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Ringgit Rallies Most Since 2010 After Elections

By , May 6, 2013 6:53 am

A heap of various Malaysian ringgit notesThe Malaysian ringgit advanced today, posting the biggest gain since 2010, after the elections resulted in the government party securing a clear majority in the parliament. It should allow Prime Minister Najib Razak to continue with his reforms unhindered.

Razak’s Barisan Nasional coalition (also known as the National Front) secured 133 of the 222 parliamentary seats. The victory should allow the Prime Minister to proceed with his $ 444 billion development program to construct railways, power plants and roads. The plan may help Malaysia to achieve status of a developed nation by 2020.

USD/MYR fell from 3.0348 to 2.9778 as of 111:14 GMT today and its daily low was at 2.9698.

If you have any questions, comments or opinions regarding the Malaysian Ringgit, feel free to post them using the commentary form below.

Forex News

Casualty Figures Highest since June 2008

By , May 5, 2013 3:09 am

Casualty Figures Highest since June 2008

According to casualty figures released today by UNAMI, the month of April was the deadliest since June 2008. A total of 712 people were killed and another 1,633 were wounded in acts of terrorism and acts of violence.

The number of civilians killed was 595 (including 161 civilian police) and the number of civilians injured was 1,438 (including 290 civilian police). A further 117 members of the Iraqi Security Forces were killed and 195 were injured.

Baghdad was the worst affected Governorate with a total of 697 civilian casualties (211 killed, 486 injured), followed by Diyala, Salahuddin, Kirkuk, Ninewa and Anbar.

(Source: UNAMI)

Iraq Business News

First Iraq Poll Since US Withdrawal

By , April 22, 2013 1:47 am

Iraqis braved the fear of violence today to vote in the first election since the US military withdrawal, though delayed voting in some parts of the country and an apparently lacklustre turnout elsewhere has cast doubt about the credibility of the vote.

Candidates are vying for seats on provincial councils that have sway over public works projects and other decisions at the local level.

The vote is an important barometer of support for Iraq’s various political blocs heading into next year’s parliamentary elections. Electoral blocs which succeed in a given province could translate that influence into a broader support for the 2014 vote.

The election was carried out without large-scale bloodshed, although officials ratcheted up security precautions to thwart insurgent attempts to disrupt the vote.

The election was a test of the Iraqi army and police, who face a reviving al Qaida insurgency and are for the first time since the 2003 US-led invasion security an election on their own.

Security cordons were set up around polling places, and only authorised vehicles were being allowed on the streets in major cities. Voters dipped an index finger in ink after casting ballots to ensure that each person voted only once.

By early afternoon, the UN special representative for Iraq, Martin Kobler, said the voting was going smoothly. He urged Iraqis to the polls, saying “the credibility of the elections depends also on the turnout”.

There were reports of scattered violence, but no fatalities. Six people were reported wounded.

Mortar shells struck near voting centres in Baghdad and in the towns of Mahmoudiya, Latifiyah and Mussayib, south of the Iraqi capital, as well as in Samarra, to the north, according to police and hospital officials.

A bomb went off near a polling centre in the southern town of Jibala while stun grenades, which emit a bright flash and loud bang, were thrown at polling centres in the towns of Iskandariyah and Beiji.

Deputy Interior Minister Adnan al-Asadi described the security situation as stable.

“The police and army are deployed everywhere to make sure the election day and polling stations are secured. We call upon all the people to go out and cast their ballots because it the best way to face terrorism,” he told state TV.

Militants have stepped up attacks in recent days. A wave of car bombings and other attacks on Monday killed at least 55 and wounded more than 200. Attacks continued throughout the week, including a suicide bombing at a packed café late on Thursday that left 32 dead.

Iraqi state television showed government officials, including Prime Minister Nouri al-Maliki, casting their ballots at the Rasheed Hotel in Baghdad’s heavily fortified Green Zone.

“Today’s message… is to tell the enemies of the political process that we will not retreat,” Mr al-Maliki said after voting. “We will continue building the state of Iraq on the basis of democracy and free elections.”

Voting is taking place at more than 5,300 polling centres for members of provincial councils who will serve in 12 of Iraq’s 18 governorates. Thousands of candidates from 50 electoral blocs are running for 378 positions.

Iraqis last elected members of provincial councils in January 2009.

The last time Iraqis voted, in national elections in 2010, Mr al-Maliki’s Shiite-dominated State of Law coalition faced a strong challenge from the Iraqiya bloc, which sought support from Sunnis as well as secular-minded Shiites.

Majority Shiites have headed the succession of Iraqi administrations that followed the ouster of Saddam Hussein and his Sunni-led regime in 2003.

