FedUpUSA

Archive for the ‘food stamps’ Category

If you do much grocery shopping, you have probably noticed that the cost of food has been rising at a very brisk pace over the past year.  So why are food prices rising so fast?  According to Federal Reserve Chairman Ben Bernanke, inflation is still very low and the economy is improving.  So what is going on here?  When I go to the grocery store these days, there are very few things that I will buy unless they are on sale.  In fact, I have noticed that many of the new “sale prices” are the old regular prices.  Other items have had their packages reduced in size in order to hide the price increases.  But with millions of American families just barely scraping by as it is, what is going to happen if food prices keep rising this rapidly?

The food prices are especially painful if you are trying to eat healthy.  Most of the low price stuff in the grocery stores is garbage.  Eating the “typical American diet” is a highway to cancer, heart disease and diabetes.

But if you try to stick to food that is “healthy” or “organic” you can blow through hundreds of dollars in a heartbeat.  In fact, the reality is that tens of millions of American families have now essentially been priced out of a healthy diet.

Soon there will be millions more American families that will not even be able to afford an unhealthy diet.

Some recent statistics compiled by the Bureau of Labor Statistics are absolutely staggering.  According to a recent CNBC article, over the past year many of the most popular foods in America have absolutely soared in price….

Coffee, for instance, is up 40 percent. Celery is 28 percent higher while butter prices rose 26.4 percent. Rounding out the top five are bacon, at 23.5 percent, and cabbage, at 23.3 percent.

Unfortunately, it looks like the trend of rising food prices is accelerating.  Just look at what the CNBC article says happened in the month of April alone….

Just in April—the most recent month for which data is available—grapes went up nearly 30 percent, cabbage jumped about 17 percent and orange juice surged more than 5 percent.

Meat is becoming more expensive as well.  Since March 2009, livestock prices have risen by 138%.

So when Ben Bernanke tells us that inflation is very low, that really is a lie.  On the stuff that people spend money on every day (like food and gas), prices have gone up dramatically.

Sadly, this is not just a phenomenon that is happening in the United States.  The truth is that the entire planet is rapidly approaching a horrific global food crisis.

Over the past year, the global price of food has risen by 37 percent and this has pushed approximately 44 million more people around the world into poverty.

When food prices rise in the U.S. it may be painful for millions of American families, but around the world a rise in food prices can mean the difference between surviving and not surviving.

That is why it has been so alarming that the global price of wheat has approximately doubled over the past year.

But it is not just wheat that has been soaring.  Check out what a recent Bloomberg article had to say about what has been happening to many key agricultural commodities over the past year….

Corn futures advanced 77 percent in the past 12 months in Chicago trading, a global benchmark, rice gained 39 percent and sugar jumped 64 percent. There will be shortages in corn, wheat, soybeans, coffee and cocoa this year or next, according to Utrecht, Netherlands-based Rabobank Groep. Prices also rose after droughts and floods from Australia to Canada ruined crops last year. European farmers are now contending with their driest growing season in more than three decades.

Even before this recent spike in food prices the world was struggling to get enough food to everybody.  It has been estimated that somewhere in the world someone starves to death every 3.6 seconds, and 75 percent of those are children under the age of five.

So what is going to happen if food prices keep on rising at the current pace?

That is a very good question.

We really are starting to move into unprecedented territory.  Nobody is quite sure what is going to happen next.

So why is all of this happening?

Well, a lot of people are blaming the Federal Reserve.  All of the “quantitative easing” that the Fed has done has flooded the financial markets with money.  All of that money had to go somewhere.  Much of it has pumped up the prices of hard assets such as oil, gold and agricultural commodities.

But it is not just the Fed that is to blame.  The truth is that central banks all over the world have been recklessly printing money.

When the amount of money in an economy goes up, the purchasing value of all existing money goes down.  In the United States, that means that your dollars will not go as far as they did before.

But it is not just monetary policy that is affecting food prices.  In 2010 and 2011 we have seen an unprecedented wave of natural disasters and crazy weather.  This has caused problems with crops all over the globe.

In addition, U.S. economic policies are also playing a role.  At this point, almost a third of all corn grown in the United States is used for fuel.  This is putting a lot of stress on the price of corn.

Also, there are some long-term trends that are not in our favor.  For example, the systematic depletion of the Ogallala Aquifer could eventually turn “America’s Breadbasket” back into the “Dust Bowl”.  If you have not heard of this problem I would encourage you to do some research on it.

Things are going to get a lot worse, but already America is having a really hard time feeding itself.  According to Feeding America’s 2010 hunger study, more than 37 million Americans are now being served by food pantries and soup kitchens.

