Workforce, Population, Jobs by Age-Group

Here are a few demographic-related charts of the workforce, civilian non-institutional population, and jobs, by age-group, from reader Tim Wallace.

Change in the Number of Jobs Since 1970



Civilian Non-Institution Population Since 1970



Workforce Since 1970



Percent of Population in Workforce Since 1970



Number in Age Group Employed



Percent of Age Group Employed Since 1970



Wallace writes ...

Mish,

The attached charts are eye openers.

Graph 1 Comments

The first chart shows the change in the number of jobs and the population since 2007. It shows us that in the 16-19 age group the population has shrunk by 239,000, while the number of jobs in this age group has shrunk by 1,415,000! In the 20-24 age group the population has grown by 1,625,000 while the number of jobs has shrunk by 362,000. For the under 25 age group we have 1,777,000 less jobs with 1,386,000 more people.

In the 25-54 age group that everyone always focuses on, we see a loss in population of 1,382,000 people since August of 2007, but an even greater loss in jobs - 5,940,000! Add to this the loss of 1,777,000 up above and we see the 16-54 age groups have lost 7,717,000 jobs since 2007. And, the population has basically been flat.

Since 2007 we have added 13,745,000 people to the population over age 55. We have also added 5,820,000 to the number employed in that age bracket.

Jobs were lost in every age bracket except the 55+, with 16-19 dropping 22.6%, 20-24 falling 2.6%, 25-54 going down 5.9% and 55+ going UP 22.7%!

Graph 2 Comments

The second graph shows the Civilian Non-Institutional Population by age - note the basic flat lines on all but 55+. The graph shows the Work Force by age - note once again only 55+ goes up.

Graph 4 comments

The fourth graph shows the number employed by age group. Note that only the 55+ group benefited in the current "Recovery". The other groups are all down from 2007, with 16-19 devastated. Just go in Walmart and McDonald's and you will see it first hand - senior citizen workers abound.

Graph 5 comments

The fifth graph shows the percentage of an age group that is employed. The percentage plunged in every age group except 55+.

Graph Six Comments

The last graph shows the percentage of the age group employed. It follows the exact trend of the fifth, as it must.

Those in sales and marketing you should focus on the 55+ age group. Forget the teenagers, they are contributing little, and their parents are sliding fast! Those in the 20-24 hope the  55+ start to retire, but in increasing percentages, they choose not to

Very interesting data, thanks to the BLS for giving us access to the ranges in the data base.

As usual, all data not adjusted for seasonality, just direct comparisons of actual data year on year.

Tim

The charts show something I have repeatedly said since 2008: "kids will be competing with their parents and grandparents for jobs that do not pay a living wage."

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com 

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Germany Accuses US of Spying on Merkel’s Phone; Merkel Phones Obama; Why Should Any Country Trust the US?

The Wall Street Journal reports Berlin Says U.S. May Be Spying on Merkel’s Phone

BERLIN—Germany said it believed U.S. intelligence may be spying on Chancellor Angela Merkel’s cellphone, an intrusion that it said would constitute a “grave breach of trust” between the longtime allies.

Ms. Merkel called President Barack Obama on Wednesday and made clear that such surveillance among allies would be “fully unacceptable,” her spokesman, Steffen Seibert, said in a statement released late Wednesday evening in Berlin.

Mr. Seibert said Ms. Merkel expected U.S. agencies to explain their overall surveillance practices against Germany, “questions that the German government asked months ago.”

Merkel Phones Obama

The Spiegel Online reports Berlin Complains: Did US Tap Chancellor Merkel's Mobile Phone?

German Chancellor Angela Merkel phoned United States President Barack Obama on Wednesday to discuss suspicions that she may have been targeted by US intelligence agencies for years, SPIEGEL has learned.

The chancellor asked for a thorough explanation of serious indications that US intelligence agencies had declared her private mobile phone to be a target in their operations.

She "unequivocally disapproves" of such methods and finds them "totally unacceptable," her spokesman Steffen Seibert said. "This would be a grave breach of trust," he added. "Such practices must immediately be put to a stop."

The unusually strong reaction from the Chancellery was prompted by SPIEGEL research. After the information was examined by the country's foreign intelligence agency, the Federal Intelligence Service (BND), and the Federal Office for Information Security, Berlin seems to have found their suspicions plausible enough to confront the US government.

During her conversation with Obama, Merkel expressed her expectation that "US authorities would provide an explanation about the possible extent of such surveillance practices, and thus answer questions that the German government already posed months ago," Seibert said.

