One in Four Children on Food Stamps, One in Eight Overall; Weekly Unemployment Claims Tick Up

Every month the number on food stamps increases. Food stamp usage is now up to a record 36 million. Please consider Food Stamp Use Soars, and Stigma Fades

With food stamp use at record highs and climbing every month, a program once scorned as a failed welfare scheme now helps feed one in eight Americans and one in four children.

While the numbers have soared during the recession, the path was cleared in better times when the Bush administration led a campaign to erase the program�s stigma, calling food stamps �nutritional aid� instead of welfare, and made it easier to apply.

There are 239 counties in the United States where at least a quarter of the population receives food stamps, according to an analysis of local data collected by The New York Times.

The counties are as big as the Bronx and Philadelphia and as small as Owsley County in Kentucky, a patch of Appalachian distress where half of the 4,600 residents receive food stamps.

In more than 750 counties, the program helps feed one in three blacks. In more than 800 counties, it helps feed one in three children. In the Mississippi River cities of St. Louis, Memphis and New Orleans, half of the children or more receive food stamps. Even in Peoria, Ill. � Everytown, U.S.A. � nearly 40 percent of children receive aid.

Although the program is growing at a record rate, the federal official who oversees it would like it to grow even faster.

�I think the response of the program has been tremendous,� said Kevin Concannon, an under secretary of agriculture, �but we�re mindful that there are another 15, 16 million who could benefit.�

�Some people like to camouflage this by calling it a nutrition program, but it�s really not different from cash welfare,� said Robert Rector of the Heritage Foundation, whose views have a following among conservatives on Capitol Hill. �Food stamps is quasi money.�

Arguing that aid discourages work and marriage, Mr. Rector said food stamps should contain work requirements as strict as those placed on cash assistance. �The food stamp program is a fossil that repeats all the errors of the war on poverty,� he said.

Use among children is especially high. A third of the children in Louisiana, Missouri and Tennessee receive food aid. In the Bronx, the rate is 46 percent. In East Carroll Parish, La., three-quarters of the children receive food stamps.

A recent study by Mark R. Rank, a professor at Washington University in St. Louis, startled some policy makers in finding that half of Americans receive food stamps, at least briefly, by the time they turn 20. Among black children, the figure was 90 percent.

The New York Times article came out at the end of November, but this is the first I saw it. This is what food stamp usage looks like across the country.

Food Stamp Usage



Click here to see an Interactive Map of Food Stamp Usage Across the Country

As additional stimulus money pours into extending unemployment benefits and various other social programs, the multiplier effect of such stimulus declines to zero. Indeed it is taking more and more deficit spending just to keep GDP from crashing.

Unemployment Claims Tick Higher

Inquiring minds have been following the Unemployment Insurance Weekly Claims Report.

In the week ending Dec. 5, the advance figure for seasonally adjusted initial claims was 474,000, an increase of 17,000 from the previous week's unrevised figure of 457,000. The 4-week moving average was 473,750, a decrease of 7,750 from the previous week's revised average of 481,500.

4-Week Moving Average of Initial Claims



The 4 week moving average is clearly headed down and that is the good news. It remains to be seen if the weekly uptick is an outlier or not.

The chart shows it has taken about 9 months to drop from the peak in March near 650,000 claims. Bear in mind a number around 400,000 is consistent with a steady unemployment rate (no net job losses or gains).

At this pace, the unemployment rate would keep rising for another 4 months or so, all things being equal. However, all things are not equal. Much of the effect of various stimulus packages such as cash-for-clunkers has already been felt. Then again, we can count on still more stimulus programs out of Congress.

Moreover, it is important to remember there are few if any permanent jobs being created out of any of these stimulus programs, many of which are out and out wasteful. Please see Stimulus Checkup - 100 Ridiculous Projects Funded by the American Recovery Act for proof.

All Congress and the Administration is doing with these programs is shifting demand forward, while wasting a lot of money doing so. As soon as the stimulus stops, so will much of the job creation. In the meantime, the administration is raising taxes to offset the cost of some of these programs, and that stifles job creation.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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