The U.S. Is Now a ‘Third World’ Country

4.3% of Americans Survive on Less than $2/Day — 

That’s Considered Poor in Even the Poorest Lands

Eric Zuesse

Slightly more than one American household with children in every 25 is surviving on less than $2 per day of income from all sources. One quarter of that 4.3% (that’s 1% of all Americans with children) receive less than $1.25 per day. One third (that’s about 1.33% of all Americans) receive between $1.25 and $2. Another third of that 4.3% receive enough government benefits to be living on between $1.25 and $2 a day. A tiny 0.1% of that 4.3% are even surviving somehow on “Negative income & benefits.”

On 26 August 2014, the co-authors of a Brookings Institution paper published a chart of those findings (reproduced here below, courtesy of the Brookings Institution) that looks like it might be some painting at the Museum of Modern Art, though what it refers to isn’t nearly so pretty, and is actually quite miserable:

These findings were originally published in the June 2013 Social Science Review, but have not yet been reported in the mainstream press. That study’s co-authors are H. Luke Shaefer of the University of Michigan, and Kathryn Endin of Harvard. The study was posted online by its funding organization, the National Poverty Center.

Titled, “Rising Extreme Poverty in the United States and the Response of Federal Means-Tested Transfer Programs,” the researchers reported that there has been “an increase in the prevalence of extreme poverty among U.S. households with children between 1996 and 2011.” Furthermore, “The prevalence of extreme poverty has risen sharply since 1996, particularly among those most impacted by the 1996 welfare reform,” which was signed into law by President Bill Clinton and which embodied numerous elements of President Ronald Reagan’s views on poverty. It “replaced a need-based entitlement program, Aid to Families with Dependent Children (AFDC), with a more restrictive federal block grant program called Temporary Assistance for Needy Families (TANF).” The authors explain as follows the $2/day cutoff they’re focusing on:

The measure of “extreme poverty” used here is based on one of the World Bank’s key indicators of global poverty: $2 per person, per day. Tellingly, the World Bank does not release official estimates for the United States for this metric because it is meant to capture poverty based on “the standards of the poorest countries.” … Living below this metric is widely considered to be a marker of extreme destitution, which is assumed to be very uncommon among wealthy nations.

They further explain:

Households are counted as being in extreme poverty if they report $2 dollars or less per person, per day in total household income in a given month (approximated as $60 per person, per month in 2011 dollars). … The official poverty line for a family of three would equate to roughly $17.00 per person, per day, averaged over a year, so our measure is roughly 13 percent of the official poverty line.

In other words: whereas 4.3% of Americans survive on less than $2/day, many other Americans are also in poverty but are not in the category that is considered as being extreme poverty even in underdeveloped countries; i.e., as being those countries’ poorest residents.

Their Conclusion opens by saying:

As of mid-2011, about 1.65 million households with about 3.55 million children were surviving on $2 or less in cash income per person per day in a given month. … Households in extreme poverty constituted 4.3 percent of all non-elderly households with children. The prevalence of extreme poverty rose sharply between 1996 and 2011, with the highest growth rates found among groups most affected by the 1996 welfare reform. 

The authors admit, however:

The descriptive analyses presented here cannot clarify the exact causal mechanisms that have led to such a sharp uptick in extreme poverty in the U.S.

Nonetheless, the final sentence of their report is entirely unhedged:

It would be wrong to conclude that the U.S. safety net is strong, or even adequate, when the number and proportion of households with children surviving on less than $2 per day has risen so dramatically over the past 15 years, even after accounting for means-tested transfers. 

This is the first study that explores the United States as a country heading to be an underdeveloped nation from the standpoint even of the direst definition of what constitutes “poverty” —  which is to say, the poorest people in the poorest countries.

President Barack Obama is a strong supporter of the 1996 welfare reform law, and he wants to cut still farther back on “entitlements,” though the entire bottom 20% of Americans have been losing under his Presidency, and only the top 1% of Americans have actually been gaining during his ‘economic recovery’ from Bush’s 2008 crash.

Of course, Bill Clinton didn’t give us only  welfare reform, but also deregulation of Wall Street so that financial services could expand enormously as a percentage of the U.S. economy, and he also gave us NAFTA so that manufacturing could shrink sharply as a percentage of the American economy (there has thus been a strong shift from manufacturing into financial services, basically just into the costs of wealth-transfers); and he also continued the harassing-out of gays from the military, though he said he wouldn’t do that. In addition, he gave us lots of other liberal rhetoric and conservative performance, just like President Obama does. The Democratic Party never renounced either one of them; so (unless Democrats in the House now come forth with a bill to impeach President Obama), those policies are unquestionably Democratic policies, and not merely Republican ones; these policies are bipartisan.

Under such a circumstance, one can only wonder what motivation there would even be for a non-Republican voter to go to the polls and vote this coming November 4th Election Day, which all forecasts say will almost certainly produce two Republican-controlled houses of Congress instead of the current just one Republican house. Apparently, Democrats in Congress want to associate themselves with those policies: these policies are Democratic as well as Republican, and congressional Democrats aren’t renouncing them (which they now can do in only one way: by introducing a bill to impeach Obama, thereby separating themselves from him — from a very unpopular president).