"As a close ally of the United States of America, the German government expects a clear contractual agreement on the activities of the agencies and their cooperation," he added.

In response to the allegations, a spokeswoman for the US National Security Council told SPIEGEL: "The President assured the Chancellor that the United States is not monitoring and will not monitor the communications of Chancellor Merkel."

The spokeswoman did not wish to specify whether this statement applied to the past.

Thank Whistleblower Snowden

We should all thank whistleblower Edward Snowden for many of the spying revelations now coming to light. I think he is a hero.

Unfortunately, as I noted in Hypocrites and Bullies Speak on "The Importance of Trust" president Obama and numerous bullies don't see it that way.

Hypocrites and Bullies

1. Gen. Martin Dempsey, chairman Joint Chiefs of Staff 
2. Rep. Mike Rogers, Head of the House Intelligence Committee,
3. Sen. Robert Menendez, chairman of the Senate Foreign Relations Committee

I would like to point out to all three gentlemen one important fact: Edward Snowden did not undermine trust.

There was no trust to undermine. All Snowden did was prove the obvious.

If there was any trust the US would not have been bugging the offices of the EU and Germany. If there was any trust, France would not be spying on us.

Bullies, Bribes, and Foreign Aid

Please note the bullying by US imperialists. Rep. Mike Rogers (R) proposes “to send a very clear message that we won’t put up with this kind of behavior.”

Excuse Me! What about unconscionable spying by the US on its alleged allies?

Countries should send a very clear message to the US that they will not put up with our severely misguided imperialism. And they probably would except they fear the US might cut off aid.

If you are looking for a reason very few countries have offered Snowden asylum (see Venezuela, Nicaragua offer asylum to Snowden; Double Standards and Hypocrite Allies), you now have an answer.

Thus, we can all thank Rogers for explaining that US foreign aid is really nothing but bribery so the  imperialists, war-mongers, and hypocrites can continue their ways with impunity, totally clueless they are the ones directly responsible for the undermined trust.

Question of Trust

Why Should Any Country Trust the US? They shouldn't, and the US is to blame, not Snowden. Is this about to matter? Let's hope so.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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Measuring What Didn't Happen: Did Obamacare Cause an Increase in Part-Time Jobs? No Says Ritholtz, and Reuters; Yes, Says Mish

A friend sent me an article in Reuters today that claims Little evidence yet that Obamacare costing full-time jobs.

One in five businesses in the service sector think President Barack Obama's signature healthcare reform has hurt employment at their firms over the last three months, a National Association of Business Economics survey showed on Monday.

But there is little discernible impact in the employment figures released in recent months, including the September numbers out on Tuesday. The number of people with part-time jobs who want full-time work, for example, was essentially flat in September at 7.9 million.

The number of part-time workers spiked in 2008, well before Obamacare was enacted, and has been slowly falling as a share of total employment since 2010. In September people working part time because they could not find full-time work made up 5.5 percent of the employed, unchanged from August. The spike in 2008 and the steady drift downward since then suggests the elevated level of part-time workers is more likely due to the economy's weakness.

Did Obamacare Cause an Increase in Part-Time Jobs?

Barry Ritholtz at the Big Picture Blog says "no" in his October 7 post Did Obamacare Cause an Increase in Part-Time Employment?

A reader emailed the following question about this weekend’s WaPo column (ObamaCare: Investing Advice for Senator Ted Cruz):

"How can you make investment decisions about future returns in light of Obamacare driving so many workers to part time status?"

Ahhh, a classic bit of misdirection — an assumption built into a question. The first step in answering that is to verify the reality of that assumption: Has Obamacare actually caused an increase in part-time employment?

As you can see in the black line below, the number of part time workers spiked because of the Great Recession. It peaked and began to slowly reverse before the ACA [Affordable Care Act - Obamacare] was even passed.



No, there does not appear to be an increase caused by Obamacare.

Measuring What Didn't Happen

For now, let's assume the above chart from the Economic Policy Institute is correct. Does that imply there was no Obamacare effect?

Of course not, and Ritholtz should know better.

Even if the EPI chart is correct, it does not show what would have happened had Obamacare not passed.

Realistically, to determine the Obamacare effect, we need to measure what we didn't see (which is what would have happened in the absence of Obamacare).

I am inclined to believe what corporate CEOs are saying given strong evidence they did what they said.

