The Truth About the Economy? Soaking the Poor! IMAGINE!!! Not Exactly Lennon's Vision (OCCUPY!)

The fable of the century and its logical result?

It's very hard to deny when you coldly consider the facts.

If these are the ultimate fruits of labor, why would anyone in the future ever work at a company except their own?

No Loyalty = No Engaged Workers.

Hope those robots are ready to take over now.

What a screwed-up vision for a civilized world.

Fable of the Century

April 5, 2012

Imagine a country in which the very richest people get all the economic gains. They eventually accumulate so much of the nation’s total income and wealth that the middle class no longer has the purchasing power to keep the economy going full speed. Most of the middle class’s wages keep falling and their major asset – their home – keeps shrinking in value.

Imagine that the richest people in this country use some of their vast wealth to routinely bribe politicians. They get the politicians to cut their taxes so low there’s no money to finance important public investments that the middle class depends on – such as schools and roads, or safety nets such as health care for the elderly and poor.

Imagine further that among the richest of these rich are financiers. These financiers have so much power over the rest of the economy they get average taxpayers to bail them out when their bets in the casino called the stock market go bad. They have so much power they even shred regulations intended to limit their power.

These financiers have so much power they force businesses to lay off millions of workers and to reduce the wages and benefits of millions of others, in order to maximize profits and raise share prices – all of which make the financiers even richer, because they own so many shares of stock and run the casino.

Now, imagine that among the richest of these financiers are people called private-equity managers who buy up companies in order to squeeze even more money out of them by loading them up with debt and firing even more of their employees, and then selling the companies for a fat profit.

Although these private-equity managers don’t even risk their own money – they round up investors to buy the target companies – they nonetheless pocket 20 percent of those fat profits.

And because of a loophole in the tax laws, which they created with their political bribes, these private equity managers are allowed to treat their whopping earnings as capital gains, taxed at only 15 percent – even though they themselves made no investment and didn’t risk a dime.

Finally, imagine there is a presidential election. One party, called the Republican Party, nominates as its candidate a private-equity manager who has raked in more than $20 million a year and paid only 13.9 percent in taxes – a lower tax rate than many in the middle class.

Yes, I know it sounds far-fetched. But bear with me because the fable gets even wilder. Imagine this candidate and his party come up with a plan to cut the taxes of the rich even more – so millionaires save another $150,000 a year. And their plan cuts everything else the middle class and the poor depend on – Medicare, Medicaid, education, job-training, food stamps, Pell grants, child nutrition, even law enforcement.

What happens next?

There are two endings to this fable. You have to decide which it’s to be.

In one ending the private-equity manager candidate gets all his friends and everyone in the Wall Street casino and everyone in every executive suite of big corporations to contribute the largest wad of campaign money ever assembled – beyond your imagination.

The candidate uses the money to run continuous advertisements telling the same big lies over and over, such as “don’t tax the wealthy because they create the jobs” and “don’t tax corporations or they’ll go abroad” and “government is your enemy” and “the other party wants to turn America into a socialist state.

And because big lies told repeatedly start sounding like the truth, the citizens of the country begin to believe them, and they elect the private equity manager president. Then he and his friends turn the country into a plutocracy (which it was starting to become anyway).

But there’s another ending. In this one, the candidacy of the private equity manager (and all the money he and his friends use to try to sell their lies) has the opposite effect. It awakens the citizens of the country to what is happening to their economy and their democracy. It ignites a movement among the citizens to take it all back.

The citizens repudiate the private equity manager and everything he stands for, and the party that nominated him. And they begin to recreate an economy that works for everyone and a democracy that’s responsive to everyone.

Just a fable, of course. But the ending is up to you.

ROBERT B. REICH, one of the nation’s leading experts on work and the economy, is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. Time Magazine has named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including his latest best-seller, “Aftershock: The Next Economy and America’s Future;” “The Work of Nations,” which has been translated into 22 languages; and his newest, an e-book, “Beyond Outrage.” His syndicated columns, television appearances, and public radio commentaries reach millions of people each week. He is also a founding editor of the American Prospect magazine, and Chairman of the citizen’s group Common Cause.