Unfortunately, however, any vote for a third party in America can only be a vote of protest; so, those are the only two practical electoral ‘choices.’

Consequently, America is not only descending into Third-World status, but also, apparently, into the status of being a virtual dictatorship. The bipartisanship in American politics has been descending this country into dictatorship and has also been spreading poverty. Voters have no real  choice remaining, under those conditions. And no Democrat in Congress is determined to change that, which any House Democrat can do simply by introducing the bill of impeachment against Obama.

If they are all cowards, then what are they even there for? To pick up paychecks? For doing what? They won’t be able to do anything if the conservative Barack Obama ends up spending his final two years in office signing into law bills that have passed both houses of Congress and both houses are controlled by Republicans. Maybe this was the plan all along (at least Obama’s plan), but any congressional Democrat who wants to remain in Congress under such conditions wouldn’t be worth voting for — he’d just be a lobbyist-in-waiting, like the Republicans in Congress are. Ralph Nader’s “Tweedledom, Tweedledee” would then become true. Whether or not it was in 2000, it would be in 2014. And that would be the case even though the actual electorates in the two political Parties are worlds apart on their values, and congressional Republicans have been delivering lots to their voters, whereas congressional Democrats have delivering almost nothing to theirs. So, this would mean that there are just two parties, both conservative, but one (Republicans) being conservatives who play the role of “the bad cop,” and the other being conservatives who play the role of “the good cop.” Progressivism in America would then be dead; it wouldn’t even be an option, not a viable one in this country, which then would be a conservative dictatorship — that’s fascism.


Investigative historian Eric Zuesse is the author, most recently, of  They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010,  and of  CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

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  • ICFubar

    Ugly stats, but not surprising as Britain has published health stats showing a growing number of patients are being admitted to hospital for treatment of symptoms of starvation/malnutrition.

    Nice to see Zuesse has figured what electoral politics is all about in America as per the last paragraph of this great article exposing human sufferings in America (the richest nation on earth).

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  • human

    “…descending into Third-World status…”

    Eric, why do you continue to use future tense when this data clearly describes the present?

  • Demonocracy

    I don’t even understand why the call them “conservatives”, what is it that they actually conserve?

    And why do we still celebrate Labor Day? They have offshored the labor that was here and imported the third world cheap labor to take what is left here. We no longer have a productive labor pool in the U.S. and when TPP (NAFTA on steroids) gets here that giant sucking sound that Ross Perot warned us about is going to get very, very loud.

    The day approaches when Labor Day will cease to be an official holiday in the U.S.

    • cettel

      “Conserving” as in feudalism conserves the existing hierarchy.

  • lifeofliberty

    I feel nothing for “breeders” who can’t control their desire to procreate (or simply fuck). Yeah, they’re starving, hungry and – stupid. And they’re kids will be starving, hungry and – stupid, following in mommy and daddy’s footprints (most likely). A few will wise up.

    We need a lot less people, immediately.

    • grammarnazi

      As for yourself, if a law against the illiterate gets introduced, you’ll be among the first to be sent to jail.

    • Absolutely nailed it!!! Bravo!!

  • Preston ely

    “President Barack Obama is a strong supporter of the 1996 welfare reform law, and he wants to cut still farther back on “entitlements,”

    Where in the world are you getting your information from? First of all, the welfare reform law was a GREAT law that forced people to actually get to work in order to qualify for government hand outs. Second of all, Obama KILLED the reform the second he got into office into 2008. It’s literally one of the first things he did. He’s not a supporter of it and he doesn’t “want to cut still farther back on entitlements” … he’s constantly increasing them.

    And the U.S. is not a third world country. Why lie in a headline? That’s not clever copywriting, it’s LAZY and misleading. And it lowers your credibility in your reader’s minds. How about “The U.S. Is Headed Towards 3rd World Status”? You’d get just as many clicks. That’s what you’re after right?

    • cettel

      The link there disproves what you said. Click on the link “and he wants to cut still farther back on ‘entitlements,’” and you will see.

  • Me Who

    “The descriptive analyses presented here cannot clarify the exact causal mechanisms that have led to such a sharp uptick in extreme poverty in the U.S.” This phenomenon appears to correlate with the discovery of a great increase in the wealth of the 1% of the 1%, a study by MIT. While the rest of that one percent is just mamaintaining, albeit very comfortably. lnternational businesses are able to do what is best for their profits, and avoid paying taxes. So it isn’t circulating within our own economy. I think either greed has led to blindness by regulators who can no longer make realistic assessments of economic health for citizens who depend on their policies and enforcement thereof, and with their ignorance, perhaps a willful sabatoge of our economy by some backward provocateurs. And I do hope that those in a position to prevent this will do so fairly, and with compassion.