September 17, 2011

Food Stamps: A Microcosm of Out-of-Control Government

Filed under: Economy,Taxes & Government — Tom @ 8:05 am

FoodStampMontageToo generous, duplicative, and fraud-riddled — yet ever-expanding.

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Note: This column went up at Pajamas Media and was teased here at BizzyBlog on Thursday.

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As shown previously, the economy has been extraordinarily and historically unimpressive since the recession as traditionally defined ended in June 2009. Nevertheless, during the intervening 26 months, according to the more comprehensive Household Survey at the government’s Bureau of Labor Statistics, seasonally adjusted employment, since bottoming out in December 2009, has grown by 1.67 million, or about 1.2% of the workforce.

This degree of job growth should have caused the number of those enrolled in the Supplemental Nutrition Assistance Program (SNAP), still popularly known as Food Stamps, to level off or at least grow only slightly, right? Dream on. Food Stamp enrollment during the eighteen months ending in June of this year increased by 6.2 million, or 16%. In the past 3-1/2 years, Food Stamp enrollment has grown by 72%, from 26.3 million to June’s 45.2 million. In 2007, about one in eleven Americans was receiving Food Stamps; now it’s about one in seven.

The Food Stamp program is a case study in good intentions gone wild, and a direct rebuke to those who believe we can’t reduce spending on government welfare and entitlement programs, and reduce or eliminate many other federal programs and departments, without harming the vulnerable.

The original 1964 legislation creating the program was a result of a classic “win-win” logrolling arrangement between urban politicians who wanted to feed poverty-stricken families and rural reps who sought increases in farm subsidies. Predictably, both groups got what they wanted, while taxpayers lost. Uncle Sam’s Agriculture Department originally predicted that the program “would eventually reach 4 million, at a cost of $360 million annually.” By the end of 1974, the number of participants (15 million) and the cost ($2.7 billion, or $1.6 billion in 1964 dollars) had both essentially quadrupled those original estimates. The tab in calendar 2011 will easily top $70 billion.

Individual and family benefits have recently skyrocketed for no defensible reason. During the last few years of the Bush administration, leftists ramped up an orchestrated PR campaign called the Food Stamp Challenge. It was designed to prove how absolutely impossible it was to survive on the program’s average benefit of $21 per person per week. Among those who agreed to participate in what they claimed was the grocery-store version of Mission: Impossible were several congresspersons, Oregon’s governor, and many journalists.

But the $21 benchmark was a fraudulent figure. It was the average net benefit after legally mandated deductions from gross benefits for family income and assets, the reasonable idea being that the government would make up the difference between 30% of a household’s income and what recipients could afford to pay for food from their own resources. Depending on household size, individuals and families deemed as having no available resources were getting $27-$36 per person per week in benefits — amounts that roughly coincided with what the U.S. Department of Agriculture at the time considered to be the cost of its “thrifty” but adequately nutritional meal plan. Rather than argue the merits of the income- or asset-based deductions, Food Stamp Challenge promoters refused to even recognize their existence, falsely insisting that the net benefit was all recipients had to spend on food. Meanwhile, during August 2007, Colorado activist Ari Armstrong and his wife demonstrated that they could live within even the artificially low Food Stamp Challenge amount without undue hardship, and spent a whopping 44% less than the gross benefit amount.

Even though benefits were already adequate, and even though the cost of food at home increased by a bit less than 5% during the two years involved, Nancy Pelosi and Harry Reid’s Congress, with George W. Bush acquiescing, increased gross benefits in fiscal 2009 by 9%. Once Barack Obama became president, gross benefits went up two times in just over eight months by a total of 13%. These increases, combined with rules changes in many states easing income, asset and other eligibility tests, caused the average net benefit over those two years to explode by 40%. Gross benefit levels have stayed the same since October 2009, but they’re still way above the reasonable levels of three years ago. The bottom line is that we no longer expect recipients to be thrifty with their taxpayer gifts.

What ordinary people would see as obvious abuse is clearly on the rise. In Southwestern Ohio in early 2009, a couple with $80,000 in the bank and a paid-off $300,000 home qualified; it was not an isolated incident. Colleges have actively encouraged their students, no matter how well-off their parents might be, to get with the program. In a sign of how widespread student abuse of food stamps might be, Michigan has removed 30,000 of them from the rolls so far this year.

Duplication of benefits between other federal programs is rampant. Children in Food Stamp-eligible families are often if not usually getting free lunches and/or breakfasts at school. It’s not mean or nasty to observe that such families are getting 21 meals’ worth of benefits each week their kids are in school, but only have to figure out how to feed their kids 11 or 16 times. Many college students on food stamps are receiving financial aid based on their school’s officially published cost of attendance, which includes tuition, fees, room — and board.

Thrift being no longer necessary, the next stage is apparently removing the expectation that recipients prepare their own meals. The program’s new frontier is permitting the purchase of restaurant meals. This “feature” is currently limited to four states and is in theory only available to the elderly, disabled, and homeless. If you believe that every fast-food cashier is verifying whether every person paying with their SNAP card really qualifies, I’ve got a Microsoft Sweepstakes-winning email to forward to you. It should be no surprise that lobbying efforts to expand restaurant merchant eligibility are well under way. I sense that another “win-win” at taxpayers’ expense, which will also serve to cement currently too-high benefit levels, is on the horizon.