• Beyond Outrage

  What has gone wrong with our economy and our democracy, and how to fix it
  
  
  
• 

  Aftershock

  The Next Economy and America's Future
  
  
  
• 

  Supercapitalism

  The Transformation of Business, Democracy, and Everyday Life
  
• 

  Reason

  Why Liberals Will Win the Battle for America
  
  
  
• 

  Locked in the Cabinet

  A memoir of four years as Secretary of Labor

 

Amend2012

The First Amendment Upside Down. Why We Must Occupy Democracy

You’ve been seeing this across the country … Americans assaulted, clubbed, dragged, pepper-sprayed … Why? For exercising their right to free speech and assembly — protesting the increasing concentration of income, wealth, and political power at the top.

And what’s Washington’s response? Nothing. In fact, Congress’s so-called “supercommittee” just disbanded because Republicans refuse to raise a penny of taxes on the rich.

Meanwhile, the Supreme Court says money is speech and corporations are people. The Supreme Court’s Citizens United decision last year ended all limits on political spending. Millions of dollars are being funneled to politicians without a trace.

And a revolving door has developed between official Washington and Wall Street – with bank executives becoming public officials who make rules that benefit the banks before heading back to the Street to make money off the rules they created.

Other top officials, including an increasing proportion of former members of congress, are cashing in by joining lobbying power houses and pressuring their former colleagues to do whatever their clients want.

Millionaires and billionaires on Wall Street and in executive suites aren’t contributing all this money out of sheer love of country. Their political spending is analogous to their other investments. Mostly they want low tax rates and friendly regulations.

Why else do you suppose tax rates on the super rich are now lower than they’ve been in three decades, and why – even though the long-term budget deficit is horrendous – those rates aren’t rising? Why else do the 400 richest Americans (whose wealth is larger than the combined wealth of the bottom 150 million Americans) now pay an average tax rate of only 17 percent?

Why do you think Wall Street got bailed without a single string attached – not even being required to help homeowners to whom they sold mortgages, who are now so far under water they’re drowning? And why does the financial reform legislation have loopholes big enough for bankers to drive their Ferrari’s through?

And why else are oil companies, big agribusinesses, military contractors, and the pharmaceutical industry reaping billions of dollars of government subsidies and special tax breaks?

Experts say the 2012 presidential race is likely to be the priciest ever, costing an estimated $6 billion. “It is far worse than it has ever been,” says Republican Senator John McCain.

If there’s a single core message to the Occupier movement it’s that the increasing concentration of income and wealth at the top endangers our democracy. With money comes political power.

Yet when real people without money assemble to express their dissatisfaction with all this, they’re told the First Amendment doesn’t apply. Instead, they’re treated as public nuisances – clubbed, pepper-sprayed, thrown out of public parks and evicted from public spaces.

Across America, public officials are saying Occupiers have to go. Even in universities – where free speech is supposed to be sacrosanct - peaceful assembly is being met with clubs and pepper spray.  

The First Amendment is being stood on its head. Money speaks, and an unlimited amount of it can now be spent bribing and cajoling politicians. Yet peaceful assembly is viewed as a public nuisance and removed by force.

This is especially worrisome now that so many Americans are in economic trouble. The jobs recession grinds on, seemingly without end. Homes are being foreclosed upon. Qualified students cannot afford college. Or they’re forced to take on huge debt loads they can’t repay in a jobless economy. Schools are firing teachers. Vital social services are being axed.

How are Americans to be heard about what should be done about any of this if they are not allowed to mobilize and organize? When the freedom of speech goes to the highest bidder, moneyed interests have a disproportionate say.

Now more than ever, the First Amendment needs to be put right side up. Nothing less than the future of our democracy is at stake.

Stop the Austerity Train Wreck!

The biggest question right now on Planet Washington is whether the congressional supercommittee will reach an agreement.

That’s the wrong question. Agreement or not, Washington is on the road to making budget cuts that will slow the economy, increase unemployment, and impose additional hardship on millions of Americans.

The real question is how to stop this austerity train wreck, and substitute the following:

FIRST: no cuts before jobs are back – until unemployment is down to 5 percent. Until then, the economy needs a boost, not a cut. Consumers – whose spending is 70 percent of the economy – don’t have the money to boost the economy on their own. Their pay is dropping and they’re losing jobs.

SECOND: Make the boost big enough. 14 million Americans are out of work, and 10 million are working part time who need full-time jobs. The President’s proposed jobs program is a start but it’s tiny relative to what needs to be done. It would create fewer than 2 million jobs. We need a big jobs program – rebuilding America’s crumbling infrastructure, and including a WPA and Civilian Conservation Corps.