Reuters reported "Many businesses polled by the NABE said they were holding back on hiring due to the costs imposed by the law. The survey also showed 15 percent of service sector firms planned to shift to more part-time workers due to Obamacare."

There is massive evidence that businesses increased part-time hiring due to Obamacare. There is massive evidence of other economic distortions as well.

Obamacare Economic Distortion Synopsis

October 10, 2012: Prepping for Obamacare, Olive Garden and Red Lobster Cut Workers' Hours; Are Other Companies Doing the same?

October 20, 2012: Mish Obamacare Mailbag: Expect More Part-Time Jobs

February 02, 2013: Obamacare in Action: Retail Workweek Hits 3-Year Low

February 19, 2013: Opting Out of Obamacare (the Unaffordable Health Care Act); Not Even Labor Unions Want It

May 3, 2013: Obamacare Affects Part-Time Employment Yet Again; Nullification Bill Passes South Carolina House; Analysis of Healthcare Penalty Rates

May 20, 2013: Obamacare Premiums 47% Higher But Deductibles 27% Lower Than Grandfathered Health Plans; Obamacare Lies

June 21, 2013: Obamacare Effects Hit Local Governments, Small Businesses, Temp Staffing Agencies; Chicago Dumps Retirees Into Obamacare

July 8, 2013: Trends in Full and Part-Time Employment; Obamacare Job Double Counting and Other Economic Distortions

July 12, 2013: "Win-Win" Situation for Employers to Not Offer Healthcare to Part-Time Employees; Now Ain't That Special?

OK Mish, Why Doesn't the EPI Chart Support Your Case?

1. Perhaps the Obamacare distortions were masked over by other hiring trends.
2. Perhaps the BLS data will be revised away later, showing what really happened.
3. Perhaps the assumption we made earlier, "the EPI chart show by Ritholtz is an accurate reflection of the current state of affairs", is in fact, a bad assumption.

Let's explore point number three. Please consider a chart of BLS data, taken from the St. Louis Fed (Fred) Website.

Employed, Usually Work Part Time 2000-2013



Let's hone in on that for a closer look.

Employed, Usually Work Part Time 2008-2013



Questions and Answers

Q.What would the chart look like without Obamacare?
A. Better

Q. Was the Obamcare hiring effect delayed until 2012?
A. Probable. That is when CEOs started complaining. That is when numerous restaurants cut back hours.

Q. Will we see BLS revisions that make the reported data look worse?
A. Probable

Q. Does the Economic Policy Institute chart reflect reality?
A. The chart from the St. Louis Fed is a closer approximation, but revisions are likely

Q. Has Obamacare actually caused an increase in part-time employment?
A. Absolutely.

That is what the chart suggests (even before expected BLS revisions). That is what CEOs say. And that is what plain common sense suggests in the first place (even though we will not understand the full impact for years, if ever).

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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ECB President Mario Draghi Announces New Stress Tests; Translating "Draghize"

When it comes to stress tests, especially for European banks, the one thing history suggests is the tests will be essentially stress-free, by design. Why should this time be any different?

Nonetheless, European Central Bank President, Mario Draghi Says ECB Won’t Hesitate to Fail Banks in Stress Tests.

Translating Draghize

For those of you who do not speak Draghize I offer these translations.

Draghize: "Banks do need to fail to prove the credibility of the exercise".
Mish: We are carefully scrutinizing several non-critical banks, looking for a couple of scapegoats, hoping to fool the public regarding the credibility of the exercise.

Draghize: "If they do have to fail, they have to fail. There’s no question about that."
Mish: If any big banks are in trouble. They won't fail. There’s no question about that. 

Draghize: "The test is credible because the ultimate purpose of it is to restore or strengthen private sector confidence in the soundness of the banks, in the quality of their balance sheets"
Mish: The test is credible because we say it is.

ECB Executive Board member Joerg Asmussen: "This is our third and last chance to restore confidence after two previous stress tests by the EBA failed to do so."
Mish: We are praying this stress test does not blow sky high as fast as the last two did.

Draghize: "The region’s governments will be ready to fill any capital holes that emerge as a result of the stress tests."
Mish: The region's governments are totally unprepared to fill any capital holes that emerge as a result of the stress tests. 

Draghize: "I have no doubt whatsoever that backstops will be there - - which doesn’t mean that they will have to be used because first and foremost it’s private money that needs to be used. There’s an explicit commitment to have in place proper, adequate national backstops by the time the exercise is being carried out."
Mish: Bondholders will not suffer as a result of any capital shortages in our hand-picked failures. If anyone needs to suffer, it will, as usual, be taxpayers.

