The food stamp program, part of the Department of
Agriculture, is pleased to be distributing the greatest amount of
food stamps ever.
Meanwhile, the Park Service, also part of the Department
of Agriculture, asks us to “Please Do Not Feed the Animals” because
the animals may grow dependent and not learn to take care of
themselves.
— Recent viral e-mail (author
unknown)
The irony is amusing but the implications for our nation’s
finances and essence are not.
A USDA web page
on the Food Stamp Program (FSP), officially called the
Supplemental Nutrition Assistance Program (SNAP), offers some
outdated data:
• The FSP serves approximately 1 in 11 Americans every
month.
• 67 percent of those eligible for the Food Stamp Program (FSP)
participated in 2006, up from 65 percent in 2005 and 54 percent in
2001. This demonstrates continued growth in the proportion of
eligible people participating for the fourth consecutive year.
• Over 10 million children and low-income people have been added
to the program since 2001 and we continue to promote FSP
participation aggressively among eligible people.
• America invested $34.9 billion in the FSP in FY 2008.
• Currently, just over 27.7 million low-income people
benefit from the FSP every month.
Note the use of the word “invested” when it comes to this
welfare program. Even Robin Hood didn’t consider himself an
investor.
Democrats and others who benefit directly or electorally
from government transfers of other people’s money suggest, and may
actually believe, that welfare has a positive impact on the
economy, and this is exactly what the USDA claims:
• Every $5 in new food stamp bnefits generates almost
twice as much ($9.20) in total community spending.
• If the national participation rate rose just 5 percent,
1.9 million more low-income people would be able to spend an
additional $1.3 billion on healthy food. This would generate
$2.5 billion in new economic activity
nationwide.
This explains why the Obama budget looks like it does.
They literally believe in a free lunch.
Still, while the USDA appears proud of how many handouts
it makes, it is either feeling stung by Newt Gingrich’s calling
Barack Obama a “food stamp president” or it’s extremely lazy: The
data reported on its web page is from 2008, not showing the
explosion in growth of users and cost of the food stamp program
during the Obama administration.
The number of people who got food stamps in November, 2011
was 46.3 million, an increase of more than 60 percent under the
reign of Obama and more than 160 percent since 2000 (the year with
the lowest number of food stamp recipients since 1989). According
to
Bloomberg News, “The number of
Americans receiving assistance under the program set records every
month from December 2008 until June 2011 and has changed little
since September.”
The proportion of Americans taking food stamps is closer
to 1 in 7 than 1 in 11. Think about that for a moment.
In Fiscal Year 2011, the cost of SNAP was about $78
billion, more than doubling the FY 2008 cost, with $26 billion of
the increase due to temporary provisions of the 2009 “stimulus”
bill. But lest you take comfort in the word “temporary,”
government
spending on food stamps rose by 6.9
percent in the year from November 2010 to November 2011 despite a
1.1 percent drop in the unemployment rate during that time. And
Bloomberg reports that food stamp program costs in 2013 will remain
17 percent higher than in 2011.
Over the last three years, the increase in SNAP
participants has substantially outpaced both the increases in the
number of unemployed and the number of people living below the
poverty line as the Obama administration spends taxpayer money
encouraging Americans to take, and perhaps become addicted to, the
government cheese.
Clearly this administration does not accept Ronald
Reagan’s wisdom that “We should measure welfare’s success by how
many people leave welfare, not by how many are added.”
The New York Times recently
noted, with an unmistakable hint of
approval, that “Americans are relying on government benefits more
than ever before” and that “even critics of the safety net
increasingly depend on it.” Team Obama is smiling with every
additional handout-taking voter.
In its
analysis of SNAP, the liberal Center
on Budget and Policy Priorities promotes the Keynesian “positive
multiplier” view of welfare: “Moody’s Analytics estimates that in a
weak economy, every $1 increase in SNAP benefits generates $1.72 in
economic activity. Similarly, the Congressional Budget Office rated
an increase in SNAP benefits as one of the two most cost-effective
of all spending and tax options it examined for boosting growth and
jobs in a weak economy.”
The chief economist at Moody’s, Mark Zandi, has been a
leading cheerleader of “stimulus,” quantitative easing, and other
Keynesian policy suggestions despite repeated failures throughout
history, including over the past few years, of government
pump-priming. (Zandi, a Democrat, was a top economic advisor to
John McCain, which suggests how little improvement we might have
had under a McCain presidency versus an Obama
presidency.)
Nancy Pelosi has claimed, perhaps based on a USDA
study,
that $1 redistributed through food stamps generates $1.79 in
economic activity. (The $9.20 gained for $5 spent, as the USDA
website claims, represents a 1.84 multiplier. This number has been
replaced in the USDA’s thinking by the 1.79 multiplier from the
more recent study, but remains on the USDA website.)
Of course, if any of these numbers were true, government
should redistribute much more income into food stamps and make us
all fat and happy (though Michelle Obama would clearly object, at
least to the former)
As Harvard economist Robert Barro
notes, the Keynesian multipliers
being offered to us by supporters of the welfare state are based on
economic models, not on actual outcomes: “Theorizing aside,
Keynesian policy conclusions, such as the wisdom of additional
stimulus geared to money transfers, should come down to empirical
evidence. And there is zero evidence that deficit-financed
transfers raise GDP and employment—not to mention evidence for a
multiplier of two.”
The Congressional Budget Office
estimates that the SNAP participation rate
and costs to the government will decline over the next decade as
employment improves, but even at a projected 5.3 percent
unemployment rate in 2022, food stamp program costs are only
expected to decline less than 10 percent, to $72.6 billion, more
than double the 2008 level. This is due to assuming a 20 percent
increase in monthly benefits offsetting most of 27.4 percent drop
in monthly food stamp recipients. Even that modest $8 billion drop
in SNAP spending will be more than offset by a $10 billion (54
percent) increase in child nutrition
programs, primarily the National
School Lunch Program, as James Madison no doubt intended. Now it’s
not just a free lunch, it’s a free lunch “for the
children.”
In other words, even when the economy gets better, even
when employment improves and poverty declines, the welfare state
ratchet will keep the costs to the taxpayer from
dropping.
As the Cato Institute’s Michael Tanner
argues, “We are becoming a society
that makes poverty more comfortable instead of doing what we need
to reduce poverty. Food stamps is about taking people who are poor
and enabling them to live better poor instead of focusing on things
like job creation which actually gets people out of
poverty.”
For those who
accuse opponents of the growing use
of food stamps of racism — as NBC’s David Gregory did to Newt
Gingrich — the number of white householders receiving food stamps
exceeds the number of black and Hispanic household recipients
combined (based on 2010
data).
Food stamp spending represents a modest percentage of
entitlement spending. But it represents the ever-increasing welfare
state, the ever-growing sense among our citizens of
entitlement, and the ever-shrinking understanding within
the American soul of our Founding traits of self-reliance and
voluntary private and family charity when self-reliance is
insufficient.
Unlike the sign at the zoo cautioning us not to feed the
animals, Americans are being taught that distributing food to each
other through the tax code is economically wise and socially just.
But, notwithstanding the attempts of the Obama administration to
make us dependent on federal subsidies for everything from health
care to energy to mortgages, we are not caged animals reliant on
the generosity of the zookeeper for our very survival. Allowing
government to treat us as if we are is a giant step down the road
toward national insolvency. More importantly, it is an insult to
our Founding Principles and an assault on our very
humanity.
