Food bank CEO warns of riots over major food stamp cuts

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A sign displays that a shop accepts Electronic Benefits Transfer (EBT), more commonly known as Food Stamps, in the GrowNYC Greenmarket in Union Square on September 18, 2013 in New York City (AFP Photo)

RT

The US food stamp system is to be reduced by $5 billion starting in November. The average benefit will shrink and the overall number of people receiving it will diminish by millions. The CEO of America’s largest food bank says the cuts will end in riots.

“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, told online news and entertainment site Salon.com

She added that families face the “daunting” prospect of losing a whole week’s worth of food every month.

Currently, the program costs about $80 billion per year and provides food aid nearly 15 per cent of all US households – over 45 million people.

A big automatic cut is expected on November 1, taking $5 billion from federal food-stamp spending over 2014. The benefit is set to shrink by 5 per cent.

One of the reasons for the reduction is the temporary expansion of the food-stamp program in 2009 as part of the Recovery Act.

Thus, the maximum monthly benefit for a household of four will drop by $36 a month, by $29 for a family of three, and by $20 for two people, according to a report published by the Center on Budget and Policy Priorities.

That bill spent $45.2 billion to increase monthly benefit levels to around $133.

Now, almost 45 million people get food stamps – compared to 26.3 million, or 8.7% of the population, in 2007.

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‘De-Americanized World’ provokes alarm in US

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As fears mounted this week about a possible (and now, it seems, averted) US government default, the US press stumbled upon an Oct. 13 editorial in Xinhua, China’s largest news agency, calling for a “de-Americanized world” in light of Washington’s fiscal dysfunction.

News outlets including CBS, USA Today, and Bloomberg picked up the editorial, while the Los Angeles Times ran a story with the headline “Upset over US fiscal crisis, China urges a ‘de-Americanized world.’

“CNBC emphasized that Xinhua was a “government voice,” and that the editorial was “government propaganda” intended for local readers.

According to Foregn Policy, the op-ed hit something of a sweet spot for shutdown-traumatized Americans, touching on, as Max Fisher at the Washington Post put it, “the dual American anxieties that we are letting down the rest of the world and that China is finally making its move to replace us as the global leader.”

By Oct. 16, there were at least 15 articles in major Chinese-language media outlets on the international response to the piece.

Xinhua published one titled, “Incisive wording of Xinhua’s call for ‘de-Americanization’ surprises American media,” and the Communist Party mouthpiece Global Times’ top headline on Oct. 16 was “Washington Worried by ‘de-Americanization’ editorial run in China’s state-run media.”
China’s Ministry of Foreign Affairs, however, issued its last official comment on the fiscal showdown in Washington on Oct. 9: “China and the US are economically intertwined and inseparable. We hope that the US can resolve this issue and ensure the security of Chinese assets in the US” Admittedly, “Xinhua Journalist Calls for a ‘De-Americanized World'” makes for a less compelling — if more accurate — headline.
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Greece Slides Into The “Fourth World” – The Full Photo Album

With Greek government bonds at multi-year highs (up 300% in the last year), the Athens Stock Index still up 100% in the last year, and leaders all over the Euro-zone proclaiming the crisis is over (and that Greece has “made big strides”); we thought it perhaps useful to look at the reality behind the propagandized talk and manipulation. The sad truth is Greece is rapidly dissolving into a ‘fourth world’ nation with unemployment rates (broad and youth) at unprecedented levels, poverty widespread, and homelessness rife. Perhaps, as Germany today stated that there will be no more debt reduction for Greece, it is ‘math’ in the first image that the TROIKA and the Greek representatives should pay special attention to…

By Tyler Durden zerohedge.com via Reuters

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40-year-old Yiorgos, who became homeless in 2010 after his grocery shop went out of business, sleeps outdoors in central Athens February 3, 2013.

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42-year-old Alexandros, from Serres in northern Greece, sits in the abandoned car he lives in, at the port of Piareus near Athens April 10, 2013. Alexandros owned a plant shop in Athens until 2010, when it was forced to close, he became homeless soon after.

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Homeless people sleep outdoors in central Athens April 14, 2013.

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A homeless scrap collector sleeps outside in central Athens May 26, 2013.

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Stephanos became homeless in late 2012 when the clothes shop, where he had worked for over a decade, closed down and he had no income to pay for his flat. He now lives next to a church in central Athens and eats in soup kitchens. Stephanos smokes a cigarette as he sits on a rug in central Athens May 16, 2013.

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36-year-old unemployed clerk Michael sits in the sun near a bridge in central Athens May 24, 2013. Michael worked as a hotel clerk for over fifteen years but when the hotel closed he was unable to find work and in late 2011 became homeless, two months later he was diagnosed with lymph node and thyroid cancer. He now lives outside a church.

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51-year-old Romanian truck driver Adrian, who lost his job in 2010 when the lorry company he was working for closed down, sits with his head in his hands in central Athens January 18, 2013. Adrian survives by collecting scrap and lives in an abandoned warehouse in Athens central vegetable market.

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50-year-old Giorgos sits with his belongings under a bridge, where he lives with a group of other homeless people, in central Athens May 25, 2013. Giorgos was forced to close down the billiard hall he owned in 2006, and spent time in prison for not paying his social security debts.