Iraqiya is running in this election too, but it is now fragmented. Prominent figures such as Parliament Speaker Osama al-Nujaifi and Deputy Prime Minister Saleh al-Mutlaq — who previously banded with Iraqiya — are fielding their own slates of candidates rather than running under the Iraqiya banner.

In Baghdad and the Shiite-dominated south, State of Law also faces a challenge from Shiite rivals the Supreme Iraqi Islamic Council and anti-American cleric Muqtada al-Sadr’s Sadrist Trend. A strong showing by them could undermine support for Mr al-Maliki’s bloc heading into next year’s national elections.

Karim Hani, who voted in Baghdad’s Sadr City district, said he did not plan to vote at first because he was disappointed by the performance of provincial officials. Sectarian concerns changed that.

“I changed my mind because our religious leaders asked us to vote, and mostly because of the threats Shiites receive — mainly from the demonstrators,” he said, referring to anti-government protests in Sunni-dominated provinces that have raged since December.

Governorate councils choose provincial governors and have the right under Iraq’s constitution to call for a referendum to organise themselves into a federal region — a move which could give them considerable autonomy from the central government in Baghdad.

They also have some say over regional security matters and the ability to negotiate local business deals and allocate government funds.

But provincial councils frequently complain that they are hamstrung by restrictions issued by the central government over the extent of their authority.

At least 14 candidates have been killed in recent weeks, and schools meant to be used as polling places have been bombed.

Analysts Ahmed Ali and Stephen Wicken at the Institute for the Study of War, a Washington think-tank, recently wrote that while local or political rivalries may be to blame for some of the assassinations, many bear the hallmarks of al Qaida’s Iraq arm.

Officials have delayed voting in two largely Sunni provinces, Anbar and Ninevah, where large anti-government protests have been held, citing security concerns.

Iraq’s largely autonomous northern Kurdish region will hold local elections in September.

Voters are also not balloting in the ethnically disputed and oil-rich province of Kirkuk, which has not had a chance to elect local officials since 2005 because residents cannot agree on a power-sharing formula there.

Members of Iraq’s police and military cast their ballots last week so that they could focus on securing the country. Electoral officials reported a turnout of 72% in that early voting.

There are 13.8 million voters eligible to participate in the provinces where elections are being held today.

Results are not expected for several days.

http://www.irishexaminer.com

Assyrian International News Agency

Iraq Holds First Polls Since US Pullout

By , April 20, 2013 4:11 am

BAGHDAD (AFP) — Iraqis voted on Saturday in the country’s first polls since US troops departed, a key test of its stability in the face of a spike in attacks that has claimed more than 100 lives.

But the credibility of the provincial elections has come into question, with attacks on candidates leaving 14 dead and a third of Iraq’s provinces — all of them mainly Sunni Arab or Kurdish — not even voting.

“I came this early because I was very excited to vote. I think some of the current provincial council members did not do a good job,” university student Abdulsahib Ali Abdulsahib, 22, told AFP at a polling station in central Baghdad after voting began at about 7:00 am (0400 GMT).

“Security is the most important problem that all of them should be working for; without this, life would be so difficult. I hope this is the first thing they work towards.”

Voters were searched twice before being allowed to enter, and Iraqi security forces had a heavy presence in the area. Only pre-approved vehicles were allowed on the streets, largely deserted except for police and soldiers.

Security forces fielded large presences elsewhere in the country, but measures were toughest in Baghdad.

Despite the tight restrictions, militants were still able to carry out attacks, though casualties were limited.

Overall, eight mortar rounds, one roadside bombing and three stun grenades, all outside Baghdad, left one policeman wounded, officials said.

The elections are the first since parliamentary polls in March 2010 and also the first since US troops withdrew in December 2011.

An estimated 13.8 million Iraqis are eligible to vote for more than 8,000 candidates, with 378 seats being contested.

Every Iraqi who votes “is saying to the enemies of the political process that we are not going back,” Prime Minister Nuri al-Maliki said on state television after casting his ballot at the Rasheed Hotel in Baghdad’s heavily-fortified Green Zone.

“I say to all those who are afraid for the future of Iraq and afraid of a return of violence and dictatorship that we will fight by casting ballots,” Maliki said.

The polls are seen as a gauge of Maliki’s popularity ahead of a general election next year, but major issues affecting voters such as poor public services and rampant corruption have largely been ignored during the campaign.

“I don’t believe this election will provide a magic solution for the problems of Iraqis, and the problems in the country,” said Ihsan al-Shammari, a politics professor at Baghdad University.

But, he said, a well-run vote with a high turnout could bolster Iraqi belief in democracy, a decade after US-led forces ousted now-executed dictator Saddam Hussein.

