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Americans On Foodstamps Hits New Record In August, Increase By Over Half A Million To 42.4 Million, 17% Increase Year Over Year
Submitted by Tyler Durden on 11/05/2010 08:51 -0500
Fail Recession Unemployment Unemployment Benefits
Another highlight you may not hear in the President's address from this morning: according to the last Department of Agriculture update, Americans on foodstamps has increased by over half a million in August, hitting a fresh all time high of 42.4 million people relying on the government for basis sustenance. At least now we know where that labor force is going. The August number is a 17% rise from the same time a year ago. That number is up 58.5% from August 2007, before the recession began.
As the WSJ reports:
By population, Washington, D.C. had the largest share of residents receiving food stamps: More than a fifth, 21.1%, of its residents collected assistance in August. Washington was followed by Mississippi, where 20.1% of residents received food stamps, and Tennessee, where 20% tapped into the government nutrition program.
Idaho posted the largest jump in recipients in the past year. The number of people receiving food stamps climbed 38.8% but their rolls are still fairly low. Just 211,883 Idaho residents collected food stamps in August.
The average benefit size per person nationwide in August was $133.90. Per household it was $287.82.
Food stamps have become a lifeline for workers who have lost their jobs, particularly among the growing share of unemployed Americans who have also exhausted their unemployment benefits. Lines at grocers at midnight on the first of the month have signaled that, in many cases, those benefits aren’t tiding families over and they run out before their next check kicks in.
Even during the summer children returned to schools to take advantage of free lunch programs where they were available. Nearly 195 million lunches were dished out in August and 58.9% of them were free. Another 8.4% were available at reduced prices. That number will surge when the fall data are released because children will be back in school. Last September, for example, more than 590 million lunches were served, nearly 64% of which were free or reduced price.
Children whose families have incomes at or below 130% of the poverty level — $28,665 for a family of four — can access free meals. Those families earning between 130% and 185% of the poverty level — $40,793 for a four-person family — are eligible for reduced-price meals that can’t cost more than 40 cents.
We also fail to see just what Fed-induced wealth effect these 42.4 million Americans will receive courtesy of the Fed's generosity targetting Wall Street, corporate insiders, and nobody else.
How Ben Bernanke Sentenced The Poorest 20% Of The Population To A Cold, Hungry Winter
Submitted by Tyler Durden on 11/05/2010 16:40 -0500
Ben Bernanke BLS Bureau of Labor Statistics Core CPI CPI
The following chart prepared recently by JPMorgan demonstrates something rather scary, and makes it all too clear how the Chairman's plan to "assist" the US population via some imaginary "wealth effect" due to QE2, is about to backfire. As is now becoming very evident, the prices of energy and food products are about to surge, and in many cases have already done so, but courtesy of some clever gimmicks (Wal Mart selling what was formerly 39 oz of coffee as a 33.9 oz product for example) the end consumers haven't quite felt it yet. They will soon. There is a limit to how much every commodity can open limit up before it appears on the SKU price at one's local grocer. And while a marginally declining "core CPI" is irrelevant for this exercise as it measures only items that are completely outside of the scope of everyday life, what will be far more important to end consumers will be the push higher in food and energy costs. The problem, however, is that for the lowest 20% of Americans, as per the BLS, food and energy purchases represent over 50% of their after-tax income (a number which drops to 10% for the wealthiest twenty percentile). In other words should rampant liquidity end up pushing food and energy prices to double (something that is a distinct possibility currently), Ben Bernanke may have very well sentenced about 60 million Americans to a hungry and very cold winter, let alone having any resources to buy trinkets with the imaginary wealth effect which for over 80% of the US population will never come.
Here is how JPM explains the phenomenon:
When the Fed considers the possible consequences of a falling dollar resulting from QE2, it should perhaps focus on food and energy prices as much as on traditionally computed core inflation. First, the food/energy exposures of the lower 2 income quintiles are quite high (see chart). Second, the core CPI has a massive weight to “owner’s equivalent rent”, which suggests that the imputed cost of home occupancy has gone down. Unfortunately, this is not true for families living in homes that are underwater, and cannot move to take advantage of it (unless they choose to default and bear the consequences of doing so). Due to the housing mess, there has perhaps never been a time when traditionally computed core inflation as a way of measuring changes in the cost of things means less than it does right now.