So is that number unusual?

Yes, it sure is.

The number of Americans that are going to food pantries and soup kitchens has increased by 46% since 2006.

That is not a good trend.

Another stat that I talk a lot about in this column is the number of Americans on food stamps.

Right now, there are 44 million Americans on food stamps.  Nearly half of them are children.

How did we ever get to the point as a nation where more than 20 million children end up on food stamps?

It is estimated that one out of every four American children is currently on food stamps, and it is being projected that approximately 50 percent of all U.S. children will be on food stamps at some point in their lives before they reach the age of 18.

So what is going to happen if the economy gets even worse?

What is going to happen if there really is a major food crisis in this country someday?

Food prices have been going up for decades and they are going to continue to go up.  But the frightening thing is how fast they are increasing now.

As the U.S. middle class continues to be destroyed, the number of Americans that can’t afford to buy enough food is going to continue to rise.  Food prices are rising much faster than wages are, and that is not likely to change any time soon.

Food is rapidly becoming one of the most important global economic issues of this decade.  The farther one looks down the road, the bleaker things look for the global food situation.

I hope you are prepared for that.

The Economic Collapse

From November to December of 2010 487,000 Americans were added to the food stamp program.  Keep in mind this all occurred while the stock market continued to soar and has rallied nearly 100 percent from the lows reached in March of 2009.  Working and middle class Americans barely have enough to pay for the monthly bills so speculating in Wall Street is likely the least of their concerns.  The data on food stamp usage usually trails the current calendar date by one quarter.  The latest data we have is from December of 2010.  However, we are adding roughly 300,000 people per month to the food stamp program called SNAP.  If that is the case, as of today we now have 45,000,000 Americans participating in the food stamp program.  We’ve noted trends in the economy where people line up at mid-night during certain key dates in the month at Wal-Mart locations waiting for their debit cards to refill so they can purchase food for their families.

One of the troubling aspects of this recession is the hidden aspect of the financial pain that it is causing.  Many people have no idea their neighbor is in foreclosure until the home is taken back by the bank.  It is hard to see this in action and people don’t speak up because of embarrassment.  Also with the media thumping its chest about recovery many blame their own failings for their misery.  And with the movement of food stamps from embarrassing paper coupons to debit cards, many have no idea how many of their fellow Americans are receiving food assistance.  The debit cards blend in with most any other piece of plastic Americans carry in their wallets.   The reality however is that 14 percent of our entire population (man, woman, or child) is on SNAP.  There has been little stopping this trend.  And this is something that has been going on for well over a decade but not many were paying attention because of the massive credit induced housing bubble and the lack of a voice for this group:

Source:  SNAP

This is the highest percent of Americans on food assistance since the Great Depression when there was no food assistance early on aside from local charities.  Yet this is somehow an economic recovery.  A Wal-Mart executive was quoted as saying:

“(NY Times) There are families not eating at the end of the month,” said Stephen Quinn, executive vice president and chief marketing officer at Wal-Mart Stores, and “literally lining up at midnight” at Wal-Mart stores waiting to buy food when paychecks or government checks land in their accounts.”

Even in more affluent neighborhoods and in states like California where the impression is that everyone is flush with money food stamp usage is on the rise:

“(NC Times) More than 218,000 San Diego County residents were receiving food stamps as of mid-February, a whopping 70 percent increase from just two years ago.

Since January 2010, the number has gone up by about 49,040, county supervisors were told Tuesday as they adopted a 58-point blueprint to speed up delivery of food assistance.

The increase in recipients stems from a continuing sluggish economy and what managers of the county’s food stamp program and advocacy groups said are improvements in the application system that resulted from talks between the two.

“We’ve seen dramatic increases in demand,” said Dale Fleming, who oversees the food stamp program for the county. “We’ve also changed the way we do business.”

But despite the higher numbers, advocacy group representatives say the county still has a long way to go to make sure people aren’t going hungry.”

This trend hasn’t shown any signs of slowing down.  And this is also a reason dollar stores have done so well during this recession as people shift from wants to absolute necessities:

Family Dollar and The 99 Cent store are up 89 and 54 percent respectively in the last five years.  These dollar stores have also shifted the inventory they carry from random plastic goods to having much more food to reflect the needs of the community.  And many people who never thought about shopping frugally are now being forced to:

“(Sign on San Diego) John Sanchez had never stepped foot inside a dollar store until last April. That’s when he was laid off from his job and was forced to make some drastic budget cuts, including getting back to basics for a buck. Now, even though he’s returned to work, it’s hard to get him to shop anywhere else.

