USA 2008: The Great Depression
By David Usborne
The Independent UK

Tuesday 01 April 2008

Food stamps are the symbol of poverty in the US. In the era of the credit crunch, a record 28 million Americans are now relying on them to survive - a sure sign the world's richest country faces economic crisis.
New York - We knew things were bad on Wall Street, but on Main Street it may be worse. Startling official statistics show that as a new economic recession stalks the United States, a record number of Americans will shortly be depending on food stamps just to feed themselves and their families.

Dismal projections by the Congressional Budget Office in Washington suggest that in the fiscal year starting in October, 28 million people in the US will be using government food stamps to buy essential groceries, the highest level since the food assistance programme was introduced in the 1960s.

The increase - from 26.5 million in 2007 - is due partly to recent efforts to increase public awareness of the programme and also a switch from paper coupons to electronic debit cards. But above all it is the pressures being exerted on ordinary Americans by an economy that is suddenly beset by troubles. Housing foreclosures, accelerating jobs losses and fast-rising prices all add to the squeeze.

Emblematic of the downturn until now has been the parades of houses seized in foreclosure all across the country, and myriad families separated from their homes. But now the crisis is starting to hit the country in its gut. Getting food on the table is a challenge many Americans are finding harder to meet. As a barometer of the country's economic health, food stamp usage may not be perfect, but can certainly tell a story.

Michigan has been in its own mini-recession for years as its collapsing industrial base, particularly in the car industry, has cast more and more out of work. Now, one in eight residents of the state is on food stamps, double the level in 2000. "We have seen a dramatic increase in recent years, but we have also seen it climbing more in recent months," Maureen Sorbet, a spokeswoman for Michigan's programme, said. "It's been increasing steadily. Without the programme, some families and kids would be going without."

But the trend is not restricted to the rust-belt regions. Forty states are reporting increases in applications for the stamps, actually electronic cards that are filled automatically once a month by the government and are swiped by shoppers at the till, in the 12 months from December 2006. At least six states, including Florida, Arizona and Maryland, have had a 10 percent increase in the past year.

In Rhode Island, the segment of the population on food stamps has risen by 18 percent in two years. The food programme started 40 years ago when hunger was still a daily fact of life for many Americans. The recent switch from paper coupons to the plastic card system has helped remove some of the stigma associated with the food stamp programme. The card can be swiped as easily as a bank debit card. To qualify for the cards, Americans do not have to be exactly on the breadline. The programme is available to people whose earnings are just above the official poverty line. For Hubert Liepnieks, the card is a lifeline he could never afford to lose. Just out of prison, he sleeps in overnight shelters in Manhattan and uses the card at a Morgan Williams supermarket on East 23rd Street. Yesterday, he and his fiancée, Christine Schultz, who is in a wheelchair, shared one banana and a cup of coffee bought with the 82 cents left on it.

"They should be refilling it in the next three or four days," Liepnieks says. At times, he admits, he and friends bargain with owners of the smaller grocery shops to trade the value of their cards for cash, although it is illegal. "It can be done. I get $7 back on $10."

Richard Enright, the manager at this Morgan Williams, says the numbers of customers on food stamps has been steady but he expects that to rise soon. "In this location, it's still mostly old people and people who have retired from city jobs on stamps," he says. Food stamp money was designed to supplement what people could buy rather than covering all the costs of a family's groceries. But the problem now, Mr Enright says, is that soaring prices are squeezing the value of the benefits.

"Last St Patrick's Day, we were selling Irish soda bread for $1.99. This year it was $2.99. Prices are just spiralling up, because of the cost of gas trucking the food into the city and because of commodity prices. People complain, but I tell them it's not my fault everything is more expensive."

The US Department of Agriculture says the cost of feeding a low-income family of four has risen 6 percent in 12 months. "The amount of food stamps per household hasn't gone up with the food costs," says Dayna Ballantyne, who runs a food bank in Des Moines, Iowa. "Our clients are finding they aren't able to purchase food like they used to."

And the next monthly job numbers, to be released this Friday, are likely to show 50,000 more jobs were lost nationwide in March, and the unemployment rate is up to perhaps 5 percent.

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this is very scary and every one sits back and watches.i live in Michigan and my employer just sold out some of are work to china.i am in a union shop but does not help me.we are doomed.doomed i tell ya

This is supposed to be suprising or shocking? The worst is still to come! That's what happens when all the industry is moved to Taiwan, Japan and China. Welcome to the third world America and enjoy! You got what you asked for by turning your back to the American labor force. You're going to be a third country for at least a generation or more! I have no sympathy!

I think it will get worse before it gets better also but we are definitely in a recession even though some are in denial about it.

1 out of 8 in michigan are on food stamps???? wow.
It isnt going to get beeter here in michigan until the jobs that were shipped overseas are brought back. Until we see that happen, its going to continue to spiral down, Even our other economic base, tourism, is taking a hit due to the high price of fuel, ect.
Michigan is a great state.... to be FROM.

So, once again the cut/paste Queen puts in her drivel. But I wonder - does she drive a car? That uses oil for gasoline and lubrication, and we all know she doesn't want us in the Middle East. Perhaps she would be willing to give up her car.

Does she want/expect higher salaries every year? This adds to the inflation index - goods, be it 'hard' or 'services' cost more when you give employee's raises. Perhaps she would be willing to forgo wage increases.

Does she purchase luxury items, such as cable TV, Starbucks, fancy clothes? These again are not required, they are luxuries which adds economic 'churn' to the inflation/recession cycles.

Does she routinely go to the Giant or Safeway to purchase all her groceries, rather than producing her own from garden and local barter?
Well, she wants a pay raise, but she doesn't want the farmers and trucker who provide this convenience to her to have a pay raise?

