[Marxism] The Great Depression?

[Louis Proyect]

Independent.co.uk
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

By David Usborne in New York
Tuesday, 1 April 2008

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.