“I always thought dollar stores just sold junk and were for the really low-income (consumer). I was shocked when I saw that they sell a lot of the same stuff as the grocery store or drugstores. And it’s all just a dollar,” said the 61-year-old San Diego resident, as he exited the 99 Cents Only store in Clairemont pushing a cart filled with produce, bakery items, toiletries and a variety of cleaning products. “Why would anyone want to pay more for the same thing?”

Many working and middle class Americans are now confronting the realities of a shrinking middle class. Decades of complacency and Wall Street corruption and government assistance has allowed the core of our economy to be gutted out.  When does the media ever bring up the fact that 45 million Americans are on food assistance?  This is never brought up even though it truly reflects the health of our working class economy.  In other words, the media does not care about working and middle class Americans.  Many are owned by large corporations that want to continue selling the message that everything is fine and dandy.  If you really look at the data this recession is still going on even though it ended officially a long time ago.  Austerity is on the rise and it won’t be televised.

My Budget360

When Barack Obama, the Federal Reserve and the mainstream media tell us that we are in the middle of an economic recovery, is that supposed to be some kind of sick joke?  According to newly released numbers, over 44 million Americans are now on food stamps.  That is a new all-time record and that number is 13.1% higher than it was just one year ago.  So how many Americans have to go on food stamps before we can all finally agree that the U.S. economy is dying?  50 million?  60 million?  All of us?  The food stamp program is the modern equivalent of the old bread lines.  More than one out of every seven Americans now depends on the federal government for food.  Oh, but haven’t you heard?  The economy is showing dramatic improvement.  Corporate profits are up.  The stock market is soaring.  Happy days are here again.

It just seems inconceivable that anyone can claim that the economy is improving when the number of Americans on food stamps continues to set a brand new record every single month.  But the food stamp program is not the only indicator that the economy is still having massive problems.  The following are 10 more reasons why the U.S. economy is simply not getting any better….

#1 Some recent statistics actually indicate that the number of unemployed Americans is still going up.  According to Gallup, unemployment in the United States rose to 10.3% at the end of February.  That is the highest number Gallup has reported since early last year.

#2 The housing industry is still a complete and total disaster.  In fact, new home sales in the U.S. in January were 11.2% lower than they were in December.  Not only that, the number of new home sales in January was 18.6% lower than the number of new home sales in January 2010.  That is not a sign of improvement.

#3 There wouldn’t even be much of a housing industry at all at this point if it was not for the U.S. government.  Right now the U.S. government is either writing or guaranteeing well over 90 percent of all mortgages in the United States.  So what would the housing market look like in 2011 if the government was not in the picture?

#4 In 2010, more than a million U.S. families lost their homes to foreclosure for the first time ever, and that number is expected to go even higher in 2011.

#5 Due to rampant economic decay and record numbers of foreclosures there are areas in most of our major cities that now look like “war zones”.  For example, the Huffington Post is reporting that there are now approximately 15,000 vacant buildings in the city of Chicago and there are approximately 60,000 vacant houses and apartments in the city of Las Vegas.

#6 According to the Oil Price Information Service, U.S. drivers spent an average of $347 on gasoline during the month of February, which was 30 percent more than a year earlier.  This represented 8.5% of median monthly income.  So what is going to happen when gas prices go even higher?  Sadly, the average price of gasoline in the U.S. has risen another 4 cents since yesterday and it is likely to go much higher from here.

#7 The U.S. trade deficit continues to grow.  The trade deficit was about 33 percent larger in 2010 than it was in 2009, and the 2011 trade deficit is expected to be even bigger.

#8 The CredAbility Consumer Distress Index, which measures the average financial condition of U.S. households, declined in every single quarter in 2010.

#9 The number of Americans that have become so discouraged that they have given up searching for work completely now stands at an all-time high.

#10 The U.S. national debt is growing faster than ever.  The Obama administration is projecting that the federal budget deficit for this fiscal year will be a new all-time record 1.65 trillion dollars.  It is hard to even imagine how much money that is.  If you went out today and started spending one dollar every single second, it would take you over 31,000 years to spend one trillion dollars.  Long ago the U.S. government should have been getting these deficits under control, but instead they are just getting even larger.

So in light of the statistics above, can anyone really claim that we are in the middle of an economic recovery?

The truth is that there is no sign that any of the long-term trends that are destroying the U.S. economy are even slowing down.

Millions of jobs continue to be shipped overseas.

The U.S. dollar continues to be devalued.

The federal government continues to go into more debt.

State and local governments continue to go into more debt.

Our trade deficit continues to grow.

Our cities continue to be transformed into wastelands as they are being systematically deindustrialized.

The number of Americans that are dependent on the government continues to soar.

The U.S. middle class continues to shrink.

