Bail-Ins: The Legal Framework is in Place to Continue Looting the American Public.

At the expense of the American public (devastating austerity and elimination of the middle-class), 2008 ushered in government bail-outs in order to preserve Wall Street's corrupt and bankrupt system., but what about government bail-ins (confiscation of bank deposits), the likes of which we saw occur in Cyprus, Greece? In addition to bail-outs, so far, we've been witness to severe austerity measures targeted at the masses, including sequestration, a dog-and-pony-show government shutdown, and massive cuts to food stamp that essentially puts a stranglehold on economic recovery (for the masses), not to mention the threat of default. There is no doubt that the intention is to strip away what is left of the social safety net at a time when its most needed. Meanwhile, J.P. Morgan, Goldman Sachs, Bank of America, Citibank, Deutsche Bank, etc., have not only evaded any and all consequences of their egregious actions, they are generously rewarded as they continue to gamble with taxpayer money. It doesn't take a rocket scientist to see what's going on here.

These austerity measures disproportionately affect children, seniors, and people with disabilities. According to the Center on Budget and Policy Priorities (CBPP), this recent $5 billion cut will average less than $1.40 per person per meal and jeopardize the strength of the current economic recovery. Moreover, according to the Center for American Progress (CAP) "each $1 billion dollar reduction in the Supplemental Nutrition Assistance Program eliminates 13,718 jobs," resulting in more than 68,000 job losses in the coming year.

Keep in mind that programs such as SNAP have what economists call a "multiplier effect"—in other words, "a dollar given to an entitlement recipient has amplified economic benefits. In this case, those consist primarily of the grocers who benefit when food stamp users shop in their stores. The estimated multiplier effect for food stamps is as high as 2 to 1."

The report, "Nourishing Change: Fulfilling the Right to Food in the United States," released by the International Human Rights Clinic (IHRC) at the New York University School of Law is timely as our government cut at least $5 billion-with many more cuts to come-- from the government's already inadequate $80 billion food stamp program, Supplemental Nutrition Assistance Program (SNAP), in the Farm Bill.  This report cites a study by the Center for American Progress, that calculates the "hunger bill" for the country, which includes the costs of treating illnesses and other medical conditions related to food insecurity, the impact of hunger on educational outcomes and lifetime earning potential, and the costs of running charity-based emergency food programs. For 2010, that bill came to $167.5 billion. For about half of that, $83 billion, the Center says we could extend the SNAP program to all food insecure households.

Okay, back to bail-ins.  It's the Dodd-Frank Act that passed in 2010-- it took up 848 pages at the time, as of July 2012 an additional 8,843 pages of rules were added, representing only 30% of the rules to-be-written. The estimate for the final length of the Act is 30,000 pages --that provides the legal framework for bail-ins.

According to the April 24, 2012 IMF report, conversion of bank debt to stock is an essential element of bail-in included in Dodd-Frank. “The contribution of new capital will come from debt conversion and/or issuance of new equity, with an elimination or significant dilution of the pre-bail in shareholders. ...Some measures might be necessary to reduce the risk of a ‘death spiral’ in share prices.” In the language of Dodd-Frank, this will “ensure that unsecured creditors bear losses.”

Under the existing legislation, the FDIC has the power to impose losses on unsecured creditors in the process of resolving failing banks. For example, the FDIC resolved Washington Mutual under the least-cost resolution method in 2008 and imposed serious losses on the unsecured creditors and uninsured depositors (deposit amount above USD 100,000). The Orderly Liquidation Authority (OLA) established under the Dodd-Frank Act further expands the resolution authority of FDIC. Subject to certain conditions, the FDIC now also has the powers to cherry-pick which assets and liabilities to transfer to a third party and treating similarly situated creditors differently, eg: favoring short-term creditors over long-term creditors or favoring operating creditors over lenders or bondholders. -- Economist, Nouriel Roubini

The U.S. is far from the only nation with provisions for bail-ins:

Bail-In Rules for Eurozone Banks Should Start In 2016

Bondholders Bail-in Shows Alternative Method to Rescue Banks

Bank Bail-in Rules Confirmed


But who cares, right? The stock market's soaring to new heights while income disparity continues to widen at unprecedented levels.

