On Wednesday, Fed Chairman Bernanke has said in principle with his decision to print further $ 85 billion per month that: The U.S. economy is a disaster and he cannot stop it. If he just pumps 10 or 15 billion less per month into the system, then this is disastrous for the economy.
Five years after the crash of 2008 and nothing works, there is no way out. The Fed must continue to print money and to buy the government debt with the printed money, as long as the financial system will finally collapse.
Bernanke has no more ideas and he is powerless. The national debt has reached, as so often, the increased limit of almost $ 17 trillion.
From November 1, the state is no more able to pay its bills. And what has the U.S. Congress therefore decided as a savings measure (austerity measure) on Thursday? They plan to economize $ 40 billion of the social program for food stamps over the next 10 years.
There are currently almost 50 million Americans who participate at the Supplemental Nutrition Assistance Program (SNAP),formerly known as the Food Stamp program, who are subsidized by the state so they can get food on the table. The passed law by the U.S. Congress will throw 3.8 million people out of the Food Stamp program.
This austerity measure comes in addition to the already approved reduction of 10 percent, which comes into force on November 1. The major group of the people, who are affected by the new cuts, are the long-term unemployed without children. They are only allowed to get food stamps for three months within three years.
According to the federal law, the income has to be at or below 130 percent of the poverty line in order to be entitled to benefits. For example, for a family of three, the poverty line for the coming fiscal year is at 1,628 dollars per month.
130 percent would then be 2,116 dollars per month or about 25’400 dollars in annual income. The poverty line is higher for larger families and correspondingly lower for smaller ones.
A person gets $ 189 per month, 2 persons 347 dollars, 497 dollars 3 people, etc. However, a deductible gets deducted. Therefore, a family of three receives $ 101 less, and then actually as a grant only $ 396 at that.
This amount will be charged on a plastic card as credit, which can be used to pay at the checkout when buying food. But one is only allowed to buy certain foods and drinks. For example, Fast Food is no longer allowed.
The politicians have decided to save expenses at the poorest and most vulnerable. Not at the military budget of 670 billion or at the budget for the 17 intelligence agencies, which is around 53 billion dollars. The NSA receives 10.45 billion of this, and the CIA 14.7 billion.
The wars are anyway extra and they have a proposed budget of 80 billion dollars for 2014. They simply conserve 10 billion per year for the poor. How social is that?
Bernanke has therefore announced that the U.S. economy is doing less well than expected. Therefore, the Fed cannot stop the Quantitative easing (QE). No matter what the statisticians say, a substantial inflation takes place as a result of it. Everything will become more expensive for the Americans, and this loss of purchasing power, as always, hits the poorest.
Bernanke will anyway resign soon and his former deputy, Janet L. Yellen, will then certainly take up the post – the first woman as head of the Fed. This will not change anything on the monetary policy, because Janet L. Yellen has already influenced the most decisions taken by the Fed significantly, and they will continue to print money.
U.S. Secretary of the Treasury Jack Lew has warned that the United States will reach its debt limit by mid-October and that it won`t be able to longer pay its bills shortly thereafter. If the U.S. Congress won`t reach an agreement soon, the sum with which the State is able to get into debt, then it will cause an “irreparable damage” to the U.S. economy.
They are not interested in the damage of their austerity measures among the poor. The poor can die a miserable death.