Since nothing else appears to have jarred America from its prime time TV/iPad hypnosis yet, perhaps this is for the best, and a few hungry months in subzero temperatures is precisely what several tens of millions of Americans need to finally march on Constitution avenue.
Two million people to lose jobless benefits in December
May come up for legislative attention during lame-duck Congress
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Inflation, but not for home prices (Nov. 5)
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WASHINGTON (MarketWatch) — About 2 million long-term jobless workers could lose eligibility for unemployment-insurance payments by the end of the year due to the expiration of federal funding.
A special extended-benefits program that relies on federal funds will start shutting down later this month. There’s little time to work on legislation to extend the program during the lame-duck session in Congress, and passage of additional benefits would likely be even tougher once Republicans assume majority status in the House of Representatives starting in January.
A spokeswoman for Senate Majority Leader Harry Reid, of Nevada, said there’s a long list of “things to do and not a lot of time to do them” during the lame-duck session, scheduled to convene Nov. 15.
“While a short-term extension into 2011 is very possible, a long-term extension appears more difficult, and could happen only if an agreement on a tax-cut extension can also be reached,” Goldman Sachs analysts wrote in a research note.
President Barack Obama called for a White House meeting with the majority and minority leaders of the two houses of Congress on Nov. 18, to discuss potential areas for moving legislation forward, including taxes. See more on post-election political maneuverings.
Currently, about 5 million people collect extended federal benefits. Without an extension eventually all of those who receive benefits through the special federal extensions will lose those benefits.
According to Friday’s Labor Department report detailing unexpectedly strong growth in nonfarm payrolls and a 9.6% jobless rate for October, about 6.2 million people — some 42% of all unemployed workers — have been out of work for more than six months. There are about 14.8 million people who are unemployed. Read more about payrolls.
Earlier this week, Obama said it makes sense to extend unemployment insurance because “there are still a lot of folks out there hurting.”
Obama continued: “So there are some things that we can do right now that will help sustain the recovery and advance it, even as we’re also sitting down and figuring out, OK, over the next several years what kinds of budget cuts can we make that are intelligent, that are smart, that won’t be undermining our recovery but, in fact, will be encouraging job growth.”
Senate Minority Leader Mitch McConnell.
In the past, Republicans have pushed back on extending unemployment insurance benefits. In a speech Thursday, Senate GOP Leader Mitch McConnell, of Kentucky, while not specifically discussing unemployment insurance, did say that Republicans “will loudly oppose future stimulus bills that only stimulate the deficit, and fight any further job-killing regulations.”
Weekly unemployment insurance benefits are intended to replace a portion of a worker’s income so families can eat and make their mortgage payments, among other basics. The payments are an effective way to stimulate the economy because the unemployed are likely to quickly spend their cash, thereby supporting demand, economists say.
President Barack Obama, during a post-election news conference at the White House on Wednesday.
New analysis from the Economic Policy Institute indicates that continuing extensions through 2011 would cost about $65 billion but would increase gross domestic product by about $105 billion, translating to about 488,000 payroll jobs.
“Extending the federally funded unemployment insurance extensions through 2011 would not only be a lifeline to the families of millions of unemployed workers, it also supports spending responsible for the existence of nearly half a million jobs,” according to the EPI report.
In the hardest-hit states, beneficiaries can receive unemployment insurance for up to 99 weeks.
The first 26 weeks are from regular state unemployment insurance benefits. For those who exhaust regular state payments the special, federally funded programs can add up to an additional 73 weeks. Read the Labor Department’s description of programs.
The week ending Nov. 20 is the last week that claimants who have exhausted the normal 26 weeks of regular state benefits can establish eligibility for special federally funded benefits. The week ending Nov. 27 is the last week that claimants already in the federal emergency program can establish eligibility to continue receiving benefits. The Labor Department estimates that 1.98 million claimants will be impacted through the end of the year by a delay in extending special federal programs. View Labor Department estimate.
“There’s absolutely a need for a vote on an extension during the short session after the election,” Andrew Stettner, deputy director of the National Employment Law Project, wrote in an email. “With all the indicators that the unemployment rates are going to be high through 2011, we think that they should suck it up and take care of the extension through the end of next year.”