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Are Millions About to Go Over the Hunger Cliff?

While the price of food is substantially increasing, the food-stamp program is now set to downsize as there's a big automatic cut scheduled for tomorrow that will trim $5 billion from federal food-stamp spending, disproportionately affecting children, seniors, and people with disabilities. That's not counting the 900.000 veterans and their families who will receive cuts to their benefits as well.

According to the Center on Budget and Policy Priorities (CBPP), this cut will average less than $1.40 per person per meal and jeopardize the strength of the current economic recovery. Moreover, according to the Center for American Progress (CAP) "each $1 billion dollar reduction in the Supplemental Nutrition Assistance Program eliminates 13,718 jobs," resulting in more than 68,000 job losses in the coming year.

Keep in mind that programs such as SNAP have what economists call a "multiplier effect"—in other words, "a dollar given to an entitlement recipient has amplified economic benefits. In this case, those consist primarily of the grocers who benefit when food stamp users shop in their stores. The estimated multiplier effect for food stamps is as high as 2 to 1."

Billions more in cuts are scheduled to occur in the following two years, despite the fact that food insecurity in America has not even begun to return to pre-recession levels.

But who cares? The stock market's soaring to new heights despite the income disparity that continues to widen at unprecedented levels.

“If you look across the world, riots always begin typically the same way: when people cannot afford to eat food,” -- Margaret Purvis, , president and CEO of the Food bank for New York City,

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2012: Foodstamps Thanksgiving in America.

More Americans will use food stamps to buy their Thanksgiving dinner this year than ever before, according to a new report from The Sunlight Foundation. That's right. This Thanksgiving, 42.2 million Americans will be on food stamps, according to the Economic Policy Institute.

According to the Congressional Budget Office (CBO), average participation in the Supplemental Nutrition Assistance Program (SNAP), or food stamp program, has increased 70% since 2007. And economists have warned that usage of food stamps won't go down until unemployment improves.

 One person on food stamps has a budget of about $1.25 per meal. In other words, a family on food stamps must buy an entire meal per person for less than the cost of a cup of coffee.

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Based on New Census Measure, Number of Americans in Poverty at Record High

As as a congressional super committee nears a November 23rd deadline to make more than $1 trillion in cuts to the federal budget, an experimental measure that takes geographic location into account yields highest-ever number of poor Americans. 49.1 million are poor, based on a new census measure that for the first time takes into account rising medical costs and other expenses.

Moreover, using the old supplemental poverty measure, one in fifteen - 6.7% of the population - are among America's poorest poor..  Data shows about 20.5 million Americans make up the poorest poor, defined as those at 50% or less of the official poverty level.

Poverty for Americans 65-years and older is on track to nearly double after factoring in rising out-of-pocket medical expenses.   Poverty increases are also anticipated for the working-age population because of commuting and child-care costs, while child poverty will dip partly due to the positive effect of food stamps...that's if those food stamps survive the cuts.

"There now really is no unaffected group, except maybe the very top income earners," said Robert Moffitt, a professor of economics at Johns Hopkins University. "Recessions are supposed to be temporary, and when it's over, everything returns to where it was before. But the worry now is that the downturn - which will end eventually - will have long-lasting effects on families who lose jobs, become worse off and can't recover."

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Despite Record Level Poverty, Soaring Food Prices, Food Stamps on the Chopping Block.

Despite soaring food prices (double the core inflation rate), due mostly to excessive speculation because of a deregulated agricultural commodity derivatives markets; rapidly rising poverty rates, and steady unemployment numbers, Congress is calling for dramatic cuts to Supplemental Nutrition Assistance Program (SNAP), the food stamp program, regardless of the fact that for every $1 spent on food stamps, $1.79 is made.