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CBO Estimates “Obama Tax Cut” To Add $4 Trillion To Deficit Over Next Decade

Zero Hedge

Two things:

First – it is no longer the “Bush (temporary) tax cut” – it is now the “Obama (permanent) tax cut“, with a loophole for the 1%ers (whose big picture “impact” we showed previously)

Second – according to the just released scoring by the CBO, the total impact on the US budget deficit of said permanent tax cuts, will be a $4 trillion increase in the deficit over the next decade.

In reality, due to the CBO’s perpetual optimistic bias, this number will likely be orders of magnitude lower than what it actually ends up being.

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Maybe the US can just increase the taxes on the uber wealthy some more, and pray that unlikeObelix, they have never heard of Belgium.

In other news, perhaps it is time for the CBO to come up with an Extended Extended Alternative Alternative Fiscal Scenario.

Because the baseline Extended Alternative, as demonstrated previously and as shown below, may now be just a smidgeon optimistic.

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How Goldman Sacked Greece

by Greg Palast for In These Times

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Here’s what we’re told:

Greece’s economy blew apart because a bunch of olive-spitting, ouzo-guzzling, lazy-ass Greeks refuse to put in a full day’s work, retire while they’re still teenagers, pocket pensions fit for a pasha; and they’ve gone on a social-services spending spree using borrowed money. Now that the bill has come due and the Greeks have to pay with higher taxes and cuts in their big fat welfare state, they run riot, screaming in the streets, busting windows and burning banks.

I don’t buy it. I don’t buy it because of the document in my hand marked, “RESTRICTED DISTRIBUTION.”

I’ll cut to the indictment: Greece is a crime scene. The people are victims of a fraud, a scam, a hustle and a flim-flam. And––cover the children’s ears when I say this––a bank named Goldman Sachs is holding the smoking gun.

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This is an adaptation of an excerpt from Vultures’ Picnic, Greg Palast’s new book, out next week, an investigator’s pursuit of petroleum pigs, power pirates and high-finance fraudsters. Read the first chapter or just get the book here.

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In 2002, Goldman Sachs secretly bought up €2.3 billion in Greek government debt, converted it all into yen and dollars, then immediately sold it back to Greece.

Goldman took a huge loss on the trade.

Is Goldman that stupid?

Goldman is stupid—like a fox. The deal was a con, with Goldman making up a phony-baloney exchange rate for the transaction. Why?

Goldman had cut a secret deal with the Greek government in power then. Their game: to conceal a massive budget deficit. Goldman’s fake loss was the Greek government’s fake gain.

Goldman would get repayment of its “loss” from the government at loan-shark rates.

The point is, through this crazy and costly legerdemain, Greece’s right-wing free-market government was able to pretend its deficits never exceeded 3 percent of GDP.

Cool. Fraudulent but cool.

But flim-flam isn’t cheap these days: On top of murderous interest payments, Goldman charged the Greeks over a quarter billion dollars in fees.

When the new Socialist government of George Papandreou came into office, they opened up the books and Goldman’s bats flew out. Investors’ went berserk, demanding monster interest rates to lend more money to roll over this debt.

Greece’s panicked bondholders rushed to buy insurance against the nation going bankrupt. The price of the bond-bust insurance, called a credit default swap (or CDS), also shot through the roof. Who made a big pile selling the CDS insurance? Goldman.

And those rotting bags of CDS’s sold by Goldman and others? Didn’t they know they were handing their customers gold-painted turds?

That’s Goldman’s specialty. In 2007, at the same time banks were selling suspect CDS’s and CDOs (packaged sub-prime mortgage securities), Goldman held a “net short” position against these securities. That is, Goldman was betting their financial “products” would end up in the toilet. Goldman picked up another half a billion dollars on their “net short” scam.

But, instead of cuffing Goldman’s CEO Lloyd Blankfein and parading him in a cage through the streets of Athens, we have the victims of the frauds, the Greek people, blamed. Blamed and soaked for the cost of it. The “spread” on Greek bonds (the term used for the risk premium paid on Greece’s corrupted debt) has now risen to — get ready for this––$14,000 per family per year.

Euro-nation, the secret Geithner memo, and the Ecuador connection

Why did the Greek government throw its nation’s fate into Goldman’s greasy hands? What the heck was in the “RESTRICTED” document? And why did I have to take it to Geneva, to throw it down in front of the Director-General of the WTO for authentication, a creepy French banker I otherwise wouldn’t bother to spit on, and then tear off to Quito to share it with the grateful President of Ecuador?

To give you all the answers would require me to write a book. I have: Vultures’ Picnic––in Pursuit of Petroleum Pigs, Power Pirates and High-Finance Fraudsters.

It’s really quite important to me that you read it, that you get it now. That’s a funny statement, I suppose, from an author. But if you’ve been reading my stories in The Guardian or watching my reports on BBC Newsnight, you’ve gotten the facts; but I really want to let you inside the investigations, to cross the continents with me and follow down the leads so that you can get a full picture of The Beasts. The Beasts and their trophy wives, intelligence agency go-fers, political concubines and bone-breakers. And besides, it’s enormous fun when it’s not scary as sh*t.

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Here’s a taste of Chapter 12 – The Generalissimo of Globalization – from the film-enhanced eBook edition. [And more on the 1% Greece-ing us, check out the upcoming issue of In These Times.]