"I mean, Bugaboo strollers, organic baby food, Burberry Kids—it was getting ridiculous. The cost of caring for kids was simply inflated and unsustainable," said analyst Michael Stevens.

He also placed some blame on the children's bargaining units. "My grandfather walked to school with no shoes on. These days, not only do children expect to have shoes, they want iPods, they want cell phones, they want health care," he said. "The children got drunk. They got drunk, and now they have a hangover."

Though the emotional toll can sometimes be great, families that downsize a child save up to $20,000 annually. Funds that were previously diverted for college savings are also free to help cover more immediate costs. "The return to the family is almost immediate," said former mother Mary Chalmes. "It's also much quieter in here."

Most children were offered severance packages of juice boxes and Lunchables, though analysts say that children's bargaining units were inexperienced in procuring health care or monetary compensation. Recently pink-slipped child Tommy Beckerman told reporters he can count to 5 and then collapsed into a tearful tantrum. "I want my mommy," he said and refused to take questions.

While the outlook for the large group of children is already bleak—many are lacking in job skills and have only a grade-school education—some see this as a opportunity.

Local entrepreneur Craig McFarlen has already applied for the permits for his venture start-up Sweet Shop Garment Factory, which he said will be staffed entirely by children.

"I'm thinking outside the box. These are good jobs. These are American jobs," he said. "If Obama is taking his economic cues from John Maynard Keynes, I'd say my inspiration is based on the work of the theories in the 1834 Poor Law. Or Charles Dickens. Other countries, like India and Bangladesh, are using this business model with tremendous  success."

The creation of meaningful employment has been applauded by some, especially those troubled by the recent appearance of an encampment being called "Fort City" along the Guadalupe River. Many children, in the wake of the abrupt change in living arrangements, have pushed two chairs together and draped a blanket over the top to create a sleeping enclosure. Cryptic "tags" reading "No Grils Alowd" suggest the children may already have become involved in gang activity.

Some parents have been harshly criticized for using the monies freed from the layoffs on big-ticket items for themselves. Some families were actually caught trading in their minivans for stylish convertibles. But others say this is just a sign that the parenting bubble has finally burst, something analysts like Tom Ferell saw coming years ago.

"Look, these people were made false promises, by their doctors, by society, by their own parents," Ferell said. "They thought parenthood would be fun and rewarding. No one told them what it was going to cost. No one even asked if they were qualified to become parents. They were deliberately misled."

Former dad Trip Hunt agreed. He said he was pressured into having the "nuclear family" and found himself spending thousands more each month than he'd planned for. "When my wife and I started planning to get pregnant, no one asked me if I was ready to give up my masculinity, no one asked if I could handle the responsibility," he said. "Now, we're living at our means, and I can stop banging the baby sitter to make myself feel better."

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