Draghize: "A substantial amount of private capital has been raised so we’re not starting from scratch but certainly, it’s the beginning of a new way of doing things."
Mish: We are starting from scratch. Private capital is inadequate. This is of course why the tests must essentially be stress-free.

To help explain why there will not be any capital shortfalls, please see New Rules for Italy Banks "I'll Guarantee Your Derivatives If You Guarantee Mine"

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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New Rules for Italy Banks "I'll Guarantee Your Derivatives If You Guarantee Mine"

New Basel III rules require extra capital for derivative positions. Banks in Italy have already figured out a way around that rule.

Eurointelligence reports ...

We have been on the watch-out for stories that government and central banks encourage banks to continue to act as buyers of last resort of government debt. Here is one from Reuters, according to which Italy is planning to circumvent the Basel III requirement that banks must hold more capital against derivative contracts through which they hedge their exposures on government bonds.

Reuters has the story that the 2014 budget includes a two-way guarantee whereby banks and the state guarantee each others’ derivative positions.

Mutual Guarantees

Reuters reports Italy plans to offer guarantees on government bond derivatives

A new system of guarantees Italy is planning to introduce will make it cheaper for banks to negotiate derivative contracts with the Treasury over government bonds, potentially increasing their ability to buy Italian debt.

The move is linked to new Basel III international banking rules that require lenders to hold more capital against their exposure to derivatives contracts.

Under the new system, outlined in a draft decree linked to the budget law that parliament must pass by year-end, the Treasury and the banks will exchange cash sums on a short-term basis to guarantee their respective derivatives positions, based on their mark-to-market value.

The sums held as collateral will bear interest at money-market rates.

Eurointelligence comments ...

There is nothing technically or legally appalling about the two-way guarantee of derivative positions, but it nevertheless cements the absurd inter-dependence of the Italian state and the Italian banking system. The eurozone crisis resolution policies critically depend on banks behaving as national players. Everything we see is geared towards the maintenance of this extremely unhealthy situation.

The leverage of European banks to their own sovereign debt is enormous. This mutual guarantee agreement encourages banks to continue the leverage party.

Another opportunity to rein in moral hazards just flew out the window. Every bank in Europe will do the same.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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Montebourg Announces Deal Between Goodyear and Titan to Save Union Jobs (One Problem - Goodyear Did Not Even Receive the Offer)

The politics in France get curiouser and curiouser (to put things mildly).

On Monday, the Minister of Productive Recovery, Arnaud Montebourg, announced a deal between Titan and Goodyear that would save union jobs in tire manufacturing plants.

The problem, and a significant one, is that Goodyear did not agree to the deal. Heck, the CEO of Titan denies even making an offer.

Via translation from Les Echo, please consider Goodyear Amiens: new imbroglio between Montebourg and Titan

It's a pretty mess that would be almost amusing if it was not hundreds of jobs at stake Monday, the Minister of Productive Recovery Arnaud Montebourg, told AFP that the U.S. tire manufacturer Titan had made a new offer of a partial recovery for the site of Goodyear Amiens Nord, which employs 1,200 workers, the closure was announced in January by the company management.

The proposal concerns the activity of agricultural tires and covers "333 jobs in the Amiens plant whose maintenance is guaranteed for four years," the minister said. Titan International would even be willing to invest "one hundred million minimum on the site".

Alas, Maurice Taylor, the CEO of Titan, contacted by AFP, declined to confirm this announcement. "I am not aware of anything related to your country of great wines and beautiful women," he responded ... Besides, "the management of Goodyear has not received any new offer" from Titan.

Amusing Background

This tire story has an amusing background.

I wrote about it on February 19, in Incredible Letter from CEO of Titan to France Minister of Industrial Renewal, Blasting French Unions and USA: "How Stupid Do You Think We Are?"

"Les Echos" received a copy of the letter which the President of the American Titan told the Minister of Industrial Renewal why he threw in the towel on purchasing the Goodyear plant Amiens Nord, in a very direct style.

"How Stupid Do You Think We Are?"

Here are some excerpts I transcribed from an image of the letter posted on Les Echos.

Dear Mr. Montebourg:

Goodyear tried for over four years to save part of the Amiens jobs that are some of the highest paid, but the French unions and French government did nothing but talk.