THIRD: To pay for this, raise taxes on the super-rich. It’s only fair. Never before has so much income and wealth been concentrated at the very top, and taxes on the top so low. Go back to the 70 percent marginal tax we had before 1980. And include more tax brackets at the top. It doesn’t make sense that any income over $375,000 is taxed at the same 35 percent, even if it’s a billion dollars. And tax all sources of income at the same rate, including capital gains.

FOURTH: Cut the budget where the real bloat is. Military spending and corporate welfare. End weapons systems that don’t work and stop wars we shouldn’t be fighting to begin with, and we save over $300 billion a year. Cut corporate welfare – subsidies and special tax breaks going to big agribusiness, big oil, big pharma, and big insurance – and we save another $100 billion.

Do you hear me, Washington? Do these four things and restore jobs and prosperity. Fail to do these, and you’ll make things much, much worse.

Mario Savio Memorial Lecture, November 15, 2011

THE SEVEN BIGGEST ECONOMIC LIES

The President’s Jobs Bill doesn’t have a chance in Congress — and the Occupiers on Wall Street and elsewhere can’t become a national movement for a more equitable society – unless more Americans know the truth about the economy.

Here’s a short (2 minute, 30 second) effort to rebut the seven biggest whoppers now being told by those who want to take America backwards. The major points:

1. Tax cuts for the rich trickle down to everyone else. Baloney. Ronald Reagan and George W. Bush both sliced taxes on the rich and what happened? Most Americans’ wages (measured by the real median wage) began flattening under Reagan and have dropped since George W. Bush. Trickle-down economics is a cruel joke.

 2. Higher taxes on the rich would hurt the economy and slow job growth. False. From the end of World War II until 1981, the richest Americans faced a top marginal tax rate of 70 percent or above. Under Dwight Eisenhower it was 91 percent. Even after all deductions and credits, the top taxes on the very rich were far higher than they’ve been since. Yet the economy grew faster during those years than it has since. (Don’t believe small businesses would be hurt by a higher marginal tax; fewer than 2 percent of small business owners are in the highest tax bracket.) 

3. Shrinking government generates more jobs. Wrong again. It means fewer government workers – everyone from teachers, fire fighters, police officers, and social workers at the state and local levels to safety inspectors and military personnel at the federal. And fewer government contractors, who would employ fewer private-sector workers. According to Moody’s economist Mark Zandi (a campaign advisor to John McCain), the $61 billion in spending cuts proposed by the House GOP will cost the economy 700,000 jobs this year and next.

4. Cutting the budget deficit now is more important than boosting the economy. Untrue. With so many Americans out of work, budget cuts now will shrink the economy. They’ll increase unemployment and reduce tax revenues. That will worsen the ratio of the debt to the total economy. The first priority must be getting jobs and growth back by boosting the economy. Only then, when jobs and growth are returning vigorously, should we turn to cutting the deficit.

 5. Medicare and Medicaid are the major drivers of budget deficits. Wrong. Medicare and Medicaid spending is rising quickly, to be sure. But that’s because the nation’s health-care costs are rising so fast. One of the best ways of slowing these costs is to use Medicare and Medicaid’s bargaining power over drug companies and hospitals to reduce costs, and to move from a fee-for-service system to a fee-for-healthy outcomes system. And since Medicare has far lower administrative costs than private health insurers, we should make Medicare available to everyone.

6. Social Security is a Ponzi scheme. Don’t believe it. Social Security is solvent for the next 26 years. It could be solvent for the next century if we raised the ceiling on income subject to the Social Security payroll tax. That ceiling is now $106,800.

7. It’s unfair that lower-income Americans don’t pay income tax. Wrong. There’s nothing unfair about it. Lower-income Americans pay out a larger share of their paychecks in payroll taxes, sales taxes, user fees, and tolls than everyone else.

Demagogues through history have known that big lies, repeated often enough,  start being believed — unless they’re rebutted. These seven economic whoppers are just plain wrong. Make sure you know the truth – and spread it on.

The Truth About the Economy

"Six Lies" at Summit for a Fair Economy,
Minneapolis, September 10, 2011.

Jobs Not Cuts

Dartmouth’s public summer lecture series, “Leading Voices in Politics and Policy”.
The Middle Class and the Republican Party, and Economic Insecurity.

“Why America’s human capital is more important than financial capital.”