The lead-up to the vote was blighted by a rise in violence that left more than 100 people dead in the past week and 14 election candidates killed since campaigning began.

Six of Iraq’s 18 provinces are not participating — two because authorities say security cannot be ensured, and four because of various political disagreements.

Those two factors have led diplomats to worry about the credibility of the election, as they could result in a low voter turnout, leading to results that are unrepresentative or not broadly accepted.

Iraqi forces were responsible for security on polling day, the first time they have been in charge without support from American or other international forces during elections since Saddam was toppled.

While violence in Iraq has fallen significantly since the height of its sectarian war, it still faces significant security challenges, mainly from Sunni militants linked to Al-Qaeda who launch attacks in a bid to undermine confidence in the Shiite-led government.

Provincial councils are responsible for nominating governors who take charge of the provinces’ administration, finances and reconstruction projects, and have sway over key local issues such as sewerage and other services.

But while several contentious issues fall under the purview of the provinces, campaigning is rarely on ideological or policy lines. Candidates generally appeal to voters on the basis of shared sectarian, ethnic or tribal identities.

By Prashant Rao

Assyrian International News Agency

Baht Near Record Since 1997

By , April 12, 2013 3:18 am

A fan of 1,000-baht billsThe Thai baht advanced today, trading near the highest level since 1997. Other Asian currencies, except the yen, also advanced on foreign capital inflows.

Investors are attracted to Asian economies, which for the most part looks better than economies in other parts of the world. Aggressive quantitative easing in Japan make speculators takes their money elsewhere. Thailand is one of destinations for foreign capital, especially for carry traders who want to profit from interest rate difference between developed nations and emerging markets. Thai borrowing costs are not as big as in some other counties, but definitely above the near-zero rates of such big economies like Japan and the United States.

USD/THB went down from 29.0350 to 29.0250 as of 8:17 GMT today. The currency pair fell below the 29 level on April 10 for the first time since devaluation in 1997.

If you have any questions, comments or opinions regarding the Thai Baht, feel free to post them using the commentary form below.

Forex News

NZD Near Highest Since 2008 vs. JPY, Drops vs. USD

By , April 5, 2013 8:00 am

A heap of NZD billsThe New Zealand dollar traded sideways near the highest level since 2008 against the Japanese yen today after yesterday’s huge surge. The currency fell against its US peer as worse-than-expected US non-farm payrolls hurt the market sentiment, reducing demand for higher-yielding assets.

NZD jumped together with other currencies against the yen today after the Bank of Japan announced an aggressive quantitative easing. The kiwi weakened today after US payrolls turned out to grow just 80,000 in March. It was more than two times below the market expectations of 198,000.

NZD/USD fell from 0.8420 to 0.8404 as of 13:16 GMT today and its daily low was at 0.8385. NZD/JPY traded near its opening level of 81.10.

If you have any questions, comments or opinions regarding the New Zealand Dollar, feel free to post them using the commentary form below.

Forex News

Breaking: Israel strikes Gaza for the first time since truce. Obama says …nothing!

By , April 3, 2013 4:11 am

Breaking: Israel strikes Gaza for the first time since truce. Obama says …nothing!
By: Bulov on: 03.04.2013 [04:54 ] (46 reads)

Breaking: Israel strikes Gaza for the first time since truce. Obama says …nothing!
http://rt.com/news/israel-strikes-gaza-truce-245/
Get short URL

Israel strikes Gaza for the first time since truce

Published time: April 02, 2013 21:40
Edited time: April 02, 2013 22:47

Israeli F-16 (AFP Photo / GPO)

The Israeli Air Force has launched an airstrike on Gaza, the first such attack since a ceasefire ended the bloody conflict in November. No injuries were reported.
“Occupation planes bombarded an open area in northern Gaza, there were no wounded,” a statement from the Hamas Interior Ministry said.

According to Haaretz, the strike hit near the northern Gaza town of Beit Lahiya, after two mortar shells were fired from Gaza towards western Negev earlier on Tuesday. No Palestinian group has claimed responsibility for that projectile and no injuries were reported after the explosion.

Israel Defense Forces confirmed they had launched an airstrike on a Gaza target Tuesday night, according to the Jerusalem Post.
Israeli military initially claimed that only one projectile had landed in Israel, but later issued a statement saying nothing had landed. “It turns out that nothing fell on Israeli territories,” a spokeswoman told AFP.

