Thursday, August 18, 2011

Food Stamps as Stimulus

Ag Secretary Vilsack said,

"when you talk about the SNAP program or the foot stamp program, you have to recognize that it's also an economic stimulus. Every dollar of SNAP benefits generates $1.84 in the economy in terms of economic activity. If people are able to buy a little more in the grocery store, someone has to stock it, package it, shelve it, process it, ship it. All of those are jobs. It's the most direct stimulus you can get in the economy during these tough times."

On February 10, 2009, NPR ran a story about how the economic stimulus would help fund food stamp programs because States were experiencing such a high caseload due to the downturn in the economy:

Congress is on the verge of increasing funding for food stamps as part of the economic stimulus bill, because of the steep rise in the number of Americans applying for the aid.

For example, in the past 20 months Florida's food stamp caseload has grown by more than a half million people, to 1.8 million. George Sheldon, who heads the state's Department of Children and Families, says many applicants are in former boom areas, such as Fort Myers, where construction has ground to a halt.

I don't buy the Ag Secretary's logic. In order to give someone a dollar, you have to take a dollar from somewhere else. That means that instead of $1.84, you are actually only growing it by 84 cents.

Don't get me wrong - I am not against food stamps. While there are some people who would classify those as receiving food stamps as moochers, the vast majority have reached hard times. People on food stamps are going to buy food regardless because that is their only means to buy food.

If food stamps were an effective stimulus, then the GDP would grow greater than the 0.8% than the first half of 2011.

The real stimulus needed is to modify the laws so employers cannot discriminate based on employment status. Recent reports have revealed many employers are discriminating against job seekers who have been out of work for long periods of time. Tax cuts should also be extended to the poor and middle class, while letting the tax cuts on the rich expire. The trickle-down theory isn't working - while the poor get poorer, the rich get richer.

The government could also invest in job skill academies where people are trained in a new skill and then are partnered with local and national companies who need their skills. We do not need more unskilled labor jobs in America, we need more skilled labor jobs.

Not to mention our Veterans are out of work. Michigan has the worst rate of unemployment for veterans at 29.4%. Luckily, Florida is only at 7.7%. Most of the nation is between 8 and 15.9% for veteran unemployment.

But to say that food stamps are a stimulus is not true. Food stamps are a means to redistribute wealth in terms of vouchers to the needy to buy food. Not stimulus.

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