The Great Recession's Soup Lines
You know your kids are growing up when they ask a question like the one my daughter asked a few days ago, “Hey, dad, do you think we’ll experience a depression in your lifetime or mine?” As much as I’d like to shelter her from life’s unpleasant realities, that question deserves an honest answer.
How would you answer? Before responding, I thought of the 1930s, the Great Depression, and black-and-white photos of soup lines.
“Well, we recently experienced a worldwide Great Recession,” I explained. Thinking about our family expenses, I added, “It feels like we’re still in that recession.”
“During the 1930s,” I continued, “the effects of the Great Depression, were easily recognizable. But, we don’t see food lines today because the federal government sends food assistance directly to homes in the form of ‘food stamps.’ But tens of millions of people are struggling.”
A few days later a friend sent me a report by Byron Wien of Blackstone titled “The Ten Surprises of 2014” that includes a chart titled “Food Stamps – The Great Recession’s Soup Lines,” which illustrates the staggering growth of the program since 2005. The number of participants has nearly doubled since then to over 47 million people. I showed the report to my daughter. If she couldn’t see food lines in our town, she could see them in this chart.
Wien’s report didn’t surprise me because I had just finished analyzing our 2013 family expenses and preparing our 2014 budget. Even though we’re frugal, food was our #1 expense in 2013. At a staggering $1,200 per month for a family of six, our spending was consistent with a “low cost plan” according to the United States Department of Agriculture. Our next largest expenditures in descending order were: household supplies (mostly purchased at Wal-Mart), education, charitable donations, mortgage payments, taxes, health insurance, out-of-pocket health expenses, clothing, gasoline and utilities. Where’s savings on that list? We haven’t been able to save for years. Our checking account is a conduit to the grocery store, Wal-Mart, the gas station, and other businesses I’m thankful for.
I’m giving you a look at my personal budget because, even though I’m better off than a lot of people, my story may provide some insight into what’s happening in America: It’s getting increasingly difficult to maintain a simple family lifestyle. What’s the answer to this malaise?
A good starting point is to understand financial reality on two levels – family budgets and the U.S. economy.
Families have to tighten their belts to stay afloat. For example, last year, our family spent an average of $6.53 per person per day on food. Our 2014 target is $5.55. We’ve also put our four teenagers on a budget. Rather than pay for their clothes and extras like an occasional movie or McDonald’s, we’re giving them a monthly allowance and incentives to earn more through a list of chores. They’ll decide how to spend their money – clothes, fun, whatever, it’s up to them. This will help mom and dad stay on budget in 2014 while teaching our kids to manage money.
Now, consider the state of the U.S. economy. Some important facts: one in seven Americans is receiving food stamps; the unemployment rate that includes long-term discouraged workers has climbed steadily to over 20 percent, even though the official rate has fallen to seven percent; Obamacare continues to cause businesses to hold off on hiring and expanding; trillion-dollar deficits are the new normal; inflation calculated the way it was in 1980 is more than nine percent (not the two percent currently being reported); and the Federal Reserve is doubling down on the monetary blunders that led to the 2008 crash and the Great Recession.
That is the truth about America today. We have to come to grips with the reality that, as our 40th president was fond of saying, “Government is not the solution to the problem, government is the problem.” I’d like to add that “We the people” are in charge of our government.
So, let’s return to my daughter’s question. Will we experience a depression in my lifetime or hers?
“Absolutely,” I told her, “if our federal government doesn’t change its ways.” But, there’s hope. There’s always hope. One way to turn America in the right direction is to tell our kids the truth about what they face. After all, my daughter will be voting in two years.
Lee S. Wishing, III, is the administrative director of The Center for Vision & Values at Grove City College.