Tuesday’s flare up was not the first since the November truce, which was mediated by Egypt after eight days of violence killed 170 Palestinians and six Israelis. In December of last year Israeli soldiers killed four Palestinians who they described as rioters, despite Hamas’ claim that the four men were simple farmers near the border. Both sides maintained the peace in the weeks afterward.

www.iraq-war.ru (en) RSS feed for articles and news

Why Are a Record 15% of Americans on Food Stamps? Up 70% since 2008

By , April 1, 2013 2:06 pm

Why Are a Record 15% of Americans on Food Stamps? Up 70% since 2008
By: Tet on: 01.04.2013 [15:10 ] (95 reads)

The program’s participants are in line with America’s 14.7% poverty rate

A record 15.2% of Americans are on food stamps, as Politix reported recently. Reasons for the growth in food stamps are often portrayed as complex, but the bottom line is simple: 14.7% of Americans live below the poverty line, a number that closely tracks the number on food stamps.

A small proportion of recipients live above the poverty line, as The Wall Street Journal reports. Changes to the program have “enabled states to ease asset and income tests for would-be participants…allowing into the program people with relatively higher incomes as well as savings,” according to the WSJ.

But these loopholes have only expanded the program by a small fraction. “Only 3.5 percent of food stamp users had incomes higher than 130 percent of the poverty line,” writes Jordan Weissman at The Atlantic. He concludes, “our food stamp rolls are eye popping, but they’re not the problem. Poverty is.”

Link

Use of Food Stamps Swells Even as Economy Improves .


The financial crisis is over and the recession ended in 2009. But one of the federal government’s biggest social welfare programs, which expanded when the economy convulsed, isn’t shrinking back alongside the recovery.

Enrollment in the Supplemental Nutrition Assistance Program, as the modern-day food-stamp benefit is known, has soared 70% since 2008 to a record 47.8 million as of December 2012. Congressional budget analysts think participation will rise again this year and dip only slightly in coming years.

The biggest factor behind the upward march of food stamps is a sluggish job market and a rising poverty rate. At the same time, many states have pushed to get more people to apply for SNAP, a program where the federal government picks up the tab.

But there is another driver, which has its origins in President Bill Clinton’s 1996 welfare overhaul. In recent years, the law has enabled states to ease asset and income tests for would-be participants, with the encouragement of the Obama administration, allowing into the program people with relatively higher incomes as well as savings.

The new rules were designed to encourage people to take advantage of the program before they became destitute. By expanding the pool of potential applicants, they are redrawing the landscape of government assistance. It is one reason why SNAP appears to have evolved from a program that rose and fell with the unemployment rate to a more permanent feature of the landscape.

At 12:07 a.m. on a recent morning, Syrises Myers, 34 years old, moved $ 70.18 in groceries including milk and ketchup through a scanner at Dominick’s grocery store near Chicago. The mother of two, the sole breadwinner for her family, knew the store closed at midnight. But she had to wait a few extra minutes for the federal government to transfer her monthly food-assistance benefits onto the purple debit-style card issued by the state of Illinois.

“If I want to be sure my kids can eat, especially when food is low in the house, I have to go at midnight when the food stamps turn on,” said Ms. Myers, a receptionist who earns $ 11 an hour.

While getting assistance from the program, Ms. Myers has been able to save $ 5,600 and recently put a $ 300 down payment on a car. Under older rules, the savings probably would have disqualified her from the program. Under the new, looser tests, that isn’t the case.

The food-stamp rolls have swollen since 2008 and are projected to stay that way for years. In 2008, SNAP enrollment was 28.2 million. Unemployment peaked in October 2009 at 10% and was at 7.7% as of February, but SNAP kept growing.

The Congressional Budget Office predicts unemployment will drop to 5.6% by 2017 but that SNAP enrollment will drop slightly to 43.3 million people, down 4.5 million from the current level.

That makes it very different from the other big federal support program, unemployment insurance, which shrinks as the economy improves. Continued jobless claims dropped to 3.1 million in February after peaking at 6.6 million in May 2009.

Kevin Concannon, undersecretary for food, nutrition and consumer services at the Department of Agriculture, said SNAP is working as designed, expanding to extend benefits to more Americans as poverty levels increase. He said USDA officials expect the program to soon begin contracting as the economy improves.

“While the perception may be different, the actual raw numbers, almost 50 million people under the federal poverty level, is certainly one of the principal reasons why we see the enrollment increases in the SNAP program,” he said. A more aggressive effort to get people on the rolls and changes in the eligibility standards were also factors, he said.

The government spent a record $ 74.6 billion on SNAP benefits last year, roughly equivalent to the combined budgets of the Department of Homeland Security, the Justice Department and the Department of the Interior. Roughly 45% of recipients are children. In 2007, the government spent $ 30.4 billion on the program.

A version of the food-stamp program was used briefly in the 1930s and 1940s. It was made permanent in the 1960s to tackle poverty, part of an expansion of state and federal social welfare programs including Medicaid.

