Paul Craig Roberts Warns "Without Glass-Steagall, America Will Fail"
ZeroHedge.com Jun 13, 2017 10:45 PM
Authored by Paul Craig Roberts,
For 66 years the Glass-Steagall act reduced the risks in the banking system. Eight years after the act was repealed, the banking system blew up threatening the international economy. US taxpayers were forced to come up with $750 billion dollars, a sum much larger than the Pentagon’s budget, in order to bail out the banks. This huge sum was insufficient to do the job. The Federal Reserve had to step in and expand its balance sheet by $4 trillion in order to protect the solvency of banks declared “too big to fail.”
The enormous increase in the supply of dollars known as Quantitative Easing inflated financial asset prices instead of the consumer price index. This rise in bond and stock prices is a major cause of the worsening income and wealth distribution in the United States. The economic polarization has undercut the image and reality of the US as a land of opportunity and has introduced political and economic instability into the life of the country.
These are huge costs and for the benefit only of the rich who were already rich.
So, what we can say about the repeal of Glass-Steagall is that it turned a somewhat egalitarian democracy with a large middle class into the One Percent vs. the 99 percent. The repeal resulted in the destruction of the image of the United States as an open prosperous society. The electorate is very much aware of the decline in their economic situation, and this awareness expressed itself in the last presidential election.
Americans know that the nonsense from the US Bureau of Labor Statistics about a 4.3% unemploment rate and an abundance of new jobs is fake news. The BLS gets the low rate of unemployment by not counting the millions of discouraged workers who cannot find employment. If you haven’t looked for a job in the last 4 weeks, you are not considered unemployed. The birth/death model, a purely theoretical construct, accounts for a large percentage of the non-existent new jobs. The jobs are there by assumption. The jobs are not really there. Moreover, the replacement of full time jobs with part time jobs proceeds. Pension and health care benefits that once were a substantial part of the pay package are being terminated.
It makes perfect sense to separate commercial from investment banking. The taxpayer insured deposits of commercial banking should not serve as backing for investment banking’s creation of risky financial instruments, such as subprime and other derivatives. The US government understood that in 1933, but no longer did in 1999. This deterioration in government competence has cost America dearly.
By merging commercial banking with investment banking, the repeal of Glass-Steagall greatly increased the capability of the banking system to create risky financial instruments for which taxpayer backing was available. So, we have the extraordinary situation that the repeal of Glass-Steagall forced the 99 percent to bail out the One Percent.
The repeal of Glass-Steagall has turned the United States into an unstable economic, political, and social system. We have a situation in which millions of Americans who have lost full time employment with benefits to jobs offshoring, whose lower income employment in part time and contract employment leaves them no discretionary income after payment of interest and fees to the financial system (insurance on home and car, health insurance, credit card interest, car payment interest, student loan interest, home mortgage interest, bank charges for insufficient minimum balance, etc.), are on the hook for bailing out financial institutions that make foolish and risky investments.
This is not politically viable unless Congress and the President are going to resign and turn over the governance of America to Wall Street and the Big Banks. A growing cresendo of voices are saying that this has already happened.
So, where is there any democracy when the One Percent can cover their losses at the expense of the 99 Percent, which is what the repeal of Glass-Steagall guarantees?
Not only must Glass-Steagall be restored, but also the large banks must be reduced in size. That any corporation is too big to fail is a contradiction of the justification of capitalism. Capitalism’s justification is that those corporations that misuse resources and make losses go out of business, thus releasing the misused resources to those who can use them profitably. Capitalism is supposed to benefit society, not be dependent on society to bail it out.
I was present when George Champion, former CEO and Chairman of Chase Manhattan Bank testified before the Senate Banking Committee against national branch banking. Champion said that it would result in the banks becoming too large and that the branches would suck savings out of local communities for investment in traded financial assets. Consequently, local communities would be faced with a dearth of loanable funds, and local businesses would die or not be born from lack of loanable funds.
