Recent moves by the Biden administration to bolster food stamp benefits by $1 trillion might be tied to a substantial 15% surge in grocery prices, a government watchdog’s findings suggest.

In an attempt to revise the nutritional standards of the Supplemental Nutrition Assistance Program (SNAP) in 2021, the Department of Agriculture expanded its scope by a remarkable 27% from the levels seen before the COVID pandemic.

This observation was put forward by the Foundation for Government Accountability.

From the span of 2019 to 2022, there was a more than twofold surge in program spending, skyrocketing from $4.5 billion in 2019 to an astonishing $11 billion in 2022, as highlighted by the recently released study by the government accountability organization.

Despite the expiration of some emergency provisions, spending reached $8.6 billion in March 2023.

Moreover, an upward trajectory of 5.8% is anticipated for the year.

This uptick in program scope is anticipated to set US taxpayers back by over $1 trillion in the coming ten years, as estimated by the Congressional Budget Office.

The watchdog group claims that the escalation in food stamp expenditure has spurred grocery prices and added to the inflationary pressure.

“USDA cooked their books to hike food stamp benefits by 27% — the largest permanent increase in program history. And they bypassed Congress to do it,” Jonathan Ingram, vice president of policy and research at the Foundation for Government Accountability, told Fox News.

“Data show the Biden administration’s overreach led to massive spikes in grocery prices. They’re feeding inflation, not stopping hunger.”

The research referenced World Bank’s retail scanner data post the 2008 Great Recession, indicating that with every 12.5% increment in per-capita food stamp spending, food prices surge by 1%.

Labor Department data, which the group analyzed, showed that between December 2019 and March 2023, prices of items like margarine and eggs surged by over 50%, while frozen vegetables saw a 36% price hike.

The Foundation for Government Accountability also posits that by retracting Biden’s expanded food stamp initiative, Congress could potentially recover upwards of $193 billion in taxpayer funds.

This heightened food stamp expenditure is poised to be a pivotal topic in the impending Congressional debates regarding the reauthorization of the Farm Bill, which dictates a spectrum of spending parameters — from food perks for city dwellers to facilitating rural broadband.

While Republicans are advocating for a curtailment in SNAP expenditures, Democrats tread with caution, especially in light of a recent agreement with House Republicans that necessitated work requirements for certain food stamp beneficiaries in exchange for the upliftment of the federal debt cap earlier this year.

As our loyal readers, we encourage you to share your thoughts and opinions on this issue. Let your voice be heard and join the discussion below.

Source

Durham County in North Carolina has set forth a new pilot program centered on guaranteed income, aiming to assist underprivileged families within its jurisdiction.

Christened “DCo Thrives,” this initiative secured unanimous support from the Durham County Board of County Commissioners during a recent session.

As a part of DCo Thrives, 125 selected families will be awarded a guaranteed monthly income of $750, followed by subsequent surveys to measure the initiative’s impact.

This move from Durham is in alignment with a series of other such programs that have been initiated across various U.S. cities.

The primary objective of these programs remains testing the potential and efficacy of universal basic income (UBI) — a concept advocating that a pre-determined amount of monthly income could lead to enhanced alleviation of poverty and an uplifted standard of living.

To further evaluate the program’s implications, another sample set comprising 125 individuals, who aren’t beneficiaries of the monetary grant, will be surveyed to juxtapose the results against those who did receive the $750 monthly boost.

Financial backing for DCo Thrives is sourced from $1.69 million secured from the American Rescue Plan Act — a COVID-19 relief bill passed shortly after President Biden’s inauguration.

Criteria for enrollment in the program stipulate that beneficiary households must encompass a child aged 18 or below and have an income level equal to or below 30% of the county’s median income.

In a statement to ABC 11, Chairwoman of the Durham County Board of Commissioners, Brenda Howerton, accentuated the program’s child-centric focus.

“Children cannot thrive. If their parents are not thriving and they don’t have a house to live in, if they don’t have food for their children, our children cannot thrive, and they cannot learn,” Howerton articulated.

Historically, this isn’t Durham’s maiden venture into UBI-aligned pilots.

A prior initiative titled “Excel,” initiated by the City of Durham last year, disbursed $600 monthly stipends to 109 formerly incarcerated individuals. Though this initiative culminated earlier this year, Durham earmarked $1 million in its budget for program continuation.

UBI’s proponents champion its potential in facilitating more feasible employment prospects due to diminished economic constraints.

They further believe in its capability to aid families in navigating healthcare and education hurdles. Conversely, UBI’s critics perceive it as financially unfeasible on a national scale, emphasizing the enormous tax implications it could trigger.

Andrew Yang, during his 2020 presidential campaign run, brought UBI into the limelight, labeling it as a “Freedom Dividend.”

The wave of UBI trials isn’t just domestic.

On an international scale, notably, an expansive UBI pilot is underway in Africa. Spearheaded by GiveDirectly since 2017, this trial has involved transferring funds to around 20,000 individuals across nearly 200 Kenyan villages. An additional 100 villages serve as a control group in this study.

As our loyal readers, we encourage you to share your thoughts and opinions on this issue. Let your voice be heard and join the discussion below.

Source

Starwood Capital Group’s CEO, Barry Sternlicht, warned back in November about the damaging consequences of rising Federal Reserve interest rates on the U.S. economy.

His warning seems prescient now as his company recently defaulted on a $212.5 million mortgage for an office tower in Atlanta, proving the dire predictions accurate.

Federal Reserve has been persistently increasing interest rates to counteract inflation, making loans progressively more expensive.

This steady rise in rates has adversely impacted both housing and corporate sectors.

Notably, last month, the Federal Reserve didn’t raise the key interest rate for the first time in the past 15 months.

However, according to Fed Chair Jerome Powell, this breather could be ephemeral, with at least two more hikes anticipated before the year concludes.

The swelling interest rates have compounded the difficulty of housing purchases in an already competitive market.

Average rates are nearing 7 percent, a substantial leap from the 3 percent average mortgage rate in January 2022.

Sternlicht’s Starwood Capital Group couldn’t dodge the fallout from these skyrocketing rates. Unable to refinance or pay off its loan, the company defaulted on its mortgage for Tower Place 100 in Atlanta, Georgia.

Reportedly, lenders have now appointed legal counsel to negotiate an agreement.

In a previous interview with CNBC, Sternlicht expressed his criticism of the Fed’s inflation combat strategy, stating, “It’s not sustainable,” he said.

“What they want to do is clearly suicide.”

Sternlicht further predicted that the looming repercussions of the rate hikes would be preceded by companies slashing their 2023 budgets in anticipation of a recession.

Economists are increasingly warning of a commercial real estate collapse, with values for office, retail, and apartment buildings already dropping by 11 percent and projected to plummet as much as 40 percent, according to Nick Gerli, CEO of Reventure Consulting.

Bottom Line

Starwood Capital Group is not alone in its plight. Several other corporate landlords are also defaulting, particularly for office buildings, due to weakening demand in the wake of the work-from-home trend during the COVID-19 pandemic.

Sternlicht’s forewarning rings even more ominously true in the current scenario.

The sustained rate hikes will undoubtedly impede the economy’s growth, “It cannot do anything other than that,” Sternlicht had cautioned last November.

Today, his predictions serve as a distressing reality for corporations like his own.

As our loyal readers, we encourage you to share your thoughts and opinions on this issue. Let your voice be heard and join the discussion below.

Source