Saturday, July 2, 2011

FOODSTAMPS ARE GOING LIKE HOTCAKES!

April's SNAP (Food stamp program) data release provides another glimpse into the on-going recovery we are not having for our economically challenged folks.  The food stamp roles continue to show monthly gains to levels that have not been seen.

The number of participants receiving government benefits now totals 44.65 million citizens that count on government distribution of taxpayer funds for meals.  Clearly the cost doesn't stop there as these same recipients also probably qualify for health care services and child care benefits.  Don't get me wrong, this lifestyle isn't so grand as the average person receives $131.00 a month in support and the average family takes in $282.00 a month in payments for food related help.  It is just mind blowing to me that 14.5% of our entire nation is living on the taxpayer dole.  I'm sure there are a large number of folks out there that are too independent to actually apply for these benefits even though they qualify for them.

I find it compelling that our stock market continues to rip higher (kinda) while our population of non-stockholder SNAP participants continues to increase.  In other words, the divide between the haves and have-nots continues to increase.  Interestingly, the policies of the Federal Reserve to increase inflation to their 2% inflation target will exacerbate this problem!  Those people that don't have assets that will appreciate more than inflation or at least hopefully keep pace with it will fall deeper and deeper into a hole made entirely by our own central bank!  We better hope that this commodity price inflation is transitory Uncle Ben.

APRIL SNAP DATA





Here are a few more details of the report.

USAGE FACTS
1 month increase or decrease   + .14%
YTD increase or decrease  +1.0%
YOY increase or decrease +10.4%

ANY GOOD NEWS HERE?
As a glass half-full kind of goat I always look for the positive and I see two things that make me optimistic.  First, we see a drop in that actual total benefit cost of the program.  April shows that there was a drop in cost by $33 million.  This is great news, and keeps us from eclipsing the $6 Billion annual cost level.  This drop in pricing is only the second one in almost two years. 

Second, the rate of change of people coming on to the program is now almost at zero (.14%) which is the second lowest total since November 2008 when there was a drop of 1.7% of the participants in the program.  These are great signs and I'm hopeful the drop is a symptom of higher employment for our nation.  Perhaps all those shovel-ready projects are coming on line now?  Perhaps.


GOATMUG



Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments at http://www.goatmug.blogspot.com/