I covered the story for Business Week. But despite the facts as laid out by the pre-eminent banker of our time, the palms had been greased, and the folly proceeded.
As Assistant Secretary of the US Treasury in the Reagan Administration, I opposed all financial deregulation. Financial deregulation does nothing but open the gates to fraud and sharp dealing. It allows one institution, even one individual, to make a fortune by wrecking the lives of millions.
The American public is not sufficiently sophisticated to understand these matters, but they know when they are hurting. Few in the House and Senate are sufficiently sophisticated to understand these matters, but they do know that to understand them is not conducive to having their palms greased. So how do the elected representatives manage to represent those who vote them into office?
The answer is that they seldom do.
The question before Congress today is whether they will take the country down for the sake of campaign contributions and cushy jobs if they lose their seat, or will they take personal risks in order to save the country.
America cannot survive if excessive risks and financial fraud can be bailed out by taxpayers.
US Representatives Walter Jones and Marcy Kaptur and members of the House and staff on both sides of the aisle, along with former Goldman Sachs executive Nomi Prins and leaders of citizens’ groups, have arranged a briefing in the House of Representatives on June 14 about the importance of Glass-Steagall to the economic, political, and social stability of the United States. Let your representative know that you do not want the financial responsibility for the reckless financial practices of the big banks. Let your representative know also that you do not want big banks that dominate the financial arena. Let them know that you want the return of Glass-Steagall.
The effort to reduce the financial risks arising from the commingling of commercial and investment banking by requiring stronger capital positions of financial corporations is futile. The 2007-08 financial crisis required the taxpayers and the printing press and an amount of money that exceeded any realistic capital and liquidity requirements for financial institutions.
If we don’t re-enact Glass-Steagall, the risks taken by financial greed will complete the economic destruction of America.
Congress must serve the people, not Mammon.
The Disturbing Trend That Will End In A Full-Fledged Pension Crisis
ZeroHedge.com Jun 14, 2017 5:00 AM
Authored by Shannara Johnson via HardAssetsAlliance.com,
Some experts think it will be the trigger for the next financial collapse. Others call it a “national crisis” of unprecedented proportions.
But what all of them agree on is that there’s no way US pension funds can keep their promises to the next wave of retirees.
Right now, millions of Americans are hard at work believing their pensions will be their saving grace for retirement. But the predicament pension funds across the United States find themselves in does not just spell trouble for the distant future.
The crisis is happening as we speak.
Though the challenges are well known by now, many believe that public-sector pension funds will be maintained and the gaps filled by strong investment returns, increasing employee contributions, raising taxes, or some combination of the three. They hope with these measures and ongoing strong asset returns, liabilities can be reduced and pensions salvaged. Unfortunately, this is wishful thinking at best.
Even though the facts are on the table, state and local governments continue to underestimate the crisis at hand. According to Hidden Debt, Hidden Deficits, a 2017 data-rich study of US pension systems by Hoover Institution Senior Fellow Joshua Rauh, almost every state or local government has an unbalanced budget - due to runaway pension fund costs that are continually chipping away at already inadequate budgets.
In 2016, Rauh stated, “while state and local governments across the US largely claimed they ran balanced budgets, in fact they ran deficits through their pension systems of $167 billion.” That amounts to 18.2% of state and local governments’ total tax revenue.
According to the 2017 report, total unfunded pension liabilities have reached $3.85 trillion. That’s $434 billion more than last year. Amazingly, of that $3.85 trillion, only $1.38 trillion was recognized by state and local governments.
The difference between funded levels under Governmental Accounting Standards Board (GASB) metrics and more realistic expectations reveals a massive amount of “hidden debt,” commonly referred to as unfunded liabilities. Under GASB metrics, public pension systems assume they will see annual returns of 7.5%. This assumption ignores the increased risks associated with stocks, hedge funds, real estate, and private equity to realize these returns.