Invest in America

“The Truth About the Economy in 2 Minutes and 15 Seconds”

Help End the Military-Industrial-Congressional Complex
_ _ _ _ _ _ _

April 7, 2012

Welfare Limits Left Poor Adrift as Recession Hit

Jason DeParle

PHOENIX — Perhaps no law in the past generation has drawn more praise than the drive to “end welfare as we know it,” which joined the late-’90s economic boom to send caseloads plunging, employment rates rising and officials of both parties hailing the virtues of tough love.

But the distress of the last four years has added a cautionary postscript: much as overlooked critics of the restrictions once warned, a program that built its reputation when times were good offered little help when jobs disappeared. Despite the worst economy in decades, the cash welfare rolls have barely budged.

Faced with flat federal financing and rising need, Arizona is one of 16 states that have cut their welfare caseloads further since the start of the recession — in its case, by half. Even as it turned away the needy, Arizona spent most of its federal welfare dollars on other programs, using permissive rules to plug state budget gaps.

The poor people who were dropped from cash assistance here, mostly single mothers, talk with surprising openness about the desperate, and sometimes illegal, ways they make ends meet. They have sold food stamps, sold blood, skipped meals, shoplifted, doubled up with friends, scavenged trash bins for bottles and cans and returned to relationships with violent partners — all with children in tow.

Esmeralda Murillo, a 21-year-old mother of two, lost her welfare check, landed in a shelter and then returned to a boyfriend whose violent temper had driven her away. “You don’t know who to turn to,” she said.

Maria Thomas, 29, with four daughters, helps friends sell piles of brand-name clothes, taking pains not to ask if they are stolen. “I don’t know where they come from,” she said. “I’m just helping get rid of them.”

To keep her lights on, Rosa Pena, 24, sold the groceries she bought with food stamps and then kept her children fed with school lunches and help from neighbors. Her post-welfare credo is widely shared: “I’ll do what I have to do.”

Critics of the stringent system say stories like these vindicate warnings they made in 1996 when President Bill Clinton fulfilled his pledge to “end welfare as we know it”: the revamped law encourages states to withhold aid, especially when the economy turns bad.

The old program, Aid to Families with Dependent Children, dates from the New Deal; it gave states unlimited matching funds and offered poor families extensive rights, with few requirements and no time limits.

The new program, Temporary Assistance for Needy Families, created time limits and work rules, capped federal spending and allowed states to turn poor families away.

“My take on it was the states would push people off and not let them back on, and that’s just what they did,” said Peter B. Edelman, a law professor at Georgetown University who resigned from the Clinton administration to protest the law. “It’s been even worse than I thought it would be.”

But supporters of the current system often say lower caseloads are evidence of decreased dependency. Many leading Republicans are pushing for similar changes to much larger programs, like Medicaid and food stamps.

Representative Paul D. Ryan of Wisconsin, the top House Republican on budget issues, calls the current welfare program “an unprecedented success.” Mitt Romney, who leads the race for the Republican presidential nomination, has said he would place similar restrictions on “all these federal programs.” One of his rivals, Rick Santorum, calls the welfare law a source of spiritual rejuvenation.

“It didn’t just cut the rolls, but it saved lives,” Mr. Santorum said, giving the poor “something dependency doesn’t give: hope.”

President Obama spoke favorably of the program in his 2008 campaign — promoting his role as a state legislator in cutting the Illinois welfare rolls. But he has said little about it as president.

Even in the 1996 program’s early days, when jobs were plentiful, a subset of families appeared disconnected — left with neither welfare nor work. Their numbers were growing before the recession and seem to have surged since then.

No Money, No Job

While data on the very poor is limited and subject to challenge, recent studies have found that as many as one in every four low-income single mothers is jobless and without cash aid — roughly four million women and children. Many of the mothers have problems like addiction or depression, which can make assisting them politically unpopular, and they have received little attention in a downturn that has produced an outpouring of concern for the middle class.

Poor families can turn to other programs, like food stamps or Medicaid, or rely on family and charity. But the absence of a steady source of cash, however modest, can bring new instability to troubled lives.

One prominent supporter of the tough welfare law is worried that it may have increased destitution among the most disadvantaged families. “This is the biggest problem with welfare reform, and we ought to be paying attention to it,” said Ron Haskins of the Brookings Institution, who helped draft the 1996 law as an aide to House Republicans and argues that it has worked well for most recipients.

“The issue here is, can you create a strong work program, as we did, without creating a big problem at the bottom?” Mr. Haskins said. “And we have what appears to be a big problem at the bottom.”

He added, “This is what really bothers me: the people who supported welfare reform, they’re ignoring the problem.”

