Five years ago this week, one of the country’s largest investment banks went bankrupt. With the bursting of the “housing bubble,” Lehman Brothers’ risky financial escapades put not just them but the entire US economy on the brink of collapse. Credit markets seized up, policymakers were panicked, the stock market was plummeting, and other big banks feared mass withdrawals would leave them ruined as well.
That month, 117,373 people in
Five years ago, the economy was in free fall, with monthly job
losses for September at 432,000 growing to a total of 6.8 million by the end of
2009.
One result of the collapse in jobs and earnings, of course,
was collapsing tax revenue. The Federal government’s income plummeted by more
than $400 billion from 2008 to 2009. (It did not recover to pre-recession
levels until this year.)
Nevertheless, in response to the massive economic emergency,
the federal government had to increase its spending: big bailouts of banking
and insurance giants- to protect the
financial system from even greater disaster; Recovery Act spending to avoid a massive economic depression; automatic
increases in programs like Unemployment compensation, Food Stamps, and Medicaid
as the number of eligible people in need grew at an unprecedented rate.
Yet many leading economists like Nobel-prize winner Paul
Krugman said the government wasn’t spending enough. More was needed to help
those on Main St. ,
not just Wall St . They predicted, amid the rightwing shrieks of “won’t somebody think of the
deficit?!” that a gradual, lukewarm, and incomplete recovery would follow.
He was right. Today, Gross Domestic Project has fully recovered, General Motors ($1.4 billion in profits last quarter) and Bank of America ($3.6 billion in profits for Q2 of 2013, up 63% from the year before) have recovered, the stock market has recovered. Even the federal budget is recovering, with the deficit expected to fall by about half this year. But poverty has not.
He was right. Today, Gross Domestic Project has fully recovered, General Motors ($1.4 billion in profits last quarter) and Bank of America ($3.6 billion in profits for Q2 of 2013, up 63% from the year before) have recovered, the stock market has recovered. Even the federal budget is recovering, with the deficit expected to fall by about half this year. But poverty has not.
According to the most recent data available, 6.2 million
more Americans were living in poverty in 2012 than in 2008.
So, yes, food stamp participation and spending are up. And
that’s the part that Eric Cantor and most Congressional Republicans are so
angry about. “Spending is out of control!” “The safety net has become a hammock!”
“$20 billion in food stamp cuts aren’t nearly enough!”
Yesterday in the House of Representatives, a narrow majority
consisting entirely of Republicans passed the second half of the Food and Farm bill that, if approved by the
Senate, would kick an estimated 3.8 million people off food stamps. An
estimated $40 billion would be “saved” by taking food out of the mouths of
hungry Americans. Hundreds of thousands of children could also lose their free
school meals. The law imposes “work requirements” on the small segment of recipients who are the able-bodied unemployed, but offers them
no help in finding jobs or in creating new jobs for them to find.
The Senate, which passed “only” $4.5 billion in SNAP cuts in their
version of the bill, won’t likely approve ten times that amount, but now the negotiation
begins far further to the right, increasing the likelihood of harsher measures
and further cuts, or of no new Food and Farm Bill at all.
The House is leading the country over a cliff. Its leaders
clearly have no real plan to reduce poverty; only to reduce help to people in
poverty. They steadily and insistently march us towards austerity,
balanced-budgets, tax cuts, and cuts to government spending – strategies that
have failed to improve tough economic conditions over and over and over again
in modern history and across the globe.
The House leadership argues that because the hedge fund
managers and Wall Street financiers that CAUSED the great recession have recovered, the victims of the recession – without economic shelter when the sky
fell - must have recovered too. Those 6.2 million more poor people should just
“go get a job.” Unemployment has fallen slightly to 7.3%, but those same
Republicans are only too happy to crow that the drop isn’t due to more jobs but
to more people utterly discouraged about finding work. “Thanks, Obama!”.
So which is it? The economy is still in a tailspin, or the
poor are lazy? Only the wealthy have recovered, or the poor are lazy? Most new
jobs pay poverty wages, or the poor are lazy? We’ve shredded the social safety
net, unions, and our public schools, or the poor are lazy?
The facts are clear, but whatever you choose to believe, say no to food
stamp cuts. Enough bullying of working families, children, the elderly, and the
disabled. The smartest way to reduce long-term spending on food stamps is to
reduce the need – to reduce poverty and inequality. We have the means and we
have the wealth, but Congress has neither the compassion nor the will to help
those in need.
Get involved. Raise your voice. Tell Congress it’s time for a new
direction.
--Ken Regal, Executive Director
--Ken Regal, Executive Director
Statewide total benefits in April went up more than $28,000,000 thanks mostly to the benefits increase (and slightly to the increasing number of recipients.) Allegheny County recipients shared more than $16,000,000 in food stamps in April, up $2.7 million from March 2009.