Using that 7.5% annual return, unfunded liabilities for city and state plans are $1.38 trillion. However, when we use a more conservative return of 2.8% based on the Treasury yield curve, unfunded liabilities balloon to $3.85 trillion. Realistically, the truth probably lies somewhere between these two numbers, which still results in a huge increase in unfunded liabilities.
An Alternative Approach
Massive financial market losses in 2000–2001 and 2008–2009 led many pension funds to invest in high-fee and higher-risk alternatives such as hedge funds and private equity. But this strategy only exacerbated the funding gap over the past decade, failing to deliver expected returns.
The California Public Employees’ Retirement System (CalPERS) is one of the largest public pension funds with over $300 billion in assets and nearly 2 million members. After years of poor performance—including a meager 0.6% net return in the most recent fiscal year—the fund is now embracing a lower-cost, diversified investment approach, including exposure to gold.
Failing to meet its 7.5% return objective for several years, CalPERS recently has adopted a “Funding Risk Mitigation” strategy to meet the challenges of a maturing workforce, negative cash flow, longer life expectancies, and underperforming investments.
The facts clearly show that the states’ pension systems are on a losing track and retiree benefits are at risk of being slashed.
South Carolina: Canary in the Coal Mine
The looming pension fund crisis could leave already cash-strapped Americans without a safety net for retirement.
Take South Carolina, whose government pension plan covers around 550,000 individuals. One out of nine residents are invested in the plan… which is $24.1 billion in debt.
According to the Post and Courier of Charleston, government workers and their employers have seen five hikes in their pension plan contributions since 2012, and there’s no end in sight. And this isn’t an anomaly but the norm for many states throughout the country.
The worst-funded US state is currently New Jersey, closely followed by Kentucky and Illinois. By the end of 2016, New Jersey had a $135.7 billion deficit in its pension funds—$22.6 billion more than the year before—while Illinois’ gap grew by $7.6 billion.
This disturbing trend is all too real, with nearly one million US workers and retirees covered by pension plans on the verge of collapse. As GDP growth remains minimal, the situation is less than ideal for those who are depending on these pensions for their golden years. And with the uncertain future of Social Security and Medicare hanging in the balance, it’s a scary thought that for many Americans, even this promised safety net isn’t guaranteed.
Corporate pensions, too, are “in the worst position to meet obligations in more than a decade,” states a recent Bloomberg article. Suffering from deficits due to an overallocation to long-term bonds with diminishing yields, corporate pensions are struggling to meet their ever-increasing obligations.
Demographics Don’t Help
Shifting demographics in the US and around the world only further complicate the pension crisis. We are living longer and experiencing lower birth rates than in past decades. This dilemma increases the number of retirees while decreasing the pool of workers. The population of Americans 65 years of age and older has grown by 35% over the last 50 years.
Americans born in 2010 can anticipate to live nine years longer than those born in 1960. Today, retirees are collecting pensions for up to 20 years. If the well runs dry, Social Security, at this point, is not the answer. This leaves Millennials and Gen-Xers in a financial bind. Even those who aren’t in line to receive a pension will be affected indirectly by the falling value of retirement assets worldwide.
Crisis Insurance for the “Golden Years”
As governments and corporate employers may no longer be able to step up to their promises, it is important to take your retirement savings into your own hands. A strong portfolio should include a mix of stocks, solid funds, and physical precious metals.
For many centuries, hard assets like gold have preserved wealth and will undoubtedly continue to do so. Unlike the dollar, stocks, bonds, or pension funds, gold is an asset without counterparty risk, that means its value doesn’t depend on someone else’s ability or willingness to keep their promises.
Financial professionals often advise investors to hold 5% to 15% of their investable assets in gold bullion—depending on age, risk tolerance, and available cash flow.
With the current state of pension plans in steady decline, now is a good time to consider hard and secure assets like precious metals.
Debt-Based Money Corrodes Society
Jun 11, 2017 4:00 PM
Authored by Brian Maher via The Daily Reckoning,
We open today’s reckoning with a hypothesis:
The current monetary system debauches the culture.