By 1975, 8% of all Americans received government-paid food assistance. The level hovered between 8% and 11% until 2009. The financial crisis, coupled with the ensuing spike in poverty levels and a number of policy changes, pushed the program to unprecedented levels. Now, 15% of Americans are on SNAP.

The average monthly benefit per person was $ 133 last year, which can be used to buy household staples such as cereal, meats, fruits and milk.

For an able-bodied American without children, SNAP benefits are usually only offered for a few months. The federal government has waived these rules for most states in recent years because of high unemployment and will likely rescind the waivers when unemployment falls, program experts say.

“Food stamps have actually saved my life, really,” said Diane Hendricks, 43, who worked for 12 years at a human-resources agency before losing her job in 2009. She and her husband divorced last year, and she filed for SNAP to help buy groceries for her two children, ages 10 and 5. She now lives with a friend and receives $ 380 a month in SNAP.

In late February, Ms. Hendricks began working 20 hours a week at a local food pantry, earning $ 10 an hour. She hopes to stop using SNAP in three months. “The benefits helped me get back on my feet,” she said. “It was one less thing to worry about so I was able to look for work.”

Food stamps have proven polarizing in Washington, with proponents saying low-income Americans need this kind of taxpayer-funded assistance, and critics warning that programs foster dependence on government support.

House Budget Committee Chairman Paul Ryan (R., Wis.), the former GOP vice-presidential candidate, has proposed turning SNAP into a block-grant program that would give states more control over the program, likely leading to cuts.

At a recent event hosted by The Wall Street Journal, Mr. Ryan said when it comes to anti-poverty programs, policy makers should be asking the questions: “Do we have an economic policy of social mobility, of upward mobility? Are we attacking poverty at the root causes, or are we simply merely treating the symptoms of poverty to make it, you know, easier to tolerate and therefore perpetuate?”

In 2011, as the U.S. unemployment rate began to recede from its 2009 peak of 10%, the number of Americans living below the poverty line remained elevated as people burned through their savings and replaced full-time jobs with part-time work. As of 2011, some 48.5 million people were living in poverty, up from 37.3 million in 2007. But that growth only accounts for roughly half the change in SNAP enrollment.

The newest factor in the program’s growth, one that hasn’t been tested in past boom-and-bust cycles, stems from policy changes that began almost two decades ago. The 1996 welfare overhaul, coupled with a rule change crafted four years later by the Clinton administration, allowed states to make it easier for residents to qualify for benefits.

In 2001 and 2002, six states adopted rules that eased income and asset requirements for SNAP applicants, making it easier for someone to qualify for the program if they had a low-wage job or some savings. Previously, applicants could be disqualified if they had $ 5,000 in the bank, or earned slightly more than the poverty threshold.

The goal was to help Americans with government aid before their savings were wiped out. Policy makers wanted to allow newly poor families, such as those where the breadwinner was temporarily unemployed, to have enough money to put gas in the cars and pay phone bills—two necessities for finding and retaining jobs. To qualify for this easier screening process, Americans had to do little more than prove their income levels were low enough to meet certain thresholds.

The change didn’t attract much attention until the financial crisis hit. After that, states began aggressively implementing the laxer standards, which allowed cash-strapped states to funnel more federal aid to their residents. The 2009 stimulus law further expanded the program, allowing people to keep the benefits longer than normal and boosting the total level of benefits that a recipient can receive. The expanded benefits expire Oct. 31.

In 2009, with the encouragement of Obama administration officials, 17 states and U.S. territories eased their eligibility requirements, in some cases waiving any policy that restricted the assets a family could retain.

“We believe that increasing the number of states that implement eased eligibility will benefit families hurt by the economic crisis, promote savings among low income households, and simplify state policies,” Jessica Shahin, a top USDA official, wrote to other federal program overseers in 2009. “Please encourage your States to adopt the looser rules to improve SNAP operations in your States.”

Eleven more states eased rules in 2010. Today, 43 U.S. states and territories have such expanded eligibility policies. The White House estimates that reversing the eased standards would cause between two million and three million people to lose benefits.

“We decided to adopt easier standards in order to prevent people from having to spend all of their life savings,” said Richard Berry, a GOP-appointed director of the agency that screens applicants in Mississippi, where one out of every three children receive benefits. “We didn’t want people to have to become destitute in order to get help.”

The resulting change in the program’s structure has been profound. In 2006, 18.7% of SNAP households qualified through an easier screening process. In 2011, that number reached 65.8%. The change didn’t mean the majority of SNAP beneficiaries had large savings accounts. Rather, it meant that states were no longer checking, according to state guidelines and program officials.

