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May 22, 2009
The Washington economic talk in the Beltway is about the economy bottoming out, green shoots of recovery sprouting in all sorts of places and glimmers of hope on the horizon, despite the economy shedding close to 600,000-700,000 jobs a month due to a fall in consumer demand. The standard response, when GM is moving into bankruptcy and the national trajectory is falling wages and jobs, is that there is a lag time for unemployment.
Sasha Abramsky, the author of Breadline USA, says in an op-ed in The Guardian that for tens of millions of Americans, things are looking extraordinarily bleak economically these days. Americans in all types of communities struggle to put any type of food on the table come the end of the month when money runs out and the social safety net isn't there to catch them.
As the economy has tanked, tens of millions of people have, quite literally, become unable to buy enough food to survive.....left to the tender mercies of the market, they would now be slipping into malnutrition, even starvation. They literally don't have either the money or the credit to buy the basic amounts of calories needed to survive. They routinely skip meals in order to put enough food on their kids' plates, or they eliminate necessary foods (in particular proteins and fresh produce) from their diets to save a few pennies here and there.
He says that they aren't starving is because, in the arena of food distribution America's frayed social safety net remains somewhat intact. There are 32 million Americans now receiving for food stamps which provide them with $16-50 a week for food (depending on assets).
Abramsky, a senior fellow at the New York based think tank Demos, adds that there are millions of poor people today who don't access food stamps and these men, women and children live on hand-me-down food, bags of out-of-date breads and old canned produce, past-sell-by-dairy products and ramen noodles.
For middle age working class Americans it is a world of disappearing pensions, slim prospects for new jobs, and vanished medical benefits. Many have, as a result, lost their homes.
Will America's future be one of years of deflation and stagnation?
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Abramsky has an earlier op-ed on California in the Guardian. It's gone bust.
He says this about Sacramento, California:
The latest unemployment numbers in California show declines in employment within the healthcare sector, and universities are madly trying to pare their budgets as funds from donors and the state shrivel.
Abramsky says that California now reports an 11.2% unemployment rate--- the highest unemployment rate the state has experienced since 1941. At the same time as the private sector has imploded, California's state and local governments have also veered toward fiscal collapse. It's not an exaggeration to say that California isn't in much better condition financially than General Motors or Chrysler.
Things look bad. No green shoots anywhere.