Long-suffering readers are familiar with our… diminished regard for paper money.
Paper money — or digital money nowadays — is the great bogeyman of the boom/bust cycle. It inflates bubbles of every model and make.
Meanwhile, paper money fuels big government… as oxygen fuels fire.
But paper money’s effects on the culture?
“It has a very important impact on our culture,” writes economist Jorg Guido Hulsmann.
Under “natural money” like gold Hulsmann explains, prices tend to fall over time.
So natural money encourages the virtues of saving… thrift… deferred gratification. It sets the mind to the future:
In a free economy with a natural monetary system, there is a strong incentive to save money… Investments in savings accounts or other relatively safe investments also play a certain role, but cash hoarding is paramount.
Before the 20th century, explains Hulsmann, debt was a cultural taboo… a big scarlet “D.”
Credit for households was virtually unknown, he says. And only the poorest households resorted to debt-financed consumption.
Ah, but then the 20th century came along with its wars… its social movements… and its cranks…
Gold is a famously uncooperative agent of change.
It resists social uplift, in the same way an old man resists a new pair of shoes.
It turns away from the sound of trumpets.
“You go over there,” gold says. “I’m staying here.”
“The trouble with gold is that it turns its back on world improvers, empire builders and do-gooders,” wrote Bill Bonner and our leader Addison Wiggin in Empire of Debt.
“The nice thing about gold is that it is so unresponsive,” they continued. “It neither laughs nor applauds.”
And that’s why it couldn’t last…
Only a debt-backed system of paper money could finance the great wars, the social improvements and the fevered dreams of the 20th century.
But the same debt-based money also seeped its way into the cultural marrows… got into the bloodstream… and went to work…The slow grind of saving yielded to lure of the fast buck. Hulsmann says it all encouraged a short-term perspective.
“Fiat-money systems tend to make people insatiable in their quest for ever higher monetary returns on their investments,” Hulsmann notes.
Hurry, hurry, hurry. More, more, more.
Hulsmann argues things work differently under a natural monetary system.
As savings increase under such a system, the return on investments of all sorts tends to diminish.
And instead of chasing rainbows, people direct their monies in pursuit of other worthwhile interests, including philanthropy: It becomes ever less interesting to invest one’s savings in order to earn a return, and thus other motivations shift into the foreground. Savings will be used increasingly to finance personal projects including the acquisition of durable consumers’ goods, but also philanthropic activity. This is exactly what we saw in the West during the nineteenth century.
“By contrast,” Hulsmann adds,”in a fiat money society you are more likely to increase your returns by remaining in debt and continuing to chase monetary revenue indefinitely by leveraging more and more funds.”
The debt-soaked society loses something of the human face perhaps. He concludes:
You can imagine, then, how this inflation and debt-based system, over time, will begin to change the culture of a society and its behavior.
We become more materialistic than under a natural monetary system. We can’t just sit on our savings anymore, and we have to watch our investments constantly, and think about revenue constantly, because if it is not earning enough, we are actively getting poorer.
A point to ponder of a June day…
We don’t argue of course that a restoration of sound money would turn every heart to gold.
But it seems this Hulsmann has hooked onto something here. Maybe our paper money system has not only debased our economy and our politics… but also our culture.
And maybe our socially inclined money… has somehow made us less social…
Moody's: Number of distressed retailers tops total during financial crisis
Kevin McCoy , USA TODAY Published 5:00 a.m. ET June 9, 2017 | Updated 3 minutes ago
For decades, Americans have loved to shop at malls. But now, the industry as a whole is taking a bit hit.
The list of U.S. retailers with troubled financials that could make them potential bankruptcy risks now totals 22, according to ratings by Moody's Investors Service — topping the 19 recorded at the peak of the Great Recession.
