Food stamp usage continues to swell despite improving economy
According to the Wall Street Journal, enrollment in the Supplemental Nutrition Assistance Program, otherwise known as food stamps, has soared 70 percent since 2008 to a record 47.8 million as of December 2012. Congressional budget analysts believe participation will rise again this year. Reasons for the increase are a sluggish economy, an increasing poverty rate and a push by the states to get individuals signed up for the federal program rather than state assistance. Additionally, the new rules under the Obama administration allow people with higher incomes and more savings into the program. Last year, $74.6 billion was spent on food stamps by taxpayers. In 2007, the amount was $30.4 billion. Fifteen percent of Americans now receive food stamps compared to the 8 to 11 percent in 2009. The average monthly benefit is $133.
American-US Airways merger approved by bankruptcy court
American Airlines won bankruptcy court approval on Wednesday to merge with US Airways and form the world’s biggest airline. The Associated Press reports that the judge declined to approve the $20 million severance package for the current CEO of American’s parent corporation. The merger still needs approval from the Department of Justice and the US airways shareholders. The airline will have 6700 daily flights and an annual revenue of approximately $40 billion.
OECD believes European recovery elusive
The Organisation for Economic Development and Cooperation based in Paris believes the Euro zone will not experience a meaningful recovery until at least the second half of 2014. The Financial Times indicates that the European Commission expects the bloc’s economy to contract in 2013. The OECD forecasts a divergence between growth in Germany compared to the rest of the bloc. It expects the economies of Germany, France and Italy will grow by 0.4 percent in the first quarter and 1 percent in the second quarter, due primarily to strong performance by Germany. Overall, the French economy is expected to shrink this year. The OECD predicts that the United Kingdom will avoid a triple dip recession and grow by 0.5 percent in the first quarter. The US and Japan are predicted to return to moderate growth.
Cyprus banks re-open
Banks in Cyprus reopened today to customers for the first time in nearly two weeks. According to the Associated Press, large lines formed outside of the banks. Banks in Cyprus have been closed since March 16 as the country tries to qualify for a 10 billion euro bailout from the European Union. At some banks, the opening was delayed due to computer glitches. Initially, all deposits were going to be subject to a tax of up to 10 percent of the deposits, however, that tax was soundly rejected by the Parliament. Instead, severe losses will occur to deposits over 100,000 euros in the country’s two largest banks, Laiki and Bank of Cyprus. Laiki will be broken up and the good assets absorbed by Bank of Cyprus. Although the banks have re-opened, depositors are subject to strict limits. No withdrawals can exceed 300 euros per day. Checks can be deposited but not cashed and payments can not be made in excess of 5,000 euros. The restrictions are in place until at least next Wednesday.
Student loan debt surging
Student loan defaults surged in the first three months of 2013 while efforts to collect bad loans are faltering, according to CNBC. Credit rating firm Equifax said $3.5 billion in government and private student loans went bad in the first three months of 2013, the most since the company began tracking the number. The US Department of Education now says that 6.8 million federal student loan borrowers are now in default, representing $85 billion in debt. The government indicates its collection efforts for more than $1.1 billion in defaulted loans are stuck in computer limbo and are not being pursued. Therefore borrowers aren’t trying to get their loans out of default. Some of the loans have been turned over to private collection agencies who are allowed to garnish 15 percent for their fees.
Kids meals still fall short on nutrition
The Center for Science in the Public Interest (CSPI) says that kids’ meals at fast food chains still fall short on nutrition, despite advertising promoting how healthy they have become. USA Today reports that chicken fingers are still the most popular kids’ meal and these meals contain more than 1,000 calories and are high in sodium and fat. The government’s dietary guidelines recommend that children eat 1200 to 2200 calories for the entire day. CSPI worked with a nutrition research firm to analyze kids’ meals at 41 chains and found that 91 percent of the meals do not meet the National Restaurant Association’s Kids LiveWell menu standards. Nine of the chains, including McDonalds, do not have a single meal that meets the standards. Overall, there has been little improvement since 2008 when the group did a similar study.
Catherine S. McBreen is President of Millionaire Corner. McBreen plans and develops content for Millionaire Corner. Catherine balances editorial content to meet the informational needs of both new and seasoned investors. She designs special monthly surveys on topical issues affecting the economic environment.
McBreen has a B.S. in speech communications from Northwestern University and a J.D. from DePail University College of Law. She is a member of the American Bar Association, the Illinois Bar Association, and the Chicago Bar Association.
Well-known for her expertise in the affluent and retirement arenas, McBreen is a frequent speaker at industry conferences. She has been quoted widely by the financial media, including The Financial Times, The Wall Street Journal, Research, Private Asset Management, On Wall Street, Reuters, Bloomberg News, The Dow Jones Newswires and Worth. Cathy has appeared as a guest on CNBC Closing Bell, First Business Morning News, Neal Cavuto at Fox Business News, ABC and CBS radio.
McBreen is co-author with Spectrem President George H. Walper, Jr. of the book "Get Rich, Stay Rich, Pass It On: The Wealth-Accumulation Secrets of America's Richest Families" (Portfolio, January 2008)
Catherine is the mother of four and is involved in many school and community events.