Warm Southern Breeze

"… there is no such thing as nothing."

It’$ all about the money: Who want$ your$, and who lobby$ to get your taxe$?

Posted by Warm Southern Breeze on Monday, September 10, 2012

If you want to know the political news, read the business pages.

It’s all about the money.

Sure, this is a subsidy, and for those who need it – which, increasingly are many (50/311 Million, or 16% of the American population) – it is a life saver. Eventually however, it is an indirect subsidy upon private enterprise. Again, not that it is bad, per se, but that without regulation to prevent abuse of smaller businesses by large, powerful multi-national corporations and their denizen hordes of attorneys, regulations must be enacted.

Part of the greater problem is – according to the CIA World Factbook – that

“Since 1975, practically all the gains in household income have gone to the top 20% of households. Since 1996, dividends and capital gains have grown faster than wages or any other category of after-tax income. Long-term problems include inadequate investment in deteriorating infrastructure, rapidly rising medical and pension costs of an aging population, sizable current account and budget deficits – including significant budget shortages for state governments – energy shortages, and stagnation of wages for lower-income families.”

As Robert Reich and others observed,

Corporate profits are up. Most companies don’t even know what to do with the profits they’re already making. Not incidentally, much of those profits have come from replacing jobs with computer software or outsourcing them abroad.

“Meanwhile, the wealthy don’t create jobs, and giving them additional tax cuts won’t bring unemployment down. America’s rich are already garnering a bigger share of American income than they have in eighty years. They’re using much of it to speculate in the stock market. All this has done is drive stock prices higher.”

So it seems that the bottom-line question is, and remains: How do we correct & rectify the problem of gross income inequity?

Kraft warns on US food stamp cut plans

September 9, 2012 10:06 pm
By Alan Rappeport in Washington

Proposals to impose deep cuts on the $75bn US food stamp programme could eat into profits at food companies that rely on low-income customers stocking up on snacks and drinks.

Tony Vernon, incoming chief executive of Kraft, the US food company, said that the high US poverty level is the biggest challenge he faces and that he opposes cutbacks to food stamp funding, known as the Supplemental Nutrition Assistance Programme.

“The SNAP programme is a programme we are supportive of,” Mr Vernon told the Financial Times, adding that Food stamp users “are a big part of our audience.”

The fate of the food stamp programme is at the centre of a political debate over the US farm bill, which is set to expire at the end of the month. Critics of the cuts warn that they would diminish one of the most important safety nets for the poor, while health advocates argue that the existing food stamp laws subsidise companies that sell junk food.

The US Department of Agriculture, which funds the programme, does not disclose which companies’ products are being purchased with food stamps, but usage is at unprecedented levels. Last week the USDA said that a record 46.7m people used the food stamp programme in June and the US government spent more than $75bn to fund SNAP last year.

The Republican-controlled House Agriculture Committee has backed $16bn in cuts over 10 years. That followed a proposal in June that passed the US Senate, which is controlled by Democrats, to cut food stamp funding by $4bn.

Mr Vernon, who becomes chief executive of Kraft in October, said that at least one-sixth of Kraft’s revenues comes from food stamp purchases and that the portion of sales through the programme was probably larger.

“Our biggest challenge is feeding the 50m Americans who live below the poverty line,” Mr Vernon said. “I personally think that it is so important to feeding America’s families, and I hope that it [SNAP] continues.”

Food companies have fought against legislation that would limit purchases of sugary soft drinks and unhealthy food with food stamps. Fast-food restaurants have been trying to get benefits from the programme.

Last year, Yum Brands, the operator of KFC, Taco Bell and Pizza Hut, drew criticism when it tried to convince lawmakers in several states to allow its restaurants to accept food stamps.

“While much attention has focused on how farm subsidies fuel our cheap, unhealthy food supply, SNAP represents the largest, most overlooked corporate subsidy in the farm bill,” Michele Simon, president of Eat Drink Politics, an industry watchdog group, wrote in a recent report.

http://www.ft.com/intl/cms/s/0/7ed1db42-f932-11e1-945b-00144feabdc0.html

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