I know that I harp on these themes over and over, but it is vitally important that everyone understands that the mainstream media is lying to us.

The U.S. economy is dying a very painful death and there is no hope on the horizon.

Things are not going to be getting better.  Well, they may get a bit better for the boys down on Wall Street, but for the rest of us our standards of living are going to continue to decline.

The best days for the U.S. economy are already behind us.  What lies ahead is a whole lot of pain.

We are going to pay the price for decades of corruption and incompetence.

An economic collapse is coming and you had better get ready.

The Economic Collapse

JP Morgan is the largest processor of food stamp benefits in the United States.  JP Morgan has contracted to provide food stamp debit cards in 26 U.S. states and the District of Columbia.  JP Morgan is paid for each case that it handles, so that means that the more Americans that go on food stamps, the more profits JP Morgan makes.  Yes, you read that correctly.  When the number of Americans on food stamps goes up, JP Morgan makes more money.  In the video posted below, JP Morgan executive Christopher Paton admits that this is “a very important business to JP Morgan” and that it is doing very well.  Considering the fact that the number of Americans on food stamps has exploded from 26 million in 2007 to 43 million today, one can only imagine how much JP Morgan’s profits in this area have soared.  But doesn’t this give JP Morgan an incentive to keep the number of Americans enrolled in the food stamp program as high as possible?

There are just some things that are a little too “creepy” to be “outsourced” to private corporations.  The JP Morgan executive in the interview below does his best to put a positive spin on all this, but it just seems really unsavory for a big Wall Street bank to be making so much money off of the suffering of tens of millions of Americans….

So if unemployment goes down will this ruin JP Morgan’s food stamp business?

Well, apparently not.  In the interview Paton says that 40% of food stamp recipients are currently working, and he seems convinced that there could be further “growth” in that segment.

So is this what America is turning into?

A place where tens of millions of the unemployed and the working poor crawl over to Wal-Mart and the dollar store every month to use the food stamp debit cards provided to them by JP Morgan?

It turns out that JP Morgan also provides child support debit cards in 15 U.S. states and they also provide unemployment insurance benefit debit cards in seven states.

Apparently states have found that they can save millions of dollars by “outsourcing” the provision of these benefits to big financial firms like JP Morgan.

So what happens if you have a problem with your food stamp debit card?

Well, you call up a JP Morgan service center.  When you do this, there is a very good chance that you are going to be helped by a JP Morgan call center employee in India.

That’s right – it turns out that JP Morgan is saving money by “outsourcing” food stamp customer service calls to India.

When ABC News asked JP Morgan about this, the company would not tell ABC News which states have customer service calls sent to India and which states have them handled inside the United States….

JP Morgan is the only one today still operating public-assistance call centers overseas. The company refused to say which states had calls routed to India and which ones had calls stay domestically. That decision, the company said, was often left up to the individual states.

JP Morgan has been moving some of these call center jobs back inside the United States due to political pressure, but this whole situation is a really good example of what the “global economy” is doing to middle class Americans.

Just try to imagine the irony – a formerly middle class American that has lost a job to outsourcing calls up to get help with food stamp benefits only to be answered by a call center employee in India.

Welcome to the global economy, eh?

But wait, there is more.

It has just been announced that JP Morgan has admitted that they wrongly foreclosed on over a dozen military families and that they have been overcharging “thousands” of other military families on their mortgages.

Ouch.

It is a really bad public relations move to mess with military families.

Is anyone over at JP Morgan even paying attention?

JP Morgan has also been one of the primary financial institutions involved in the foreclosure “robo-signing” scandal.

They just seem to be having all kinds of problems lately.  But they are not alone.

The truth is that we have gotten to the point where big Wall Street banks such as JP Morgan, Goldman Sachs, Citibank and Morgan Stanley just have way, way too much power.

The biggest Wall Street financial institutions had no trouble begging for bailouts from the U.S. government during the financial crisis, but when the American people have needed a little grace and mercy from them they have been less than helpful.

So what do you think about how the big Wall Street banks have been behaving?   Join the conversation here:   DISCUSSION (registration required to post)

The Economic Collapse

With everyone chanting the praises of the “better than abysmal” economy, we decided to post a time lapse video (since cartoons are all that stand an even remote chance of attracting some attention) prepared by John Lohman, of just how the New Normal has been progressing, both since the starts of the great depression in December 2007, and more importantly, since the beginning of the “end” of the recession. The result may surprise you. As John points out: food stamps – the only thing keeping 43 million Americans from going postal.” Hopefully the end of extended unemployment benefits coming December 1 won’t be that first one additional straw on the camel’s back that leads to a full blown fracture.