Confronting a major shift to online shopping Sears Holdings, Neiman Marcus Group and others on the list face a "perfect storm," senior Moody's retail analyst Charles O'Shea said Thursday, as he invoked the name of the Massachusetts fishing boat lost with all hands in a 1991 tempest. The disaster, chronicled by author Sebastian Junger, was later made into a movie featuring actors George Clooney and Mark Wahlberg.
"You're on the Andrea Gail right now, and the water's starting to get very choppy," O'Shea said of the financial conditions buffeting troubled retailers. And the worst could be yet to come. The ranks of distressed firms and retail sector defaults are likely to grow during the next 12 to 18 months, the rating agency predicted in a separate report issued Wednesday.
Nonetheless, the companies on the distressed list represent just 16% of the retailers analyzed by Moody's. "The majority of retailers remain fundamentally healthy," O'Shea said in a statement issued with the report.
The rating giant tapped companies for inclusion on the list based on an analysis of their financial liquidity, ability to manage maturing debt by refinancing, credit profiles, competition challenges, ownership, and management structure.Those that rank low in multiple categories were given Caa ratings, which O'Shea characterized as "deep junk." "When you're down there in C-a land, bankruptcy is a real possibility," he said.
Although it is impossible to predict the financial future of the companies, an earlier Moody's list of distressed retailers issued in March proved prophetic in a few cases. Discount footwear company Payless ShoeSource and Rue21, a teen fashion retailer, have since filed for bankruptcy court protection. Gymboree, a specialty seller of children's apparel, missed a June 1 interest payment on senior notes due in 2018.
Companies tagged with a Caa rating by Moody's can and do get higher ratings if their liquidity, debt management or other financial metrics improve. "There are companies that come out of that," said O'Shea, who noted that iconic retailer J.C. Penney "was down there, and is now out," with an improved rating.
Retailers rated Ca or lower by Moody's:
Boardriders SA - sporting subsidiary of Quiksilver
The Bon-Ton Stores - parent of department store chain
Fairway Group Holdings - food retailer
Tops Holding II - supermarket operator
99 Cents Only Stores - discount retailer
TOMS Shoes - footwear company
David's Bridal - wedding dresses and formalwear seller
Evergreen AcqCo 1 LP - parent of thrift chain Savers
Charming Charlie - women's jewelry and accessories
Vince LLC - clothing retailer
Calceus Acquisition - owner of Cole Haan footwear firm
Charlotte Russe - women's clothing
Neiman Marcus Group - luxury department store
Sears Holdings - owner of Sears and Kmart.
Indra Holdings - holding company owner of Totes Isotoner
Velocity Pooling Vehicle - does business as MAG, Motorsport Aftermarket Group
Chinos Intermediate Holdings - parent of J. Crew Group
Everest Holdings - manages Eddie Bauer brand
Nine West Holdings - clothing, shoes and accessories
Claire's Stores - accessories and jewelry
True Religion Apparel - men's and women's clothing
Gymboree - children's apparel
5 Trends That Are Destroying The Middle Class In America
ZeroHedge.com Jun 7, 2017 4:25 PM
Authored by Michael Snyder via The American Dream blog,
The middle class in America has been shrinking for decades, and our leaders seem powerless to do anything about it. Two years ago, the middle class became a minority in this country for the first time ever. In other words, the middle class now accounts for less than 50 percent of the population. But back in the early 1970s, the middle class made up more than 60 percent of the population. I have often compared being in the middle class to playing a really bizarre game of musical chairs. When the music stops playing each month, more chairs are being pulled out of the middle class, and most of us are just hoping that we will still have a chair for the next go around.
Earlier today, I came across a USA Today article that discussed some of the factors that are slowly but surely eviscerating the middle class. I am going to share four of those factors with you, and at the end I am going to add one extra one.
First of all, the article pointed to a decline in manufacturing and the rise of “service jobs” as one of the key trends that is changing the nature of work in America… ‘Once dominant industries, like manufacturing — which paid well even without a college degree — have been overtaken by service sector jobs, most of which are low-paying, according to the Bureau of Labor Statistics.’
