Having used the “D” (depression) word for what we will experience over the next few years instead of the “R” (recession) word, I’ve been inundated with emails and texts that say I’m simply out of touch with reality.
So, for everyone who disagrees with me, let me provide a clear dose of reality by revisiting the past.
Most people have an image of the 1930’s and the Great Depression as a time period of monumental job loss, vast family dislocation, widespread famine, and severe uncertainty. The typical head of household toiled daily in order to put bread on the table and keep a roof over their family’s head. New clothes were a luxury and an automobile was in many instances, way out of reach.
Quite frankly, many people are in the exact same situation today. Uncertainty, fear, and even panic are pervading the land as our economy grinds slower and slower.
One reason most people cannot make the link between now and the 1930’s is because of the visual image of the soup kitchens.
Today, we still have this important service, as it seems more and more middle class come to find life’s necessities have become life’s luxuries. A hot meal and a warm bed are definitely finding a new audience. But alas, we haven’t seen the lines of people extending around the block like the 30’s.
Why? Are things not as bad, or is there something else?
In the 1930’s, either you had money or you didn’t. There were no credit cards to max and no home equity loans to borrow against. If you didn’t make your house payment, you were foreclosed on and kicked out of your house.
Today, we let people exist as squatters in their own home because it’s favorable for the bank’s balance sheet. However, the main reason it doesn’t feel like a depression to most people is due to the marvel of food stamps.
Almost 46 million people (a record number) are living on food stamps. There’s no need for a soup kitchen when you’re receiving $135 per month from the government. In fact, most recipients receive $285 per household per month. If food stamps existed in the 30’s, there would have been no need for those long lines that we remember seeing in those old black and white photos.
Recently, it was announced the latest monthly jump in food stamp recipients was almost 1.1 million people. Imagine that being the pattern for the rest of Obama’s term.
Extremely frightening and very sad; that’s a potential of 100 million people receiving the equivalent of a daily soup kitchen pass.
Along with his 40-years of dedication in the financial services industry, Bill is the President and CEO of GPSforLife, has recently authored a highly successful book entitled 44th: A Presidential Conspiracy, publishes his dynamic monthly financial newsletter MacroProfit, and faithfully continues his third decade on the radio with It’s All About Money, which can be heard weekdays on Money Radio in Phoenix and in podcast form on his website (and on smartphone apps) published at billtatro.com weekdays at 5pm Eastern. Bill can be reached via email at firstname.lastname@example.org and on Twitter @tatroshow.