The US is currently at the mercy of harsh and strained economic conditions, and its middle and lower classes are exposed like at no other time in their recent history. This period of fiscal tumult is also proving a catalyst for alternative social issues, such as benefits protests from public sector workers and a steady rise in national hate groups within the countries boundaries. One of the most significant issues within the contemporary USA is increasing poverty, especially in the face of steadily climbing food and fuel prices, which is threatening to create a significant divide between the north and south of the nation.
The Basics of a Strained Economy
The fiscal circumstances of the current US are of course a reflection of the recent recession and subsequent painstaking recovery. The main issue with a recession of this nature is its presence as a vicious and divisive cycle, that often sees unemployment rise and citizens unable to contribute to an economy. As a consequence, governments are coerced into reducing spending and inflating taxes and prices, creating a situation where basics such as food and drink are more expensive and increasingly out of the reach of struggling citizens.
This is where poverty becomes prevalent, to the degree where it is now a burgeoning epidemic within the US. The southern belt line of states in particular are suffering, as these feature households that rely heavily on agriculture and usually sustain a lower level of income even during prosperous economic times. As a result of the slow economic recovery and soaring raw food and mineral prices, farming has suffered and states such as Alabama and Mississippi have slipped from the brink of poverty to deep beneath its thresholds.
The US labor department recently announced that raw import grain prices rose significantly by 1.4% through February, which is part of an overall increase of 8.5% over the course of the last year. In addition to the steady inflation of agricultural goods such as wheat, corn and soy beans, this has had a devastating effect throughout the geographic south of the US, leaving many households restricted in terms of their business and affiliated finances. What’s more, it is a growing indicator of the vulnerability of the US to exhorted prices within a slow moving economy.
A State of Panic
There is no doubt that the US is victim of an unfortunate set of circumstances at present, although some of these are undoubtedly a consequence of poor financial planning and lending decisions. While these problems are significant enough by themselves, they have been intensified by the rise in food and fuel costs, as well as soaring unemployment and over reliance on oil as a source for transportation. This medley of cost and logistical issues are in danger of driving may US families to the very edge of the social fabric, especially those within the deep south of the country.
The statistics are indeed damning. The nationwide Gallup Organization reports that 16% of US citizens went hungry for a period of time during 2010, due to strained finances and a household income level that could not source food and beverages at an affordable rate. The majority of this percentage where stationed in the south of the nation, where community food banks have been pressed into service by an ever increasing number of deserving citizens. Not only a evocation of a struggling economy, this also serves as a warning to the capitalist nature of the US as a whole.
The Distribution of Wealth and Capitalism
Of course, the US is not the only western nation with capitalist principles, but it is perhaps the most prominent in terms of the way that it adheres to them. To this end, the distribution of wealth within the US is not as proportionate as it is in other affluent European or Asian nations, meaning that the most generative individuals and organizations within the country are able to retain the bulk of the capital. In theory, while this serves to reward productive entities who create wealth, it does little to cultivate a financial equilibrium within society.
While an entirely balanced wealth distribution is unobtainable without the application of communist values, a more proportionate share of the nations affluence would be beneficial to society as a whole. This is especially significant in a recovering economy, where individuals needs to be drawn together as empowered and contributing members of a community, and this is a crucial way in which a democratic government can serve the most deserving of its people and fulfil its purpose. Given the increasing seriousness of the fiscal situation for America’s lower and middle classes, some action would be welcomed sooner rather than later.