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British Paper Declares USA 2008 Great Depression

The British paper The Independent has declared the USA is headed for the Great Depression of 2008.

Shocking?  Yes.  But, to them none of the economic indicators appear sound, especially in the area of jobs and the need for food stamps.

The paper declares that things are not only bad on Wall Street, but that they are worse on Main Street, stating that as 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.

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.

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.

The US Department of Agriculture says the cost of feeding a low-income family of four has risen 6 per cent in 12 months.  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.

Business Press Failed Us In Regard To The Credit Card Industry

The Columbia Journalism Review reports on how the business press missed a sea change in the credit-card industry.  Primary among what was missed is a body of work, compiled by nonprofit groups, academics, documentarians, and others, that marshaled data to make visible a dramatic qualitative and quantitative—and recent—shift in the relationship between the credit-card industry and its customers that does not benefit the consumer.  That is that the credit-card exchange has shifted from a lending and underwriting paradigm to a sales paradigm involving penalties, fees, and default interest.  Rates that were illegal a generation ago are no longer regrettable outcomes to be avoided but central to the business model.  A  business model that centers on a besieged American middle class caught in an iron vice of stagnating incomes; shrinking disposable income; rising costs for health care, housing, and education; usurious and rapacious practices of the credit-card industry; a growing, consolidating, and increasingly sophisticated debt-collection industry; and, to add insult to injury, a new bankruptcy law that closes the courthouse door to formerly eligible debtors.  And, this view is supported by credible, anecdotal and aggregate data and happens also to be true.