According to US Department of Agriculture, since December 2008, the Supplemental Nutrition Assistance Program (SNAP) has set records, every month, except one. August, 2011, the last month reported, was no exception, as it has set another record for the number of Americans - 45.8 million - receiving food stamps, a figure  1.1% higher than the previous month and 8.1% more than a year earlier, with Texas and California leading the pack.

Household participation in SNAP is climbing so steadily that it has far surpassed, even the peak reached after the fallout of hurricane Katrina.

"The slow economic strangulation of millions of middle-class Americans started long before the Great Recession, which merely exacerbated the “personal recession” that ordinary Americans had been suffering for years." -- Edward Luce in a Financial Times article.

Meanwhile, the incomes of the top 1 per cent have more than tripled.
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Struggle for Mastery Submerged in Goo and Treadmills for Shrimp.

As Memorial day approaches, it's somehow comforting to know that our troops may be sacrficing their food-stamp qualifiying pay to ensure the well-being of decapod crustaceans, and   that the sticky residue of self-congratulatory goo that normally remains in the world of metaphor is allowed to manifest and show itself for what it really is.

I mean, I don't know about you, but lately, I've noticed something happening lately: a definite increase in what I call "Triton Driving Welfare Shrimp Queens" (Oh, you didn't know lazy shrimp pilot luxury submersibles fully loaded with leather seating and full air conditioning? Well, guess what? It's as real as Reagan's Cadillac driving welfare queens.). That is, flabby, pathetically out-of-shape, twinkie-crumb-covered entitled shrimp who would rather lounge lazily on their salty shelled sofa beds, watching the Jersey shore, than doing what shrimp are supposed to do: get off their collective asses and WORK-OUT! It really has become quite a problem.

But, don't you worry, the National Science Foundation, having the “gold-standard approach to peer review” for the projects they spend money on is not letting this this fundamental, earth-shattering problem get buried under less important issues. Nosiree! Our tax-dollars are working hard trying to rehabilitate these good-for nothing, sofa-bed-shrimp. How? You ask. Well, by providing shrimp treadmills, of course!

Now, some of you may be asking yourself [I know I did], what about those people in the Anartica who want to struggle for mastery submerged in goo?

Well, good question. Once again, our tax dollars are seeing to it that these lovely people will not be denied their jello. Never let it be said that  American government  ignores the jello-loving, ice-dwelling Anarticans. They will wallow in nothing but the best

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Food Stamps Stimulate the Economy.

In the New York Times article, Food Stamp Use Soars, and Stigma Fades by Jason DeParle and Robert Gebloff last week, Greg Dawson (left) said he "considers himself lucky to still have work, as a night-shift electrician installing lights in a chain of grocery stores. He lives in the house he's building in Martinsville, Ohio, with his wife, Sheila, and their five children, and they get a $300 benefit through the food stamps program. "It's embarrassing," said Mr. Dawson, 29. "I always thought it was people trying to milk the system. But we just felt like we really needed the help right now."

Food stamp use soared under President George W. Bush, up more than 1/3 in the last two years, with some states reporting up to a 75-80% increase; an additional 10 million people have been added to Supplemental Nutrition Assistance Program (SNAP) bringing the total number to 36 ½ million. That's 20,000 new people added each day...one in eight Americans...one in four children depending on the US government for sustenance. An additional 15 million people could benefit because as of now, the food stamps program reaches only 2/3 of the people who are eligible.

The profile of individual on food stamps has changed. Its not just the chronically poor any more. The education and employment levels have risen showing a sharp increase of people applying who are further up the economic scale.

It's a complex formula for deciding who gets SNAP, but in a nutshell, eligibility ranges up to 130% of the poverty threshold. For a family of four, that's $22,000 per year which translates to about $26,000 per year to qualify for SNAP. A family of four would receive approximately $520 per family or $130 per person.

The cost of the entire program is share by local, state and federal funds, however food stamps in and of itself is an economic stimulus. Every $1 spent translates to $1.82 in economic activity. Not only is the dollar immediately spent because food is a necessity, that same dollar in turn helps to pay the salaries of the grocery clerks, the truckers who haul the food, and finally the farmers.