I have visited the factory a couple of times. The French workforce gets paid high wages but works only three hours. They get one hour for breaks and lunch, talk for three, and work for three. I told this to the French union workers to their faces. They told me that's the French way!

The Chinese are shipping tires into France - really all over Europe - and yet you do nothing. In five years, Michelin won't be able to produce tire in France. France will lose its industrial business because government is more government.

Sir, your letter states you want Titan to start a discussion. How stupid do you think we are? Titan is the one with money and talent to produce tires. What does the crazy union have? It has the French government. The French farmer wants cheap tire. He does not care if the tires are from China or India and governments are subsidizing them. Your government doesn't care either. "We're French!"

The US government is not much better than the French. Titan had to pay millions to Washington lawyers to sue the Chinese tire companies because of their subsidizing. Titan won. The government collects the duties. We don't get the duties, the government does.

Titan is going to buy a Chinese tire company or an Indian one, pay less than one Euro per hour and ship all the tires France needs. You can keep the so-called workers. Titan has no interest in the Amien North factory.

Best regards,
Maurice M. Taylor, Jr.
Chairman and CEO

Perhaps there was some exploratory talk, perhaps not. Regardless, facts show the deal Montebourg announced is totally fictional.

Whether or not some deal eventually transpires,  Montebourg looks like (and is) a complete fool.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com 

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Treasury Secretary Pleads for Higher Taxes, More Government Spending, Big Farm Bill, No Cuts in Food Stamps

In a New York Times Op-Ed, Treasury Secretary Jacob Lew made a plea for more government and higher taxes.

Of course,  his title was not "more government and more taxes". Rather, Lew disguised his message by labeling it Lessons From a Crisis.

Let's take a look at some details.

Lew: Without question, the government shutdown and the debt ceiling impasse have led to economic hardship in every corner of the country. While we do not yet know the exact magnitude of the damage, these events have generated unnecessary headwinds for the economy. We should never again take this country to the point of near-default in order to exact political gain. We can start by hammering out a budget agreement that builds on the progress we have already made to lower our budget deficits.

Mish translation: Without question, we can start by raising taxes.

Lew: This is an opportunity to improve our nation’s long-term fiscal health, and it should be achieved through a comprehensive package that shrinks our deficits, protects Medicare and Social Security for those who rely on it, and expands our economy well into the future.

Mish translation: This is a welcome opportunity to raise taxes and throw more money at Medicare and Social Security.

Lew: That means closing wasteful tax loopholes and making targeted investments to improve our education system, increase domestic energy production, and expand our manufacturing base.

Mish translation: Let's raise taxes and target more money for education.

Lew: We must come together to fix the blunt spending cuts known as sequestration, once and for all. These indiscriminate, across-the-board cuts, which went into effect earlier this year, were intended to be so mutually disagreeable that they would force Congress to find agreement on a balanced package of deficit reduction measures.

Mish Translation: Let's roll back the miniscule cuts in the projected increase in government spending. To do that, we need a balanced package of tax hikes.

Lew: Congress should pass comprehensive immigration reform.

Mish Translation: Illegal immigrants are here to stay, and welcome. They vote Democratic, don't they?

Lew: Another piece of bipartisan legislation that has passed the Senate, but not the House of Representatives, is the farm bill. Getting this bill signed into law is not only important for America’s farmers and protecting America’s most vulnerable children, it is important for our economy.

Mish translation: Whoa! Don't cut food stamps.

Ready to Rumble Over the Farm Bill

Few realize this, but the biggest component of the farm bill is food stamps. Please consider Ready to Rumble Over the Farm Bill

The first meeting of the House and Senate conference committee on the farm bill promises to be the biggest spectacle in American agricultural and nutrition policy in decades.

House Agriculture Committee Chairman Frank Lucas, R-Okla., who will chair the conference, would have preferred to hold the meeting this week. But the Senate, exhausted from the negotiations to end the government shutdown, is taking the week off, so the meeting is expected to take place the week of Oct. 28.

The biggest difference between the Senate and House bills is that the Senate bill retains the 1938 and 1949 farm laws as the basis for agricultural programs while the House bill would make the 2013 commodity title permanent law. Lucas wrote the change out of fear that it will be even harder to pass a farm bill in five years, but with most farm groups and Democrats opposed to it he will have a hard time prevailing.