In the old days, even if you didn’t have any higher education you could support a middle class family by working in manufacturing. We were the greatest manufacturing society that the world had ever seen, and Detroit had the highest per capita income in the entire country. But after decades of sending manufacturing jobs overseas, manufacturing’s share of the U.S. economy is at an all-time low and formerly great manufacturing cities such as Detroit have become rotting, decaying hellholes.
Secondly, the USA Today article pointed to the rising cost of a college education…
‘The cost of getting a college degree is up more than 1,000% since 1978, according to Bloomberg.’
This is a particular pet peeve of mine, because I am still paying off my old law school loans. We encourage our students to get as much education as possible and to not worry about all the debt, but then millions of them find themselves financially crippled and without good jobs once they graduate. This makes it extremely difficult for a lot of our young people to enter the middle class.
Thirdly, the USA Today article brought up stagnant wages and the rising cost of living…
‘Decades of stagnant wages mean both parents must often work to make ends meet, creating a need for child care and elder care that didn’t exist in 1950, for example, when two-thirds of women were full-time “homemakers” aka caregivers, according to the Bureau of Labor Statistics.’
Once upon a time, a single income could easily provide for a large middle class family in America. But today so many families have both parents working, and yet many of them still find it very difficult to pay the bills each month. In fact, surveys have found that somewhere around two-thirds of the entire country is living paycheck to paycheck.
Fourthly, the USA Today article mentioned “the gig economy” as a major issue…
‘The gig economy (Uber, Airbnb) has exploded, giving workers more control and flexibility, but fewer benefits or legal protections.’
Independent work and contract work have become major societal trends, and this isn’t going away any time soon. These types of jobs do not typically come with health insurance, retirement benefits, etc. and so this is something that our nation is going to have to wrestle with.
Fifthly, I would like to throw in the decline of small business and entrepreneurship in America. Working for yourself or starting a business have always been ways to lift yourself up into the middle class in this country, but today it is harder than ever to become independent. The government is absolutely killing small businesses and entrepreneurs with rules, regulations, red tape and high taxes, and little relief appears to be coming our way any time soon.
At this point, the percentage of Americans that are self-employed is hovering near the all-time record low, and if we hope to have a thriving middle class ever again we need to get this fixed.
We also need to train our young people for the jobs of the 21st century. At one time we had one of the best education systems on the entire planet, but today our system of public education has become a global joke.
And I am not exaggerating one bit when I say that.
To give you an idea of how badly the quality of our workforce has declined, I want to share with you something that the owner of a small manufacturing company posted in an Internet discussion forum…
I own a small manufacturing company. Most of the assembly work is done at a bench, with hand tools. The work is not difficult, but quality and consistency is paramount. We are entering into our busiest time of year, and steady growth combined with losing one of our senior bench techs has caused me to run some ads (after spreading the word around to friends and associates).
I have been involved in the manufacturing business for about 30 years, and have seen thousands of resumes.
The last couple weeks I have been reviewing a couple dozen resumes a day. What I am seeing now, is stunning and disappointing. When did people stop learning how to compose a sentence? When did they decide that a resume composed of two sentences is somehow complete? The poor level of spelling, grammar, and frankly effort has me perplexed and perpetually face-palming.
So far, I have two resumes that were not immediately round-filed. Just two.
If this is the current state of our potential work force, we are in trouble.
That really resonated with me, because I have heard pretty much the same thing from so many business owners over the years.
Decades of following the “progressive agenda”, and I am talking about both Democrats and Republicans, has been absolutely disastrous for our society. We desperately need a complete and total cultural revolution, and that means returning to the values and the principles that this nation was founded upon. If we continue on the same path that we are currently on, the middle class will continue to deteriorate, and our nation as a whole will continue to decline.
We can do better, and we must do better.
