America’s Real-Life ‘Hunger Games’ [View all]

[BelgianMadCow]

From Consortiumnews:

All this might be even more darkly comic if not for the fact that here in the real world, Washington is playing a Hunger Game of its own and the results are devastating. Yes, winter is coming, the holidays are on their way, and on Nov. 1, the United States government cut food stamp benefits by 13.6 percent.

Meanwhile, this has a real and drastic impact on every one of the 48 million Americans – that’s one in seven of us – who receives the aid, now officially known as the Supplemental Nutrition Assistance Program, or SNAP. (The cut marks the end of extra funding that was put into the program as part of the stimulus package in 2009.)

If ever there was such a gathering of the pennywise and pound foolish as this current band of representatives, I’d like to hear about it. For one thing, they fail to take into account the estimation that every dollar of SNAP assistance actually generates $1.70 in economic activity – that’s money spent on food in grocery stores, bodegas and big box giants like Wal-Mart and Target that then goes toward paying their workers and suppliers and on and on.

But worse may be the failure to contemplate the long-term effect of these cuts not only on poor adults but future generations. As Reid Wilson reported in The Washington Post, “SNAP benefits disproportionately help families with children. More than 21 million children — one in four children in the country today — live in households that participate in the program. More than two-thirds of the $5 billion the government saves will come from households that include children.”

The fact that one dollar of SNAP generates 1.70 dollar in economic activity is what economists call the multiplier. There is another interesting one: the IMF had to admit that it significantly underestimated the negative multiplier effect of austerity. Oops!

Blanchard and Leigh deduced that IMF forecasters have been using a uniform multiplier of 0.5, when in fact the circumstances of the European economy made the multiplier as much as 1.5, meaning that a $1 government spending cut would cost $1.50 in lost output.

See, the idea that this austerity is to give "oxygen" to "the economy" is total BS. It's just using a crisis to advance a radical neoliberal agenda. Which is impossible to believe as a result of a crisis that was caused by that agenda, but here we are.

When 'the economy' is doing okay, yet the number of people on SNAP has never been higher, I'd say the economy no longer serves its purpose. Whenever you read "the economy" in mainstream media, substitute "capitalists' profits". Suddenly headlines make much more sense.

Much strength to all the people who have a hard time making ends meet, especially in winter time.