As newly-minted Nobel Laureate Paul Krugman writes on his blog today, "the real economy has immense downward momentum." Consumer spending is plunging, leading to large deficits at the state level. As David Leonhardt writes in the New York Times today, the next downturn "is likely to revolve around the worst slump in worker pay since — you knew this was coming — the Great Depression." This comes after one of the weakest economic cycles in history for working families, in which the national median household income actually dropped over a seven year stretch. For example, Chicago's collar counties witnessed big declines in median household income over that period. Unemployment is sky-high, too. As a result, 74 of Illinois' 102 counties saw poverty increase between 2000-2006, a problem that's grown more acute in the past two years, is often hidden because of socioeconomic segregation, and will certainly intensify without thorough government investment.

As part of Blog Action Day, I'd like to second Matt Yglesias' clarion call and direct you to the Center for American Progress' 2007 white paper "From Poverty to Prosperity: A National Strategy to Cut Poverty in Half," which provides a valuable amalgamation of policy ideas aimed at addressing the causes and consequences of American poverty. Although they neglect our awful health care system, the major cause of declining wages and family bankruptcies nationwide, CAP does include a few of my favorites in their proposal -- early education, EFCA, affordable housing development, and prisoner re-entry programs. And as Yglesias points out, the investment more than pays for itself:

This kind of human capital calculation isn’t the reason to try to fight domestic poverty (it’s the right thing to do!), but it’s an important part of understanding why the admittedly high price of effective anti-poverty policy isn’t too high a price. Accepting a sky-high poverty rate winds up burdening our education system, our public health system, and our criminal justice system and ultimately harming most everyone. There’s no good reason to be complacent about this.