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The Circle Bastiat

Why the food stamp program is a fraud

The federal government vastly overstates the benefits the food stamp program provides low income families – which isn't worth the cost to the taxpayer.

By Gary GallesGuest blogger / February 16, 2012

Temeka Williams, right, of Detroit, uses her bridge card tokens for a purchase from Elizabeth and Gary Lauber from Sweet Delights at the Farmer's Market in Detroit in this file photo. Galles argues that proponents of the federal food stamp program exaggerate its benefits.

Carlos Osorio/AP/File

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The Los Angeles Times has given me a case of déjà vu. It recently (February 6) ran an opinion piece titled "Food stamp fight," by history professors Lisa Levenstein and Jennifer Mittelstadt, that had a distinctly familiar ring to it.

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Their justification included several arguments for why "food stamps are essential" to America. They claimed that food stamps are necessary to relieve hunger, which benefits the country because hungry people are not productive. They claimed that "In 2009, they pumped $50 billion into the economy;" and cited a USDA publication’s claims that "Every $5 in new food stamp benefits generates a total of $9.20 in community spending," and that each "$1 billion of retail food demand by food stamp recipients generates 3,300 farm jobs."

While those claims may be new to Times readers, they are actually golden oldie misrepresentations that seem to never die. For example,   at a food stamp hearing held in 1975, Senator Hubert Humphrey asserted that:

The food stamp program plays a very critical role in enabling millions of low-income families have a better diet. It plays a very important role in the support of American Agriculture. It also plays a very important role in keeping the economy from sliding into a deeper recession.

Humphrey supported his claims by citing a Department of Agriculture study of the impact of food stamps in Texas 40 years ago, which he described as follows:

The study found that $63.9 million in bonus food stamps provided in Texas that year generated $232 in new business in Texas and appeared to generate at least $89 million in business elsewhere in the United States. In addition, the $63.9 million provided in bonus food stamps created 5031 jobs. Translated nationwide, this could mean that the food stamp program is now responsible for $27 billion in business in the United States each year and 425,000 jobs…Furthermore, consider how much money we would have to spend to support those 425,000 workers and their dependents if they did not have the jobs that the food stamp program has apparently generated."

Unfortunately, however long the pedigree of repetition such defenses of the food stamp program (now called SNAP, for Supplemental Nutrition Assistance Program) have, they simply reiterate the same basic misunderstandings when it comes to food consumption, nutrition, agriculture, and its effects on income and job creation.

The food stamp defense uses the magnitude of food stamp benefits to dramatically overstate the increase in food consumption. The reason is that food stamps are equivalent to cash for almost all recipients, because virtually everyone would purchase more food than their food stamp allotments, even if they were given cash. So, for the vast majority, food stamps simply replace money that would have been spent on food anyway, freeing that money to spend however they choose.

Other than higher administrative costs, the result is the same as giving them money.

Even for the few families for which food stamps might raise food expenditures compared to cash, their nutrition effects are misrepresented. Studies find little difference between the nutritional adequacy of the diets of low- and high-income families, so that the problem is vastly overstated. Added food spending also often fails to improve nutrition, as less nutritious but more convenient pre-prepared food is substituted for healthier home-prepared food. Further, obesity is a more common problem among low-income families today than lack of food. Therefore, trying to force recipients to consume more food than they would otherwise by giving food aid instead of cash would, to the extent it was successful, do little to improve nutrition, but would worsen obesity problems. That doesn’t seem very "essential" to Americans’ well-being.

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