Finally, the Food Stamp program, like so many other federal efforts, is riddled with fraud. Ohio alone replaces 200,000 supposedly “lost” food stamp cards per year out of a current pool of 1.6 million recipients, or perhaps 500,000 households. Many if not most of the cards are being sold for cash or drugs.

To contend that this and other federal programs and departments can’t be cut — real cuts, not just reductions in projected, artificially jacked-up spending — is absurd. Unless we’re gunning to be the next Greece but without anyone who will bail us out, we can’t afford not to.

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14 Comments

  1. It speaks to the gross incompetence of liberal Democrats who demand a tax increase to cover up their failure to manage a government program. Their failure of oversight disqualifies them for leadership positions. In the business world, a manager who fails to monitor and control the process is deemed incompetent and fired.

    Conservatives miss the prime opportunity to restrain the growth of government by failing to point out that the primary reason for the need of a tax increase is due to INCOMPETENCE. Most importantly, as a campaign issue moderates and independents easily grasp the point of incompetence. Framing the libs demand of a tax increase as a COVER UP for their incompetence is a potent counterpoint to their claim Conservatives are mean and stingy.

    Comment by dscott — September 17, 2011 @ 10:57 am

  2. #1, thx for that tie-in. It’s so obvious, but so easily forgotten.

    Comment by TBlumer — September 17, 2011 @ 12:42 pm

  3. Paul Krugman vs. Ron Paul and Friedrich Hayek

    http://www.foreignpolicyjournal.com/2011/09/17/paul-krugman-vs-ron-paul-and-friedrich-hayek/

    Paul Krugman tried to slam Ron Paul in his most recent column by writing:

    Back in 1980, just as America was making its political turn to the right, Milton Friedman lent his voice to the change with the famous TV series “Free to Choose.” In episode after episode, the genial economist identified laissez-faire economics with personal choice and empowerment, an upbeat vision that would be echoed and amplified by Ronald Reagan.

    But that was then. Today, “free to choose” has become “free to die.”

    I’m referring, as you might guess, to what happened during Monday’s G.O.P. presidential debate. CNN’s Wolf Blitzer asked Representative Ron Paul what we should do if a 30-year-old man who chose not to purchase health insurance suddenly found himself in need of six months of intensive care. Mr. Paul replied, “That’s what freedom is all about — taking your own risks.” Mr. Blitzer pressed him again, asking whether “society should just let him die.”

    And the crowd erupted with cheers and shouts of “Yeah!”

    Ah, but what was Ron Paul’s response? Here is the full transcript:

    Wolf Blitzer: You’re a physician, Ron Paul, so you’re a doctor, you know something about this subject. Let me ask you this hypothetical question: A healthy, 30-year old young man has a good job, makes a good living, but decides, “You know what? I’m not going to spend 200 or 300 dollars a month for health insurance, because I’m healthy, I don’t need it.” But something terrible happens. All of a sudden, he needs it. Who’s going to pay for it if he goes into a coma? Who pays for that?

    Ron Paul: In a society that you accept welfare-ism and socialism, he expects the government to take care of him…

    WB: What do you want?

    RP: …but what he should do is whatever he wants to do and assume responsibility for himself. My advice to him would be to have a major medical policy, but not be forced…

    Here, Ron Paul was clearly going to say the person should not be forced to buy insurance by the government (crucial context), but CNN’s Wolf Blitzer rudely interrupted him:

    WB: But he doesn’t have that. He doesn’t have it, and he needs intensive care for six months. Who pays?

    RP: That’s what freedom is all about, taking your own risks. [Applause] This whole idea that you have to prepare and take care of everybody… [Applause]

    WB: But, Congressman, are you saying the society should just let him die?

    RP: No! [A few audience members shout “Yeah”. Laughter.] I practiced medicine before we had Medicaid in the early 1960s, when I got out of medical school. I practiced at Santa Rosa Hospital at San Antonio, and the churches took care of them. We never turned anybody away from the hospitals! And we’ve given up on this whole concept that we might take care of ourselves, assume responsibility for ourselves. Our neighbors, our friends, our churches would do it. This whole idea—that’s the reason the cost is so high! The cost is so high because we dump it on the government, it becomes a bureaucracy, it becomes special interests, it kowtows to the insurance companies and the drug companies, and then on top of that, you have the inflation. The inflation devalues the dollar. We have lack of competition. There’s no competition in medicine! Everybody’s protected by licensing. We should actually legalize alternative health care, allow people to practice what they want! [Applause]

    So Ron Paul actually responded with a firm “No!”, but Krugman relies upon a couple of shouts from the audience in an apparent attempt to impugn Paul by making him seem heartless. …

    Comment by Greg — September 17, 2011 @ 4:43 pm

  4. #2, actually you can thank Obama for that one since he admitted to the fraud, waste and abuse in Medicare. Quite frankly, most politicians readily admit to F,W&A in any government program, so instead of acquiescing to the existence of it we should be beating them with the issue as though using a baseball bat and then shaming them for failing in their role of oversight. That Tom is the central failure of Obama since the core of Progressivism is the government is supposed to run everyone’s lives better than they could individually in terms of efficacy. So even according to liberal standards Obama is a total failure as he by his managerial incompetence demonstrates the Progressive ideology fails the premise of efficacy.

