USA 2008: The Great Depression??

USA 2008: The Great Depression

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


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 per cent increase in the past year.

In Rhode Island, the segment of the population on food stamps has risen by 18 per cent 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 per cent 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 per cent.

Brit paper- The Independent
By David Usborne in New York
Tuesday, 1 April 2008

Maybe this was an April Fools Joke from the fed.

Exactly!

Another issue to remember when it comes to the Great Depreession is that our population back then was far more able to provide for themselves in terms of gardening, hunting, etc. I believe that around 70% of the people then were involved in some kind of farming or agriculture, now its less than 5%. That means a depression of similar scope would have a far more devastatinfg impact on the majority of people.

People were tougher back then,hardened. Today spoiled and not acustom to the old "back to basics" way of living..

For the 3rd. time, EXACTLY!

Same here! It's just getting a bit more crowded around here now. When 911 happened a lot of city folk moved up here. I lost one of my nice hunting spots due to that.

Well...if both hit, the depression and pandemic? There will be plenty hunting grounds opened up for sure! Keep your guns oiled, and your arrows sharp! And keep on prepping. Right now? I'm looking for someone to roto till my space I've set aside for my garnden, I'm not 25-30 anymore and it would kill me now to turn it by hand ;P

quietprepr wrote: Much like pandemic flu, I hope a depression does not happen, but it is certainly possible. One major thing that accelerated the depression was people borrowing money to speculate on stocks. It drove the market to heights that were not sustainable and when the margin calls started to come in people who had borrowed money to gamble on stocks could not pay. This time its the banks that gambled. They gambled on the subprime mortgages and then the margin calls started and the multi-billion dollars losses began. They took so many different loan products with varying degrees of risk and packaged them together so many times that eventually it became impossible to tell what investments had high risk. Where I live many homes are now foreclosed and on the market for 50% less than they were 2 years ago. In a few cases I have seen drops of more than 50%. A house I sold for $405,000 in 2005 is on the market right now for $219,000 and there are no takers. My advice is to keep prepping. If there is a depression or BF, you will be prepared just the same.

InTheSticks, I don't think the banks are going to start failing until some other shoe drops.

With the US population being close to 304 million people and almost 10% on food stamps, and a record # of people signing up every month, something has got to break. Either it's the economy or the government. We can't sustain this kind of support for very long. In the "great depression" as my grandma used to say, the people who were in rural areas, farmers and people who knew how to garden, sew, raise chickens,can etc. were the ones who faired the best. It's the old grasshopper and ant story all over again. You have to learn to work and take care of your needs and not wait for some government to do it for you. You've got to prepare for what is bound to come sooner or later.

hachiban08 wrote: If there was a depression, what would happen? would it just effect mainly ppl with stocks?-

When people get hungry enough they sooner or later start eating each other. It wouldn't be the first time it ever happened!

Is that what you deleted?
Hey rockhound, are you a rockhound? What part of the US are you in?

LaRo wrote: We are a long way from a depression.  We might have hyper inflation which will certainly wreck havock in the ecnonmy, but i really don't look for a depression.  Most everything will work itself out, we go thru this every now and then.  The government is doing everything under the sun to keep things as normal as possible.  The worst times we will see in the future will be just after the new administartion takes office.  Until then, we'll just muddle along.

Yes, how could you not believe Ted Turner said that! He was once married to Hanoi Jane, so that tells you how dumb he is! LOL

The economy is very fragile at this time and we could see some very tough times ahead.  Just watch the business world and you can tell in a hurry how soon things will really unwind.  So far it's been kind of slow,  A few Hedge Funds, Bear Sterns, some air lines going belly up,  North Rock in England, A couple banks in Germany, One in Switzerland, a hedge fund in Australia, a large bank in France in deep dodo, the dollar getting ready to take a fall, the federal reserve pumping around 100 billion dollars into the economy every week.  (they are doing it thru loans to wall street banks),  Citicorp with a big write  down, countrywide almost folding, many small loan orrigionators going under, las vegas visitors below average, people getting layed off by the thousands, actually when i put it all in writing, things don't look good at all, but I think it will be getting a lot worse.

Ted Turner is somehow now an expert of all things weather related!?! WOW!