The welfare program was born amid apocalyptic warnings and was instantly proclaimed a success, at times with a measure of “I told you so” glee from its supporters. Liberal critics had warned that its mix of time limits and work rules would create mass destitution — “children sleeping on the grates,” in the words of Senator Daniel Patrick Moynihan, a New York Democrat who died in 2003.

But the economy boomed, employment soared, poverty fell and caseloads plunged. Thirty-two states reduced their caseloads by two-thirds or more, as officials issued press releases and jostled for bragging rights. The tough law played a large role, but so did expansions of child care and tax credits that raised take-home pay.

In a twist on poverty politics, poor single mothers, previously chided as “welfare queens,” were celebrated as working-class heroes, with their stories of leaving the welfare rolls cast as uplifting tales of pluck. Flush with federal money, states experimented with programs that offered counseling, clothes and used cars.

But if the rise in employment was larger than predicted, it was also less transformative than it may have seemed. Researchers found that most families that escaped poverty remained “near poor.”

And despite widespread hopes that working mothers might serve as role models, studies found few social or educational benefits for their children. (They measured things like children’s aspirations, self-esteem, grades, drug use and arrests.) Nonmarital births continued to rise.

But the image of success formed early and stayed frozen in time.

“The debate is over,” President Clinton said a year after signing the law, which he often cites in casting himself as a centrist. “Welfare reform works.”

The recession that began in 2007 posed a new test to that claim. Even with $5 billion in new federal funds, caseloads rose just 15 percent from the lowest level in two generations. Compared with the 1990s peak, the national welfare rolls are still down by 68 percent. Just one in five poor children now receives cash aid, the lowest level in nearly 50 years.

As the downturn wreaked havoc on budgets, some states took new steps to keep the needy away. They shortened time limits, tightened eligibility rules and reduced benefits (to an average of about $350 a month for a family of three).

Since 2007, 11 states have cut the rolls by 10 percent or more. They include centers of unemployment like Georgia, Indiana and Rhode Island, as well as Michigan, where the welfare director justified cuts by telling legislators, “We have a fair number of people gaming the system.” Arizona cut benefits by 20 percent and shortened time limits twice — to two years, from five.

Many people already found the underlying system more hassle than help, a gantlet of job-search classes where absences can be punished by a complete loss of aid. Some states explicitly pursue a policy of deterrence to make sure people use the program only as a last resort.

Since the states get fixed federal grants, any caseload growth comes at their own expense. By contrast, the federal government pays the entire food stamp bill no matter how many people enroll; states encourage applications, and the rolls have reached record highs.

Among the Arizonans who lost their checks was Tamika Shelby, who first sought cash aid at 29 after fast-food jobs and a stint as a waitress in a Phoenix strip club. The state gave her $176 a month and sent her to work part time at a food bank. Though she was effectively working for $2 an hour, she scarcely missed a day in more than a year.

“I loved it,” she said.

Her supervisor, Michael Cox, said Ms. Shelby “was just wonderful” and “would even come up here on her days off.”

Then the reduced time limit left Ms. Shelby with neither welfare nor work. She still gets about $250 a month in food stamps for herself and her 3-year-old son, Dejon. She counts herself fortunate, she said, because a male friend lets her stay in a spare room, with no expectations of sex. Still, after feeding her roommate and her child, she said, “there are plenty of days I don’t eat.”

“I know there are some people who abuse the system,” Ms. Shelby said. “But I was willing to do anything they asked me to. If I could, I’d still be working for those two dollars an hour.”

Diverting Federal Funds

Clarence H. Carter, Arizona’s director of economic security, says finances forced officials to cut the rolls. But the state gets the same base funding from the federal government, $200 million, that it received in the mid-1990s when caseloads were five times as high. (The law also requires it to spend $86 million in state funds.)

Arizona spends most of the federal money on other human services programs, especially foster care and adoption services, while using just one-third for cash benefits and work programs — the core purposes of Temporary Assistance for Needy Families. If it did not use the federal welfare money, the state would have to finance more of those programs itself.

“Yes, we divert — divert’s a bad word,” said State Representative John Kavanagh, a Republican and chairman of the Arizona House Appropriations Committee. “It helps the state."

While federal law allows such flexibility, critics say states neglect poor families to patch their own finances. Nationally, only 30 percent of the welfare money is spent on cash benefits.

