For the past two years, the government has debated and implemented various efforts in response to the recession, for better or for worse.  It’s frustrating to contemplate the immense drain on taxpayer funds and emotions that the recovery acts and bailouts have caused, with mixed results.  Despite reported signs of recovery in our economy, American families are definitely still suffering according to reports released over the past few weeks by government agencies.  This is probably not news to you.  Lots of attention has been given to a difficult business climate and hardship – low savings rates, decreased lending, unemployment, etc. – and a bad economy is rightly to blame. 

Today President Obama turns our attention to one of the last stops on the road of economic despair, homelessness.  This is the first national proposal for an action plan to prevent and end homelessness.  A new report that came out last week from the Department of Housing and Urban Development revealed that although homelessness among individuals in America actually declined in 2009, homelessness among families actually rose. 

In 2009, about 1.56 million people spent at least one night in an emergency shelter.  To put that in perspective, that’s one in every 200 Americans.  One third of those were part of a homeless family, and the National Coalition for the Homeless has stated that family homelessness is even more widespread than the report indicates.  The HUD report stated that over the past three years, there has actually been a 30% increase in the number of sheltered homeless families.   Last year Congress approved $1.5 billion to help prevent families from becoming homeless and to re-house those that do, yet that money has just begun to be spent. 

The bad economic conditions are to blame for the increase in homelessness among families.  A report that came out a few weeks ago from the Bureau of Labor Statistics revealed that 9.4 million families had at least one unemployed member in 2009.  That’s about 12.0% of American families and almost double the number from 2008.  It’s not a far stretch to imagine that the 30% increase over the past three years in homelessness among families is linked to the rise in unemployment among family members.

There are some important considerations to keep in mind as the President reveals his action plan.  Certainly there are trade-offs whenever any action plan is put in motion.  Better efforts are needed to aid those in despair, but we have to keep careful footing so future economic security is not a cost of giving aid.  Homelessness is a lagging economic indicator, meaning that these people did not lose their job one day and become homeless the next.  They likely exhausted other resources available to them before they became homeless, after losing jobs.  Any commitment to major funding packages for homeless programming will reduce capital available for businesses to create jobs; jobs that would prevent homelessness for others in the future.  Truly the best action plan to prevent and end homelessness for Americans would be for the President and Congress to foster growth in a healthy economy that could stock up on badly needed capital instead of passing stimulus packages that only reduce the supply of capital.  Yes, we need better shelter and transitional housing programs to accommodate the needy, but we also need recognition of the underlying problem facing those in economic despair.