    Comment by dscott — September 17, 2011 @ 5:13 pm

  5. Tom, If you have time, listen to this interview. – Greg

    http://www.acton.org/media/audio/interview-subsidiarity-government

    Interview: Subsidiarity and Government
    Guest: Samuel Gregg
    23:38 Miniutes Long

    Acton’s Director of Research, Dr. Samuel Gregg, joined host Mike Janocik on The Mike Janocik Show on WLCR in Louisville, Kentucky to discuss the concept of subsidiarity, and how it relates to the current discussions over public sector unions and the size and scope of government in general.

    Comment by Greg — September 18, 2011 @ 8:49 am

  6. Ron Paul “Soundly” wins California Republican straw poll

    http://latimesblogs.latimes.com/washington/2011/09/ron-paul-rick-wins-perry-mitt-romney-california-straw-poll-bachmann-.html

    This weekend, the California Republican Party had its 2011 Fall Convention at the JW Marriott Hotel in downtown Los Angeles.

    One presidential candidate, Minnesota Rep. Michele Bachmann, spoke at a dinner on Friday night, and Saturday morning’s breakfast featured two more contenders: Michigan Rep. Thaddeus McCotter and Texas Rep. Ron Paul.

    Paul’s fans were out in force both outside the hotel — awaiting his arrival — and inside the ticketed Lincoln Clubs Breakfast. He spoke last and was late, allowing McCotter to add a question-and-answer period to his prepared remarks (more on that later, check back). …

    Below find the results:

    Congressman Ron Paul (374, 44.9%)
    Governor Rick Perry (244, 29.3%)?
    Mitt Romney (74, 8.8%)
    Congresswoman Michele Bachmann (64, 7.7%)
    Jon Huntsman (17, 2.0%)
    Herman Cain (15, 1.8%)
    Newt Gingrich (14, 1.7%)
    Thad McCotter (7, 0.8%)
    Rick Santorum (7, 0.8%)
    Gary Johnson (2, 0.2%)
    Fred Karger (1, 0.1%)
    Write-ins (15, 1.8%)

    Comment by Greg — September 18, 2011 @ 9:13 am

  7. Obama’s unpopularity cost me the job’: David Weprin blames struggling president after New York election defeat

    http://www.dailymail.co.uk/news/article-2038477/New-York-election-results-2011-David-Weprin-blames-Obama-defeat.html

    Comment by Greg — September 18, 2011 @ 10:42 am

  8. Tom, Wasn’t GE one of the Tarp banks?

    Please read:
    “GE responds to charges of crony capitalism”

    http://campaign2012.washingtonexaminer.com/blogs/beltway-confidential/ge-responds-charges-crony-capitalism

    Comment by Greg — September 18, 2011 @ 10:45 am

  9. John Boehner’s 2008 Mud Sandwich Speech:
    Vote for TARP!!
    http://www.garynorth.com/public/8492.cfm

    Now the next link is important: This is the speech that earned him the Speaker of the House position. He proved his loyalty to the foreign banks that have hijacked our country. Many in the House were against TARP. It was on the ropes. Americans were screaming no! John Boehner has this oscar worthy performance and was key to getting it passed. He is now trying to block Ron Paul from being able to hold the banks accountable.

    Watch: CSPAN Sep 29 08 Boehner on TARP Bill

    http://www.youtube.com/watch?v=hZ-70rQD19M

    Comment by Greg — September 18, 2011 @ 10:49 am

  10. The TARP that Congress supported, which I strongly opposed, is not the TARP Hank “Put a Gun to Their Heads” Paulson put into place.

    Additionally, foreign banks got their money from the Fed, not from TARP. Fed transparency is one place where Paul has been right for a long time.

    The evidence that “He is now trying to block Ron Paul from being able to hold the banks accountable” is exactly what??

    Boehner was the Republican (minority) leader from 2007-2010. To contend that his TARP vote is what “earned him” the Speaker’s position is, to be unduly kind, uninformed.

    Comment by TBlumer — September 18, 2011 @ 11:58 am

  11. Truth hurts, Huh Tom?
    No incumbent should remain.

    Comment by Greg — September 18, 2011 @ 3:42 pm

  12. #11, specifically what about Comment #10 did you not understand?

    Comment by TBlumer — September 18, 2011 @ 4:31 pm

  13. #12, you do realize that if the Democrat Party collapses under the weight of it’s cronism and failed liberal ideology that we will have to contend with rabid Libertarians taking the place of the leftist loonies?

    Comment by dscott — September 19, 2011 @ 12:19 am

  14. [...] will go up here at BizzyBlog on Saturday (link won’t work until then) after the blackout [...]

    Pingback by BizzyBlog — September 19, 2011 @ 9:02 am

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