I could go on for quite some time - but if you want to b*tch and complain, as if your usual fare. This time - do it towards the correct direction - go look in the mirror. You have zero self-sufficiency, you want more pay for yourself, but lower costs for everything else, so you can afford more.

It is called wanton "greed" and "lust"

DIS informed,
thats a lot of assumptions to make about someone youve never met, dont you think?
e.g., where do we get our oil from here in the colonies???? ans. not the gulf, actually from canada for the most part.

Rambil thanks He has no effect on me. I can't tell if he is truly trying to flirt or make a name for himself but it is drivel and of no effect on me at all.

actually buying all those luxuries is what makes the economy work. if no one buys new cars, goes on vacation, doesent buy the new boat, ect, ect, because they are broke and worried about thier job going out of state, then we get what we have now,,,,, a recession...
we do need to rethink the way we use energy, thats for sure. i can build you a house that you can air condition for 40.00/ month. We can go back to using trains for moving goods.... theres ALSO public transportation,,,, Recycling, ect. ect.

Rambil you are correct also. We will be needing to do something soon. And I am afraid everyone is so worried about the primaries their attention is elsewhere. We are in trouble as a country that is for sure. Do I believe we will come out of it? Yes I believe we are strong enough to come out of it but how far will it go first is the question.

Ram methinks you should take the DISinformed title there.

If more people DIDN'T go out and buy all the luxury items, instead putting money into sound investments (not speculations) the cycles would be far less drastic.

Oh - you are right - get the public addicted into buying the hot cars, big boats, expensive vacations - it most certainly heats up the economy.
No doubt there - you are correct.

But what happens when something 'burps' or gets out of control (housing market anyone?) Ahhh...now we must pay the price for all that 'heated up economy. Did your forget that little aspect?

Just like a pot of boiling water - boil too long, you run out of water.
Go to replenish the water to a good level again - you are likely not to have more boiling water on hand - and will have to cool it down.

And touching on the oil - Doesn't matter WHERE it comes from. If it isn't produced and refined inside the U.S., by U.S. workers, we are sending cash flow out of the country.

Simple math there - more cash leaving the country than coming in = bad.

A recession caused by dumb people spending more than they had. That's what brought this about. Economists knew this was coming, the '80s and '90s took us from a people who save, to a people who spend excessively, so much so we spend what we don't have. Well, that's what the dumb people did.

No, the recession was not brought on by lack of productivity, failure of business, lack of resources, or a lack of jobs, or high unemployment, we brought ourselves down because idiots thought they had a no limit gift card until the bill came in the mail.

Idiots. How can you honestly let yourself get to a $10,000, $20,000, $30,000 or higher credit debt? I can't even fathom getting a $100 credit debt that I didn't pay off at the end of the month.

Idiots.

We shot ourselves in the foot. With all the great advantages, possibilities this country has given us, idiots are going to collapse us because they were stupid and credit companies, and lending institutions were too stupid to actually believe they would ever get their money back.

Idiots, they weren't CONSERVATIVE with their money and now look where we are.

Please point out where any 'assumptions' I just made about Dragonmess is incorrect.

You believe she would give up her vehicle? You believe she does not want a raise? You believe she uses barter system for items, and makes any attempts at self-sufficiency such as a veggie garden, alternative fuels engines? Or perhaps you have distinct knowledge that she has enough capital readily available that she could afford to retire before the age of 50?

Seems you are making the assumption I am wrong - and you haven't met me.

recession -- when your neighbor is out of income production

depression -- when you are out of income production

Slight correction there, Sailor:

Yes, 'they' were not conservative. However "we" (or at least me and you) will weather the recession quite nicely - seeing how we didn't get hooked into the huge house, fancy boat, luxury item credit traps that "make the economy go"

Some folks who wish to be insulting somehow missed that little point.

For those who don't know me which is alot of you including this man here who has something in his craw about me but I have never even met him, I do plant a garden every year, I do have a 4 cylinder car that I do not drive all the time, I am very self sufficient. No I cannot afford an alternative fuel car at this time but maybe in the future.

This article is incredibly slanted and skewing numbers and facts by the way too to create a sensationalist sentiment to make gullible people like the copy and paste queen, falling in line with the cut and paste king, to believe every single word and think they sky is falling.

The author states at the end, oh gosh, a 5% unemployment rate, the horror....oh the horror. A 5% unemployment rate is impressive, ask the UK and other European country what their unemployment rate is. Last year the unemployment rate was still going down, finally we are slowly turning back, more unemployed, but it is not shocking or alarming. Our GDP is still far outshining the European countries and world. Go look it up.

The article, in general, is ridiculous and is making ridiculous claims by focusing on a very small focal point and magnifying it 100 times over for sensationalism.

The auto industry has been setting itself up for a decline for decades. Auto Unions sending wages and incentives, and retirement packages far too high for unskilled workers. It is the same thing that killed the steel industry in the US and sent those jobs overseas as well.

Unskilled workers making $50,000 a year with pensions more than half their yearly income when working? Outrageous, great for the workers, but economics wise it was incredibly foolish and sent jobs overseas and sent businesses down the drain.

5% unemployment means that 5% are collecting unemployment benefits ---does not include those who have had their benifits expire

and say yer right and it does

then that says corporate america is not paying the worker a fair wage if their worker qualifies for food stamps

they need to either pay more 1-to the worker or 2-more tax to pay for the benifits their worker gets

Or, it is saying that people spend too much money on needless things, or things that they couldn't afford (such as homes) that brought them to the poor house and are getting themselves and more debt. I wouldn't pass it by stupid debtors to spend so much that they forget about one thing, they kinda need money to eat.