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Thursday, May 1, 2008

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More needy heading to food banks

Woman at food bank

Consumers are facing a double whammy. Sticker-shock at the gas pumps and again at the grocery store. Today a Congressional hearing focuses on how rising food costs affect Americans and what can be done. Jeff Tyler has more.

Woman choosing food at the Daily Bread Food Bank in MIami, Fla. (Joe Raedle/Getty Images)

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TEXT OF STORY

Scott Jagow: Today, in Washington, Congress looks at how food prices are affecting people in this country. Jeff Tyler reports.


Jeff Tyler: With the slowing economy and rising unemployment, low income Americans are being squeezed.

George Brailey: Many people who've never been to a food pantry or a food bank are finding themselves in need today.

That's George Brailey with America's Second Harvest, a network of food banks. He'll be speaking at today's hearing. He says the need for assistance is growing.

Brailey: The number of people receiving food stamps today is 1.3 million higher than it was just a year ago.

But with the rapid rise in prices, food stamps don't go as far. As a result, more families are turning up at soup kitchens. And Brailey says charities are having a harder time providing help. For one thing, the federal government is donating less food than in the past. And, of course, inflation cuts into a food bank's buying power. So, with the same budget, they can't feed as many people.

I'm Jeff Tyler for Marketplace.

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I am not buying the whole "there might not even be a recession, and if there is one, it will be brief." If oil prices continue to rise, driving inflation, the Federal Reserve will eventually be forced to raise interest rates in the middle of a slowdown. We are already seeing signs of a Japan style "liquidity trap" which is preventing the free flow of money from the banks to Main Street. I think the government's efforts to bail out the housing market will be about as effective as the response to Hurricane Katrina...

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