Beyond permanent law, there are five flash points in the bill. Here is a guide to those issues and to the role that conferees may play in them:

Nutrition: This is the big kahuna of the farm bill. The Senate bill cuts only $4 billion over 10 years from food stamps—officially the Supplemental Nutrition Assistance Program—while the House bill would cut $39 billion through a series of provisions that Democrats say will lead to increased hunger. House Speaker John Boehner, R-Ohio, appointed Rep. Steve Southerland, R-Fla.—who has made food stamps his main issue and wrote the amendment to which the Democrats object the most—to the conference committee even though he doesn't serve on Agriculture.

Senate conferees are expected to oppose a big cut to food stamps, but two Republican senators who have been strong supporters of food stamps over the years—Cochran and Pat Roberts of Kansas—now face tea-party primary opposition and could feel forced to support bigger cuts. Roberts, who saved the structure of the food stamp program in the 1996 welfare-reform negotiations, has called for big food-stamp cuts this year while Cochran, whose state of Mississippi has one of the highest levels of food-stamp beneficiaries, has remained a steadfast advocate for it.

Lucas has said the size of the food-stamp cut will have to come from "on high," meaning Boehner, Senate Majority Leader Harry Reid, D-Nev., and President Obama.

Crop insurance: Costing about $9 billion per year, this program has become the pillar of the farm safety net and the biggest target outside food stamps for budget savings. The Senate farm bill contains a provision that would reduce crop-insurance subsidies by 15 percentage points for farmers who make more than $750,000 a year. Written by Senate Majority Whip Dick Durbin, D-Ill., and Sen. Tom Coburn, R-Okla., it was adopted on the Senate floor over the objections of the Senate Agriculture Committee.

The House bill does not call for a premium subsidy reduction, but last week the House adopted a resolution sponsored by Budget Committee Chairman Paul Ryan, R-Wis., to agree to the Durbin-Coburn amendment. Few if any members of the conference committee are likely to support Durbin-Coburn or other cuts and payment limits on crop insurance but are under pressure to come up with budget savings.

Commodity title: With both bills eliminating the $5 billion in annual direct payments that crop farmers have been getting whether prices are high or low, there will be a battle over the structure of a new commodity program. The centerpiece of the Senate bill is a program to pay farmers for "shallow losses" that crop insurance doesn't cover, although this year the Senate bill makes concessions to rice and peanut farmers who wanted an increase in target prices. The House bill is target-price-based, but includes a shallow-loss program. Lucas and Peterson are big advocates of target prices and the issue is whether Senate conferees from the South urge adoption of the House commodity title and how hard Northerners fight for their program.

Dairy: The Senate farm bill contains a new Dairy Security Act favored by dairy farmers and developed into legislation by Peterson. The House Agriculture Committee passed the measure, but it was amended on the House floor to take out what dairy farmers call a market stabilization program and dairy processors call supply management.

The sponsors of the House amendment—former House Agriculture Chairman Bob Goodlatte, R-Va., and Rep. David Scott, R-Ga.—were kept off the conference committee but Boehner so dislikes supply management he has labeled it communist and Peterson has said he worries that Boehner's enlargement of the conference committee to 17 Republicans and 12 Democrats could mean it will be difficult for the House to concede to the Senate on the issue.

Farm Bill Predictions

1. A bipartisan effort by farm-state Senators and Legislators will prevent major rollbacks in crop subsidies.
2. Senate Democrats will prevent needed changes in the food stamp program.
3. Despite pressure to come up with budget savings in the farm bill, the best we can realistically hope for is that it does not increase the deficit by much.

Mish Alternative Food Stamp Proposal

• Prohibit food stamp purchases of potato chips, snacks, soft drinks, candy, pizza, frozen foods of any kind except juice.
• Limit food stamp users to generic (store brand vs. name brand) dried beans, rice, peanut butter, pasta, fresh vegetables, fresh fruit, frozen (not bottled) juice, canned vegetables, canned soup, soda crackers, poultry, ground beef, bread, cheese, powdered milk, eggs, margarine, and general baking goods (flour, sugar, spices).
• Calculate a healthy diet based on current prices, number in the family, ages of recipients, and base food stamps allotments on that diet.
• In the interest of health and cleanliness, expand the food stamp program to include generic soap and laundry products.

My proposal will not only lower the cost of the food stamp program, the resultant healthier diets would lower Medicaid and Medicare costs as well.

Moreover, my proposal would give people a strong incentive to get off the food stamp program without intrusive, costly big-brother ideas like drug testing which cannot possibly work for the simple reason that anyone who fails will steal to get food rather than starve.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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