Alabama Sees 85% Drop In Food Stamp Participation After Work Requirements Reinstated
ZeroHedge.com Jun 6, 2017 10:30 PM
13 Alabama counties experienced some 'shocking' results, or maybe not depending on your natural level of cynicism, when they decided to once again require able-bodied food stamp recipients, without dependents, to be employed and/or engaged in a job-training program in order to participate in the program for more than 3 months over a 3-year period.
As background, Alabama, like many states, lifted their work/training requirements associated with food stamp benefits after the great recession. That said, starting Jan. 1, 2017 the last of Alabama's 13 counties reinstated those requirements and they promptly experienced an 85% decline in taxpayer-funded food subsidies. Per AL.com:
Thirteen previously exempted Alabama counties saw an 85 percent drop in food stamp participation after work requirements were put in place on Jan. 1, according to the Alabama Department of Human Resources.
During the economic downturn of 2011-2013, several states - including Alabama - waived the SNAP work requirements in response to high unemployment. It was reinstituted for 54 counties on Jan. 1, 2016 and for the remaining 13 on Jan. 1, 2017. As of April 2017, the highest jobless rate among the 13 previously excluded counties was in Wilcox County, which reported a state-high unemployment rate of 11.7 percent, down more than 11 percentage points from the county's jobless rate for the same month of 2011.
As of Jan. 1, 2017, there were 13,663 able-bodied adults without dependents receiving food stamps statewide. That number dropped to 7,483 by May 1, 2017. Among the 13 counties, there were 5,538 adults ages 18-50 without dependents receiving food stamps as of Jan. 1, 2017. That number dropped to 831 - a decline of about 85 percent - by May 1, 2017.
Statewide, the number of able-bodied adults receiving food stamps in Alabama fell by almost 35,000 since Jan. 1, 2016. Meanwhile, with each recipient receiving about $126 a month in benefits, that equates to over $50 million in annual savings for taxpayers based on just the state of Alabama alone.
But sure, there is no fraud in the entitlement programs.
* * *
For those who missed it, below is a look back at a prior post which detailed exactly how Americans are spending the nearly $7 billion they receive through the SNAP program each year.
A new study just released by the USDA, offers a very detailed look at exactly how participants in the "Supplemental Nutrition Assistance Program" (SNAP, aka Food Stamps) spend their taxpayer-funded subsidies. Unfortunately for taxpayers, the amount of money spent on soft drinks and other unnecessary junk foods/drinks is fairly staggering. But, we suppose it's a nice taxpayer funded subsidy for the soda industry...so score one for Warren Buffett and the Coca Cola lobbyists.
Per the study, nearly $360mm, or 5.4% of the $6.6BN of food expenditures made by SNAP recipients, is spent on soft drinks alone. In fact, soft drinks represent the single largest "commodity" purchased by SNAP participants with $100mm more spent on sodas than milk and $150mm more than beef.
Soft drinks were the top commodity bought by food stamp recipients shopping at outlets run by a single U.S. grocery retailer.
That is according to a new study released by the Food and Nutrition Service, the federal agency responsible for running the Supplemental Nutrition Assistance Program (SNAP), commonly known as the food stamp program.
By contrast, milk was the top commodity bought from the same retailer by customers not on food stamps.
In calendar year 2011, according to the study, food stamp recipients spent approximately $357,700,000 buying soft drinks from an enterprise the study reveals only as “a leading U.S. grocery retailer.”
That was more than they spent on any other “food” commodity—including milk ($253,700,000), ground beef ($201,000,000), “bag snacks” ($199,300,000) or “candy-packaged” ($96,200,000), which also ranked among the top purchases.
The Real Unemployment Number: 102 Million Working Age Americans Do Not Have A Job
If honest numbers were being used, the unemployment rate is currently 22 percent
Michael Snyder Infowars.com - June 5, 2017
Did you know that the number of working age Americans that do not have a job right now is far higher than it was during the worst moments of the last recession?
