them to accept recessions as a cleansing enema for the economy. The middle class at least agree with the enema part.

With that in mind, from Reuters:

"In recession, poverty strikes middle class

Fri Jan 16, 2009 12:43pm EST

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By Lucia Mutikani

WASHINGTON (Reuters) - Chaun Frost ran up her credit cards when the U.S. economy was booming, and now the single mother is paying a heavy price.

To service her debt and buy food for her two children, she has taken a second job selling pizza on weekends and some week nights, supplementing the $2,200 a month she earns from her job coordinating volunteers at a children's hospital.

"We have been hurt by the current state that the economy is in," said Frost, 32. "I am part of the new working poor( THIS IS WHAT I MEAN )."

About 37.3 million Americans were living in poverty in 2007, or about 12.5 percent of the population, according to the government, which defines poverty as an annual income of $21,203 or less for a family of four.

Figures due out in August will show that rose by about half a percentage point last year, analysts estimate, and more and more people like Frost will slip into poverty this year as the recession takes hold.( FOR SURE )

In many ways, Frost is typical of the many middle class people in the current recession who are falling into poverty. ( YES )

Many of the decisions she made seemed smart at the time( THIS IS IMPORTANT TO UNDERSTAND. WE ALL TAKE SOME RISKS. NOT ALL DECISIONS TO USE CREDIT ARE ASININE BY DEFINITION. ). Some of her many debts were accumulated as student loans. She also makes monthly payments for a big car whose value is now less than the amount she owes on it.

Repayments on the car and insurance bills are almost as much as the $850 rent for the modestly furnished two-bedroom apartment she shares with her 11-year-old son and a 9-year-old daughter in Washington.

In a move she knows could spell trouble for the future, she has slashed her retirement contributions ( WORKING LONGER LEADS TO MORE GOVERNMENT. SORRY CASEY. PEOPLE DON'T FANCY IT WHEN IT'S FORCED. )to $5 per check from $100, partly in response to a drop in the stock market.

And, underneath it all is the economic downturn, which has exacerbated her problems and shattered her financial self-confidence( THIS IS THE REAL PROBLEM. HOW REAL PEOPLE REACT AS INDIVIDUAL HUMAN AGENTS. ).

"Had I known that things would turn out this bad, I would have done things differently( THAT'S MY WHOLE LIFE LOVE )," Frost said.

UNEMPLOYMENT FUELING POVERTY

The worst financial crisis since the Great Depression of the 1930s, ignited by the collapse of the U.S. housing market, has sent the U.S. economy into a downward spiral.( A CALLING RUN ( DEBT-DEFLATIONARY SPIRAL ) FOLLOWED BY A PROACTIVITY RUN. )

Government data shows the unemployment rate jumped to 7.2 percent in December, the highest in nearly 16 years, as companies cut jobs( PROACTIVELY, IN ORDER TO GET AHEAD OF THE CURVE. ) to cope with a shrinking economy.

"My guess is poverty is going to go up from around 12.5 percent now by about half percentage point to 13 percent," said Rebecca Blank, a senior fellow at the Brookings Institution in Washington. "The main driving factor is rising unemployment."

Among those out of work is Shirley, 55, who has been living off a $195 weekly unemployment check since September.

"I never remember things being this bad( THE INCREDIBLE FEAR AND AVERSION TO RISK. )," she said. She declined to give her last name because she is in a legal battle with a bank over disconnected electricity at the apartment building in Washington where she lives.

"This is the longest I have been unemployed," she said.( I'M SURE SHE'S A CANDIDATE FOR WANTING LESS GOVERNMENT. )

With the economy not expected to recover before the second half of 2009 and the jobless rate forecast to top 9 percent by the end of the year, analysts said the number of people living in poverty is set to increase.( VERY BAD NEWS )

"How many more people fall into poverty as this recession continues depends on what policy choices are made( I AGREE 100% )," said Lisa Donner, Executive Director of the Half in Ten Campaign, an organization focusing on poverty in the U.S. capital.

MOVING POVERTY LINE

The Center on Budget and Policy Priorities, a private think tank, estimates that if unemployment reaches 9 percent, 7.5 to 10.3 million more people could fall below the federal poverty line.

The Congressional Budget Office has estimated that government spending on food stamps will rise to $50 billion this year from $39 billion in 2008, another sign that more Americans are struggling.( HURTING MATE )

Around the country, charity groups have reported an increase in the number of people using their services.( THIS IS IMPORTANT AS WELL )

"We have seen an increase of about 10 to 20 percent in people seeking help with groceries. They are from all racial groups, and about four fifths of them earn incomes below the federal poverty line," said food coordinator Jenette Chance of Bread for the City in Washington.

Some experts criticize government poverty measures( IT'S ONLY USE IS THAT IT MAKES GIVING BENEFITS OUT EASIER ), arguing that the methodology was developed in the mid-1960s and has had no major revisions, except to make adjustments for inflation.

Instead, they propose a poverty measure that takes into account variables such as taxes paid and credits received, medical expenses and work-related expenses.( GETTING THIS INFO IS MORE COSTLY AND TIME CONSUMING, AND CONSTANTLY NEEDS ADJUSTING. ERGO, GOVERNMENT HATES IT. )

"The official measure( ALL GOVERNMENT STATS ARE OF VERY LIMITED USE, PRECISELY BECAUSE THEY'RE MAINLY USEFUL FOR GOVERNMENT EASE. ) very much understates the number of people or households having a very tough time," said Ann Chih Lin a public policy and political science professor at the University of Michigan.

The collapse of the U.S. housing market means many middle class people are either living in poverty or are one pay check away from hard times( THIS IS WHAT I'VE BEEN SAYING ), she said.

"Recessions normally hit the people who are the poorest harder, but this clearly is a middle class recession because of the credit and foreclosure crisis( BINGO! )," said Lin.

President-elect Barack Obama is pushing for the swift passage of a spending package to promote economic recovery.

For Frost, anything would be better than the status quo( GOD YES ).

"I guess we all are looking for miracles( WE HAVE TO LOVE. ) and some good leadership for the good of the economy," she said. "When you look at who is in the unemployment benefits line, the food line, it's a lot of people who were middle class( BINGO! )."

(Reporting by Lucia Mutikani; Editing by Eddie Evans)"

If you truly want less government someday, then you are going to have to deal with this problem. In the short term, we need a strong and vibrant social safety net. In the long term, we need to compromise politically to develop a strong and vibrant middle class who feel comfortable forswearing government aid. In lieu of that, just keep braying about government being the problem. We need wankers like you for amusement in times like these.