Links:

Recovery and Reinvestment Act of 2009

An interactive map of food stamp usage around the country

Snap To Market is the NY Farmers Market EBT/Food Stamp/SNAP program allows hundreds of farmers markets to accept SNAP (food stamps)

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We, the Money Sheltered Ignorant, Must Stand Up.

Let's face it, most of us, who were sheltered by a certain amount of wealth, were "free market" advocates. Brainwashed, perhaps, however, fully supportive of the idea that interference in the "free market" system is akin to treason, we never asked ourselves, where's the freedom in "free market"?

Or, in what universe are the markets free when a few large corporations completely control the supply and the price of commodities? At least, I didn't. Anyway, if that's the case, why did we the "wealthy enough to be comfortable" worship at the altar of laissez faire?

The simple answer is, as George Orwell put it, "money-sheltered ignorance". That between the illusion of our own sense of security, too much wealth, and 'willful' or 'distracted easily' ignorance of what was really going on; we the "wealthy enough to be comfortable" fell asleep at the wheel. The market was never free.

However, now, that we're in a financial crisis that effects all of us, even those at the top of the pyramid, it's clear that the "free market" did not, does not and will not guarantee economic efficiency or social justice all by itself. Government must interfere in order to avoid inequity and social stratification in the extreme. As President Obama indicated, the size of government matters little...what matters is if government works.

The chance for freedom is here, and it's up to we, the people privileged enough to remain ignorant of the reality of "free market" economics, to transcend any leftover greedy impulses to determine what will really work to stimulate our economy for all of us, rather than just the few.

So, what's the best way to get the most bang for our buck?

Consider this. People who literally live paycheck to paycheck have no choice but to spend every dollar received. Whether it's spent on groceries, gas for their car, or electricity to heat their home, etc., the working poor and lower income America cannot afford to stash their money away. Therefore, this group of people should be targeted to stimulate the economy.

According to Moody's Report:

For every $1 spent on food stamps; $1.73 is generated in economic activity.

For every $1 spent on unemployment; $1.64 is generated in economic activity.

For every $1 spent on infrastructure; $1.40 is generated in economic activity.

For every $1 spent on tax cuts; $103 is generated in economic activity.

For every $1 spent on business incentive tax breaks, for example, "accelerated depreciation" or tax breaks for buying new equipment; $ .33 cents is generated in economic activity.

Not to mention, the greatest way to induce spending is to direct a large part of the stimulus toward the states and other localities because without federal aid, states must cut spending, therefore deepening the recession even further.

Unfortunately, President Obama's reality is that, in order to pass a stimulus package, he must conciliate to those stuck in the old framework. However, the more that we, the people stand up, the less conciliatory the President has to be.

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Citizen to Citizen.

With unemployment predicted to reach 8% by year's end, and food prices continuing to escalate, increasing numbers of Americans who normally donate to food pantries and volunteer at Soup kitchens are finding themselves on the receiving end of such programs. The number of Americans using food stamps is expected to surpass "the historic high set in 2005 after Hurricane Katrina".

Food pantries and other charitable organizations are reporting that supply is falling short of demand. It is also likely that the value of food stamps may not keep up with rising prices, as this benefit is only adjusted for inflation annually. However, citizen-centered philanthropy can make a world of difference, filling in where government programs fail to meet the needs of citizens who have fallen on bad times.

For instance, take Pam Koner, a mother of two in West Chester, NY, who, moved by an article in the New York Times, "In Trenches of a War on Unyielding Poverty", she gathered local families, in her neighborhood together and encouraged each of them to “adopt” one of the families - who live at an income level that is half the state average - in Pembroke IL, the rural community the article focused. What started out with 15 suburban families linked to 15 families living in impoverished conditions became Family-to-Family and grew to 700 families. All together Family-to-Family supports thirteen needy communities located in ten states.

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