The financial crisis hit North Carolina particularly hard, wiping out thousands of manufacturing and financial-sector jobs. The state’s unemployment rate spiked from 4.6% in March 2007 to 11.3% in February 2010. It remained at 9.5% in January. The number of households seeking SNAP benefits in North Carolina also soared, averaging 785,072 in the fiscal year that ended Sept. 30, up 87% from 2008.

The state broadened eligibility rules in 2010, waiving asset limits and allowing households to qualify if their gross income was as much as 200% of the federal poverty level, up from the 130% threshold that had been in place before. Under the change, a family of four with income of $ 3,842 a month would now qualify, compared with $ 2,498 previously.

With more entering the program, social service groups began recommending it as an option for struggling families that previously hadn’t applied.

That is what happened to Basem Eljauni, a 55-year-old cashier at a Sam’s Club in Greensboro, N.C., who lost his two businesses—a grocery store and a gas station—and his $ 250,000 in savings and investments. The father of six says he now makes around $ 1,000 a month if he is lucky and supplements his income with about $ 800 in government-paid food assistance and handouts from charities.

“It’s hard to see yourself stuck on food stamps,” said Mr. Eljauni. “Amazing—I never thought I was going to be stuck in the system.”

Congress will have to revisit SNAP later this year when a bill authorizing USDA expenditures expires. Republicans have promised to push for changes, seeking new limits on who can receive benefits and ending the ability of states to ease asset and income limits.

The Congressional Budget Office said reinstating eligibility limits would save around $ 4.5 billion over 10 years, a fraction of the program’s total cost over that time.

Budget experts believe the program will start contracting next year, but only slowly. It will depend, in part, on whether people like Ms. Myers, the Chicago receptionist, will shift off the program in the coming months, something she said hopes will happen. “I am always looking for a better job,” she said. “I do not want to be on food stamps forever.”

Link

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Why Are a Record 15% of Americans on Food Stamps? Up 70% since 2008

By , April 1, 2013 11:22 am

Why Are a Record 15% of Americans on Food Stamps? Up 70% since 2008
By: Tet on: 01.04.2013 [15:10 ] (60 reads)

The program’s participants are in line with America’s 14.7% poverty rate

A record 15.2% of Americans are on food stamps, as Politix reported recently. Reasons for the growth in food stamps are often portrayed as complex, but the bottom line is simple: 14.7% of Americans live below the poverty line, a number that closely tracks the number on food stamps.

A small proportion of recipients live above the poverty line, as The Wall Street Journal reports. Changes to the program have “enabled states to ease asset and income tests for would-be participants…allowing into the program people with relatively higher incomes as well as savings,” according to the WSJ.

But these loopholes have only expanded the program by a small fraction. “Only 3.5 percent of food stamp users had incomes higher than 130 percent of the poverty line,” writes Jordan Weissman at The Atlantic. He concludes, “our food stamp rolls are eye popping, but they’re not the problem. Poverty is.”

Link

Use of Food Stamps Swells Even as Economy Improves .

The financial crisis is over and the recession ended in 2009. But one of the federal government’s biggest social welfare programs, which expanded when the economy convulsed, isn’t shrinking back alongside the recovery.

Enrollment in the Supplemental Nutrition Assistance Program, as the modern-day food-stamp benefit is known, has soared 70% since 2008 to a record 47.8 million as of December 2012. Congressional budget analysts think participation will rise again this year and dip only slightly in coming years.

The biggest factor behind the upward march of food stamps is a sluggish job market and a rising poverty rate. At the same time, many states have pushed to get more people to apply for SNAP, a program where the federal government picks up the tab.

But there is another driver, which has its origins in President Bill Clinton’s 1996 welfare overhaul. In recent years, the law has enabled states to ease asset and income tests for would-be participants, with the encouragement of the Obama administration, allowing into the program people with relatively higher incomes as well as savings.

The new rules were designed to encourage people to take advantage of the program before they became destitute. By expanding the pool of potential applicants, they are redrawing the landscape of government assistance. It is one reason why SNAP appears to have evolved from a program that rose and fell with the unemployment rate to a more permanent feature of the landscape.

At 12:07 a.m. on a recent morning, Syrises Myers, 34 years old, moved $ 70.18 in groceries including milk and ketchup through a scanner at Dominick’s grocery store near Chicago. The mother of two, the sole breadwinner for her family, knew the store closed at midnight. But she had to wait a few extra minutes for the federal government to transfer her monthly food-assistance benefits onto the purple debit-style card issued by the state of Illinois.

“If I want to be sure my kids can eat, especially when food is low in the house, I have to go at midnight when the food stamps turn on,” said Ms. Myers, a receptionist who earns $ 11 an hour.

