Some American families are $133 a month away from Great Depression like problems – 1 out of 7 Americans receiving food assistance at an average of $133 per person.

The U.S. government is now spending roughly $5.6 billion per month on food assistance helping out 41,836,000 Americans.  How bad is it for the lower economic strata of families in our economy?  In January of 2007 we had 26,000,000 Americans on food assistance.  The economic crisis has added 15,800,000 Americans onto the food assistance program now known as SNAP.  These numbers are incredible and demonstrate how deep the recession has gotten.  Even though on paper the recession ended in the summer of 2009 these numbers show a very different economic climate.  Where did these 15 million people come from?  Many have fallen off the middle class treadmill and have been sucked into the ever growing invisible class of people in the U.S.

Take a look at this chart:

total costs food stamps

Source:  SNAP

I find the above disheartening because those that struggle the most financially in our economy started feeling the recession in 2000.  The credit bubble did very little to help this group.  What the debt bubble produced was it allowed for the masking and destruction of the middle class who actually thought they were moving forward but were merely playing house with massive mortgage debt and credit cards.  The stock market has yielded no results for over a decade for most laymen investors.  Why?  The stock market is now a fast paced casino where insider information trumps any sound advice or connections to success in the real economy.  Yet the poor in our society barely have enough for food, forget about investing in our stock market.  Yet it is stunning that 1 out of 7 Americans is now on food assistance.  If you break down the average costs per head, the numbers appear grim:

$5,601,600,000 (monthly cost) / 41,836,000 (Americans on food assistance) = $133 per person

I think a lot of people like to beat up on this group because they think that overall people are defrauding the system.  Really?  Just look at the above data.  How much can you do with $133 per month?  Sure you have cases in the media of fraud but we’re talking about 41 million people here.  A family of three will get something like $400 per month.  What about rent?  Utilities?  Is it any wonder that many families camp out at Wal-Mart stores overnight just so they can have their electronic debit cards refilled so they can purchase food for family members at the end of the month?  It is amazing that a tiny program like SNAP with an average payout of $133 a month is literally keeping us one inch away from Great Depression like scenarios.

I think the reason so little attention is given to this group is each state issues their own version of the SNAP debit card:

california food stamp card

This takes the stigma away from families needing to use food coupons to purchase food at the store.  Also, with so many families on food assistance you would expect to see more of this but because it is hidden, many are likely to blend in with other Americans.  The working and middle class are facing the brunt of this recession.  Many have railed on California about it being a welfare state yet looking at the data shows us a different picture.  For example, at the end of 2009 these are the number of people on SNAP per state:

California: 2,670,341

Texas: 3,003,156

As of July of 2009 California had 37 million residents while Texas had close to 25 million.  In other words, even a state like Texas that has seemed to weather the economic storm a bit better than other states has a larger proportion of residents on food assistance than an economically ravaged state like California.

$133 per month per person is basically the safety net that is keeping many families from starving.  It is incredible that we have gotten to this point.  You would think that the media would be talking about this issue on a daily basis that 1 out of 7 Americans are on food assistance.  This coincides with the fact that 17 percent of Americans are either unemployed or underemployed.

food stamps

Costco as of last year recognized the shift in this consumer market and started accepting food cards:

“(WSJ) Costco Wholesale Corp., one of the country’s largest warehouse-club chains, said it will start accepting food stamps at its 420 stores nationwide, as the number of Americans receiving government assistance continues to soar.

Under pressure from politicians, Costco began accepting food stamps at six New York City stores earlier this year and was surprised to discover that this led to a rise in memberships and sales. Other warehouse-club chains began accepting food stamps within the last year.

“Given the economy and layoffs, this was a positive for our members and the right thing to do,” said Richard Galanti, chief financial officer of Costco, which is based in Issaquah, Wash.”

It is only a sign of the times.  You also see dollar stores doing exceptionally well in this economy as they have found a new growing consumer market:

dollar store stocks

Given the current economic trend, these stores will have a guaranteed customer base for years to come.  I’m not sure this is the kind of growth we want in our economy.  It is no wonder why many of the dollar based stores have started offering a larger portion of food over the past few years.

