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Government Admits Poverty Statistics Designed to Keep Official Poverty Low

On Tuesday, America’s poverty rate jumped from 13.2 percent to 15.8 percent — or from 39.8 million to 47.4 million of 308 million Americans — as the government finally acknowledged that the way it calculated the poverty rate was designed to artificially deflate the statistics. The previous poverty rate was based on what an emergency food diet cost in 1955 and didn’t take into account government transfer payments, let alone differential living expenses and health care costs.

The official yearly statistics, to be released in September, will account for medical costs, transportation costs and updated costs of living when determining poverty, and add in food stamps and tax credits (like the fully refundable Earned Income Tax Credit, which often pays the working poor more in refunds than they paid in taxes) as income. Elderly people are expected to see the largest rise in their poverty rate due to medical expenses, while children are expected to appear less poor because of Special Supplemental Nutrition Program for Women, Infants and Children (WIC) funds. High costs of living are expected to drive up poverty rates in major urban areas like New York, Boston, Los Angeles and San Francisco.

What the government will not do is allow the more realistic poverty calculations help determine which Americans qualify for transfer payments such as food stamps, Medicaid, housing benefits, WIC and child care benefits. That might be considered too generous for the likes of some in Congress who prefer to complain about budget deficits for the benefit of the television cameras rather than extend unemployment benefits to those Americans who can’t find jobs in a jobless economic recovery.

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