While getting assistance from the program, Ms. Myers has been able to save $ 5,600 and recently put a $ 300 down payment on a car. Under older rules, the savings probably would have disqualified her from the program. Under the new, looser tests, that isn’t the case.

The food-stamp rolls have swollen since 2008 and are projected to stay that way for years. In 2008, SNAP enrollment was 28.2 million. Unemployment peaked in October 2009 at 10% and was at 7.7% as of February, but SNAP kept growing.

The Congressional Budget Office predicts unemployment will drop to 5.6% by 2017 but that SNAP enrollment will drop slightly to 43.3 million people, down 4.5 million from the current level.

That makes it very different from the other big federal support program, unemployment insurance, which shrinks as the economy improves. Continued jobless claims dropped to 3.1 million in February after peaking at 6.6 million in May 2009.

Kevin Concannon, undersecretary for food, nutrition and consumer services at the Department of Agriculture, said SNAP is working as designed, expanding to extend benefits to more Americans as poverty levels increase. He said USDA officials expect the program to soon begin contracting as the economy improves.

“While the perception may be different, the actual raw numbers, almost 50 million people under the federal poverty level, is certainly one of the principal reasons why we see the enrollment increases in the SNAP program,” he said. A more aggressive effort to get people on the rolls and changes in the eligibility standards were also factors, he said.

The government spent a record $ 74.6 billion on SNAP benefits last year, roughly equivalent to the combined budgets of the Department of Homeland Security, the Justice Department and the Department of the Interior. Roughly 45% of recipients are children. In 2007, the government spent $ 30.4 billion on the program.

A version of the food-stamp program was used briefly in the 1930s and 1940s. It was made permanent in the 1960s to tackle poverty, part of an expansion of state and federal social welfare programs including Medicaid.

By 1975, 8% of all Americans received government-paid food assistance. The level hovered between 8% and 11% until 2009. The financial crisis, coupled with the ensuing spike in poverty levels and a number of policy changes, pushed the program to unprecedented levels. Now, 15% of Americans are on SNAP.

The average monthly benefit per person was $ 133 last year, which can be used to buy household staples such as cereal, meats, fruits and milk.

For an able-bodied American without children, SNAP benefits are usually only offered for a few months. The federal government has waived these rules for most states in recent years because of high unemployment and will likely rescind the waivers when unemployment falls, program experts say.

“Food stamps have actually saved my life, really,” said Diane Hendricks, 43, who worked for 12 years at a human-resources agency before losing her job in 2009. She and her husband divorced last year, and she filed for SNAP to help buy groceries for her two children, ages 10 and 5. She now lives with a friend and receives $ 380 a month in SNAP.

In late February, Ms. Hendricks began working 20 hours a week at a local food pantry, earning $ 10 an hour. She hopes to stop using SNAP in three months. “The benefits helped me get back on my feet,” she said. “It was one less thing to worry about so I was able to look for work.”

Food stamps have proven polarizing in Washington, with proponents saying low-income Americans need this kind of taxpayer-funded assistance, and critics warning that programs foster dependence on government support.

House Budget Committee Chairman Paul Ryan (R., Wis.), the former GOP vice-presidential candidate, has proposed turning SNAP into a block-grant program that would give states more control over the program, likely leading to cuts.

At a recent event hosted by The Wall Street Journal, Mr. Ryan said when it comes to anti-poverty programs, policy makers should be asking the questions: “Do we have an economic policy of social mobility, of upward mobility? Are we attacking poverty at the root causes, or are we simply merely treating the symptoms of poverty to make it, you know, easier to tolerate and therefore perpetuate?”

In 2011, as the U.S. unemployment rate began to recede from its 2009 peak of 10%, the number of Americans living below the poverty line remained elevated as people burned through their savings and replaced full-time jobs with part-time work. As of 2011, some 48.5 million people were living in poverty, up from 37.3 million in 2007. But that growth only accounts for roughly half the change in SNAP enrollment.

The newest factor in the program’s growth, one that hasn’t been tested in past boom-and-bust cycles, stems from policy changes that began almost two decades ago. The 1996 welfare overhaul, coupled with a rule change crafted four years later by the Clinton administration, allowed states to make it easier for residents to qualify for benefits.

In 2001 and 2002, six states adopted rules that eased income and asset requirements for SNAP applicants, making it easier for someone to qualify for the program if they had a low-wage job or some savings. Previously, applicants could be disqualified if they had $ 5,000 in the bank, or earned slightly more than the poverty threshold.

The goal was to help Americans with government aid before their savings were wiped out. Policy makers wanted to allow newly poor families, such as those where the breadwinner was temporarily unemployed, to have enough money to put gas in the cars and pay phone bills—two necessities for finding and retaining jobs. To qualify for this easier screening process, Americans had to do little more than prove their income levels were low enough to meet certain thresholds.