“It’s not that the other stuff isn’t important, but it’s not what T.A.N.F.” — the Temporary Assistance program — “was intended for,” said LaDonna Pavetti of the Center on Budget and Policy Priorities, a Washington research and advocacy group. “The states use the money to fill budget holes.”

Even in an economy as bad as Arizona’s, some recipients find work. Estefana Armas, a 30-year-old mother of three, spent nine years on the rolls, fighting depression so severe that it left her hospitalized. Once exempt from time limits because of her mental health, Ms. Armas joined support groups, earned a high school equivalency degree and enrolled in community college.

Just as her time expired last summer, Ms. Armas found work as a teacher’s aide at a church preschool.

“It kind of pushed me to get a job,” she said.

Supporters of Temporary Assistance cite stories like that to argue that it promotes a work ethic. Despite high unemployment, low-skilled single mothers work as much now, on average, as they did under the old welfare law — and by some measures, a bit more. As a group, their poverty rates are still lower. And those without cash aid, they say, can turn to other programs.

“We have reduced our caseload, and we don’t have people dying in the street,” Mr. Kavanagh said. “There were an awful lot of people who didn’t need it.”

But the number of very poor families appears to be growing. Pamela Loprest and Austin Nichols, researchers at the Urban Institute, found that one in four low-income single mothers nationwide — about 1.5 million — are jobless and without cash aid. That is twice the rate the researchers found under the old welfare law. More than 40 percent remain that way for more than a year, and many have mental or physical disabilities, sick children or problems with domestic violence.

Using a different definition of distress, Luke Shaefer of the University of Michigan and Kathryn Edin of Harvard examined the share of households with children in a given month living on less than $2 per person per day. It has nearly doubled since 1996, to almost 4 percent. Even when counting food stamps as cash, they found one of every 50 children live in such a household.

The Census Bureau uses a third measure, “deep poverty,” which it defines as living on less than half of the amount needed to escape poverty (for a family of three, that means living on less than $9,000 a year). About 10 percent of households headed by women report incomes that low, a bit less than the peak under the old law but still the highest level in 18 years.

Some researchers say the studies exaggerate poverty by inadequately accounting for undisclosed income, like help from boyfriends or under-the-table jobs. They note that asking poor people about their consumption, rather than their income, suggests that even the poorest single mothers have improved their standard of living since 1996.

Mr. Haskins, the Temporary Assistance program’s architect, agrees that poverty at the bottom “is not as bad as it seems,” but adds, “It’s still pretty darn bad.”

Trying to Make Do

Asked how they survived without cash aid, virtually all of the women interviewed here said they had sold food stamps, getting 50 cents for every dollar of groceries they let others buy with their benefit cards. Many turned to food banks and churches. Nationally, roughly a quarter have subsidized housing, with rents as low as $50 a month.

Several women said the loss of aid had left them more dependent on troubled boyfriends. One woman said she sold her child’s Social Security number so a relative could collect a tax credit worth $3,000.

“I tried to sell blood, but they told me I was anemic,” she said.

Several women acknowledged that they had resorted to shoplifting, including one who took orders for brand-name clothes and sold them for half-price. Asked how she got cash, one woman said flatly, “We rob wetbacks” — illegal immigrants, who tend to carry cash and avoid the police. At least nine times, she said, she has flirted with men and led them toward her home, where accomplices robbed them.

“I felt bad afterwards,” she said. But she added, “There were times when we didn’t have nothing to eat.”

One family ruled out crime and rummaged through trash cans instead. The mother, an illegal immigrant from Mexico, could not get aid for herself but received $164 a month for her four American-born children until their time limit expired. Distraught at losing her only steady source of cash, she asked the children if they would be ashamed to help her collect discarded cans.

“I told her I would be embarrassed to steal from someone — not to pick up cans,” her teenage daughter said.

Weekly park patrols ensued, and recycling money replaced about half of the welfare check.

Despite having a father in prison and a mother who could be deported, the children exude earnest cheer. A daughter in the fifth grade won a contest at school for reading the most books. A son in the eighth grade is a student leader praised by his principal for tutoring younger students, using supplies he pays for himself.

“That’s just the kind of character he has,” the principal said.

After losing cash aid, the mother found a cleaning job but lost it when her boss discovered that she was in the United States illegally. The family still gets subsidized housing and $650 a month in food stamps.

The boy worries about homelessness, but his younger sisters, 9 and 10, see an upside in scavenging.

“It’s kind of fun because you get to look through the trash,” one of the girls said.

“And you get to play in the park a little while before you go home,” her sister agreed.