For example, in January 2009 92.6 million working age Americans did not have a job, but we just found out that in May the number of working age Americans without a job increased to just a shade under 102 million. We’ll go over those numbers in more detail in a moment, but first I want to talk a bit about the difference between perception and reality. According to the bureaucrats in the federal government, the “unemployment rate” in May was the lowest that we have seen in 16 years. At just “4.3 percent”, we are essentially at “full employment”, and so according to them anyone that really wants a job should be able to find one pretty easily.
Of course that is a load of nonsense. John Williams of shadowstats.com tracks what our economic numbers would look like if honest numbers were being used, and according to his calculations the unemployment rate is currently 22 percent.
So what accounts for the wide disparity between those numbers?
Well, the truth is that the official “unemployment rate” that the mainstream media endlessly hypes is so manipulated that it has essentially lost all meaning at this point.
In May, we were told that the U.S. economy added 138,000 jobs, but that is not even enough to keep up with population growth. However, when you look deeper into the numbers some major red flags quickly emerge. You won’t hear it on the news, but in May the U.S. economy actually lost 367,000 full-time jobs. That is an absolutely nightmarish figure, and it confirms the fact that economic activity is starting to dramatically slow down.
But somehow the “unemployment rate” in May fell from “4.4 percent” to “4.3 percent”.
How in the world can they do that?
Well, for years the government has been taking large numbers of people from the basket known as “officially unemployed” and dumping them into another basket known as “not in the labor force”. Since those that are “not in the labor force” do not count toward the official unemployment rate, they can make things look better than they actually are by moving people into that category.
In May, the government added a staggering 608,000 Americans into the “not in the labor force” category. So now the number of working age Americans “not in the labor force” has reached a total of 94.98 million. When you add that total to the number of Americans that are “officially” unemployed (6.86 million), you get a grand total of 101.84 million.
In other words, when you round up to the nearest million you get a grand total of 102 million Americans that do not have a job right now.
If you go back to January 2009, there were 81.02 million Americans that were “not in the labor force” and 11.61 million Americans that were considered to be “officially unemployed”. And so that means that according to the federal government there were 92.63 million working age Americans that did not have a job at that point.
So if the number of working age Americans without a job has risen by 9.21 million since January 2009, are we really doing so much better than we were during the depths of the last recession?
Another way to look at this is by examining the civilian employment-population ratio. Just before the last recession, about 63 percent of the working age population had a job, but then during the recession that number fell to between 58 and 59 percent for quite a while. We have finally gotten back to the 60 percent mark, but we are still far, far below the level that we were at before the last recession struck.
And of course all of the above assumes that the numbers that the government is giving us accurately reflect reality, and that is highly questionable.
For example, according to one recent analysis the “business birth and death model” has accounted for 93 percent of all “new jobs” reported by the government since 2008…
As our friends at Morningside Hill calculate, a full 93% of the new jobs reported since 2008 – 6.3 million out of 6.7 million – and 40% of the jobs in 2016 alone were added through the business birth and death model – a highly controversial model which is not supported by the data. On the contrary, all data on establishment births and deaths point to an ongoing decrease in entrepreneurship. In essence, government bureaucrats pull a number out of the air and add jobs to the report based on an estimate of how many new businesses they think are being created in America in a particular month.
Is it possible that there is a chance that they are being overly optimistic when they make this estimate?Most people have no idea that the “official numbers” that we get from the government are highly speculative, and there is always a temptation to make things look better than they actually are.
There is no way in the world that we are anywhere near “full employment”. I hear from people all over the country that say that it is exceedingly difficult to find good jobs where they live. And according to a brand new report that was just released, the number of job cuts in May 2017 was 71 percent higher than it was in May 2016. We also know that over the past ten years the average rate of economic growth in the United States exactly matches the average rate of economic growth that the U.S. experienced during the 1930s.
I don’t see how anyone can possibly claim that the U.S. economy is doing well. Just prior to the last recession there were 26 million Americans on food stamps, and now we have 44 million. We are on pace to absolutely shatter the all-time record for store closings in a single year, and the number of homeless people living in Los Angeles County has risen by 23 percent over the past 12 months.