The change didn’t attract much attention until the financial crisis hit. After that, states began aggressively implementing the laxer standards, which allowed cash-strapped states to funnel more federal aid to their residents. The 2009 stimulus law further expanded the program, allowing people to keep the benefits longer than normal and boosting the total level of benefits that a recipient can receive. The expanded benefits expire Oct. 31.

In 2009, with the encouragement of Obama administration officials, 17 states and U.S. territories eased their eligibility requirements, in some cases waiving any policy that restricted the assets a family could retain.

“We believe that increasing the number of states that implement eased eligibility will benefit families hurt by the economic crisis, promote savings among low income households, and simplify state policies,” Jessica Shahin, a top USDA official, wrote to other federal program overseers in 2009. “Please encourage your States to adopt the looser rules to improve SNAP operations in your States.”

Eleven more states eased rules in 2010. Today, 43 U.S. states and territories have such expanded eligibility policies. The White House estimates that reversing the eased standards would cause between two million and three million people to lose benefits.

“We decided to adopt easier standards in order to prevent people from having to spend all of their life savings,” said Richard Berry, a GOP-appointed director of the agency that screens applicants in Mississippi, where one out of every three children receive benefits. “We didn’t want people to have to become destitute in order to get help.”

The resulting change in the program’s structure has been profound. In 2006, 18.7% of SNAP households qualified through an easier screening process. In 2011, that number reached 65.8%. The change didn’t mean the majority of SNAP beneficiaries had large savings accounts. Rather, it meant that states were no longer checking, according to state guidelines and program officials.

The financial crisis hit North Carolina particularly hard, wiping out thousands of manufacturing and financial-sector jobs. The state’s unemployment rate spiked from 4.6% in March 2007 to 11.3% in February 2010. It remained at 9.5% in January. The number of households seeking SNAP benefits in North Carolina also soared, averaging 785,072 in the fiscal year that ended Sept. 30, up 87% from 2008.

The state broadened eligibility rules in 2010, waiving asset limits and allowing households to qualify if their gross income was as much as 200% of the federal poverty level, up from the 130% threshold that had been in place before. Under the change, a family of four with income of $ 3,842 a month would now qualify, compared with $ 2,498 previously.

With more entering the program, social service groups began recommending it as an option for struggling families that previously hadn’t applied.

That is what happened to Basem Eljauni, a 55-year-old cashier at a Sam’s Club in Greensboro, N.C., who lost his two businesses—a grocery store and a gas station—and his $ 250,000 in savings and investments. The father of six says he now makes around $ 1,000 a month if he is lucky and supplements his income with about $ 800 in government-paid food assistance and handouts from charities.

“It’s hard to see yourself stuck on food stamps,” said Mr. Eljauni. “Amazing—I never thought I was going to be stuck in the system.”

Congress will have to revisit SNAP later this year when a bill authorizing USDA expenditures expires. Republicans have promised to push for changes, seeking new limits on who can receive benefits and ending the ability of states to ease asset and income limits.

The Congressional Budget Office said reinstating eligibility limits would save around $ 4.5 billion over 10 years, a fraction of the program’s total cost over that time.

Budget experts believe the program will start contracting next year, but only slowly. It will depend, in part, on whether people like Ms. Myers, the Chicago receptionist, will shift off the program in the coming months, something she said hopes will happen. “I am always looking for a better job,” she said. “I do not want to be on food stamps forever.”

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Dollar Loses to Euro, Jumps to Highest Since 2009 vs. Yen

By , March 7, 2013 9:00 pm

A heap of hundred dollars US billsThe US dollar fell sharply against the euro yesterday and stayed little changed today. The US currency was flat versus the Great Britain pound, while against the Japanese yen it reached the highest level since August 2009.

The euro was strong against most currencies after European Central Bank President Mario Draghi said in the statement after the policy meeting:

As regards 2013, recent data and indicators suggest that economic activity should start stabilising in the first part of the year. A gradual recovery should commence in the second part, with export growth benefiting from a strengthening of global demand and domestic demand being supported by our accommodative monetary policy stance.

The optimistic comments led to limited demand for the safety of the dollar. Positive macroeconomic reports from the United States weakened the greenback further.

Today the important report about US non-farm payrolls will be released. It can affect the Forex market in a big way, but it is hard to predict how exactly traders will react to it. A bad report should scare market participants, but a good one may lead to speculations about removal of stimulus by the Federal Reserve, spooking them all the same.

EUR/USD surged from 1.2966 to 1.3106 yesterday and traded at 1.3096 as of 4:00 GMT today. GBP/USD was little changed at 1.5005. USD/JPY climbed from 94.81 to 95.33.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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