ZeroHedge

The Invisible Recovery – 40,000,000 Americans Receiving Food Stamp Assistance – Since 2000 23 Million Americans have been added to the Food Assistance Program.

Posted by mybudget360

The latest food stamp data for January of 2010 shows that 39,430,724 Americans are receiving food stamps or are part of the supplemental nutritional assistance program (SNAP).  If you make the acronym and name long enough and with a neutral undertone average Americans won’t fret that 40 million of their fellow neighbors are one government debit card away from being unable to eat.  Yet this is the new corporate funded recovery and somehow things don’t seem to be improving for the middle class and definitely not for those at the lower rung of the socio-economic ladder.  In fact, we may have more than 40 million on food assistance today.  Since the start of the recession in December of 2007, we’ve added on average 474,000 people each month to SNAP.  Since the data lags a bit and we only have January 2010 data, it is likely we now have between 40 million and 41 million Americans on food assistance.

There is little to doubt where the trend is heading.  Even from 2000, this number has been increasing showing that the supposed boom was nothing more than smoke and mirrors fueled by Wall Street debt:

Source:  Food and Nutrition Service

You’ll notice that starting in 2000, the number of people on SNAP has gone up exponentially.  Last year the government provided $53 billion in food assistance (compare this to $17 billion in 2000, a tripling of cost in a decade).  Most of these Americans do not want to be on food assistance.  If anything, the above chart is a clear indicator of how the economy is feeling for millions outside of the Wall Street boom.  When we hear about thousands of people lining up at Wal-Mart just before midnight so they can enter and shop with their newly charged debit card, we know that something is amiss between Main Street and Wall Street.

Now some people would argue with the cost.  But $53 billion going to 40 million Americans makes more sense than giving a handout to Goldman Sachs just so they can increase their bonus pool.  Plus $53 billion is a drop in the bucket compared to the $13 trillion given to Wall Street.  You also have to remember that most of this money is being spent right back into the economy.  It isn’t like these folks are using the funds to pay for their Manhattan apartment or go purchase another yacht with the name of “Big Spender.”  On Wall Street all is well even though we are adding nearly a half million Americans each month to the food assistance program.  Apparently an economic recovery means a booming economy for everyone but the poor and middle class.

Since more and more Americans now use “food stamps” more stores are changing to adapt to this new economic reality:

“(Consumerist) We’re going to have to start offering tips for shopping with food stamps now that a record number of consumers —and stores— are using them.

EBT use has increased 20% from last year and formerly reluctant retailers like Costco are getting in on the action.

The cards are so “popular” that some retailers are crediting them with their “success” in the current economy.”

This is a large reason why stores like Wal-Mart have seen better performance during the recession.  You might not go to Circuit City (now gone) to buy a surround sound system but you’ll definitely go shopping for food for your family.  I’m not sure how we can say we are in a recovery with 40 million Americans on food assistance.

And of course, this is only the other end of the employment equation.  We have 16.9 percent of our population that is underemployed.  And many of the working poor are dealing with smaller paychecks but with higher taxes and fees thanks to crony banks and corrupt politicians:

“(Rolling Stone) If you want to know what life in the Third World is like, just ask Lisa Pack, an administrative assistant who works in the roads and transportation department in Jefferson County, Alabama. Pack got rudely introduced to life in post-crisis America last August, when word came down that she and 1,000 of her fellow public employees would have to take a little unpaid vacation for a while. The county, it turned out, was more than $5 billion in debt — meaning that courthouses, jails and sheriff’s precincts had to be closed so that Wall Street banks could be paid.

As public services in and around Birmingham were stripped to the bone, Pack struggled to support her family on a weekly unemployment check of $260. Nearly a fourth of that went to pay for her health insurance, which the county no longer covered. She also fielded calls from laid-off co-workers who had it even tougher. “I’d be on the phone sometimes until two in the morning,” she says. “I had to talk more than one person out of suicide. For some of the men supporting families, it was so hard — foreclosure, bankruptcy. I’d go to bed at night, and I’d be in tears.”

The recovery is invisible for the vast majority of Americans.  Most don’t derive their income from the Wall Street casino but from actual work.  They get their money from actually working instead of selling toxic investment products to siphon off money from the productive economy.  If we look at personal income the rate of change has fallen for decades but only this recession put us into the negative realm:

Until average Americans are protected from the Wall Street gamblers, we can expect this Brazilian split in America.  We used to have three economic classes; the poor, a large and healthy middle class, and a small elite.  Today, we are seeing the category of poor exploding while the middle class category shrinks and the wealthy remain the same but with more resources.  No wonder why this recovery is invisible to many.