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7 Comments on this post

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  1. Falesteeni said:

    The worse is yet to come!

    October 20th, 2010 at 5:35 pm
  2. James Winstanley said:

    Is there any surprise that Nancy Pelosi actually said that food stamps and unemployment benefits are going to bring this country out of the recession? Well, seeing as she isn’t on them, along with the rest of Congress, how would she know how to use them?

    Then again, seeing as the American taxpayers pay her salary (which pays for her food and mortgage), medical care, and pension, she (and every other politician) is sucking more out of the economy than the average family on Public Assistance.

    October 20th, 2010 at 6:43 pm
  3. Just Being Real said:

    Sorry, not feeling sorry for these folks. These same people who you claim are “desperate,” and unable to afford their own food are the same folks who seem to be able to afford things like cigarettes, cell phones, lottery tickets or a 6-pack of beer on the weekends. How in the world do you afford these things when you are supposed to be “needy?” GIVE ME A BREAK. The only true victims are the innocent children of these pathetic adults. I am not by any means a wealthy person either, but I have enough intelligence not to blame all my problems on others. I have a bit of advice for the poor, poor folks who cannot lift their fingers to do for themselves – PLANT A GARDEN sometime! If you are unemployed and poor, do something simple like plant a few veggies and learn how to can your veggies!! Gee, and when you’ve tried that, perhaps you should stop buying the cigarettes, cell phones, lotto tickets, etc.. Sorry, if you are not a child or an elderly person, no sympathy here.

    October 21st, 2010 at 9:50 am
  4. Stirling Sturk said:

    Disagree with the premise that (taxpayer NOT government) dollars are snatched up by people who are not working (at ANYTHING that is available) in order to survive. 75 years of age, NEVER have earned more than approx. 12,000 dollars in any one year, and only that for about 2 years time, yet have never been without some sort of EARNED INCOME since 10 years of age. Never applied for, nor received food stamps, welfare payments, unemployment insurance benefits, etc., and yet have ALWAYS saved some portion of my income. Have never welched on a rent payment, have self-built one home which was lost to fire (uninsured), and then built a second one from scratch. It (ALWAYS) depends upon what one is willing to do, and to do WITHOUT, in order to be self-reliant. To ‘take’ funds from others without payback in some manner, is not self-reliance, but ‘mooching’, and it is unfortunate and a mistake to take the shame out of it, for that is when you discard your pride.

    October 21st, 2010 at 10:54 am
  5. BlackPanther said:

    It’s sickening to think that our government recently said that the recession is OVER. Sickening! However, sometimes I think the recesssion is really over. The recession is over, and the DEPRESSION HAS STARTED.

    So the government gave us a half-truth. The recession is over! They just forgot the most critical missing piece of information – THE DEPRESSION HAS STARTED.

    October 22nd, 2010 at 1:33 pm
  6. GreenClover said:

    Good Lord!! 1 out of 7 on food stamps is a good reason to go out & vote 11/02. However, it sounds as though the fed. govt. is trying all that it can to get Americans on welfare/food stamp programs.

    Need to read a book just surfacing that’s so real/thriller where Americans take a stand & try to do something about our sad political situation (career politicians). It’s a must read
    ( http://www.booksbyoliver.com)

    If things are bad now, can you imagine how bad it’s going to be next year cause there is civil unrest in France/England right now & it could carry over to us (as it went frm Greece to Europe).

    October 22nd, 2010 at 3:04 pm
  7. GoneWithTheWind said:

    If you do not think many are defrauding the welfare/food stamp system you are uninformed and naive. Many/most people on food stamps use their own money to buy alcohol and cigarettes and to gamble. If YOU were in dire need and hungry would you buy alcohol and cigarettes every day? Many/most people on welfare do not look for work and would not work if a job was offerred. If they did they might lose all or some of their welfare. They do not want to work they want the government to pay them to sit around drinking beer, smoking and gambling. DUH!

    October 23rd, 2010 at 8:05 am

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