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USA 2008: The Great Depression

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    Message 1 of 1 , Apr 1, 2008
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      NHNE Wavemaker News List
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      Monthly Supporters: 77
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      USA 2008: THE GREAT DEPRESSION
      By David Usborne in New York
      The Independent
      Tuesday, April 1, 2008

      http://www.independent.co.uk/news/world/americas/usa-2008-the-great-depressi
      on-803095.html

      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.

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