We are turning into the welfare nation with over 42.9 million Americans on food stamps- a shamefully record high for this nation. In just one year we’ve had a 16.2% increase in those receiving money from our government to purchase everything from food, soda pop, gum, candy, and even have Schwans delivered straight to their home!
I think it’s a safe assumption that most presidents would face this fact with shame of failure. But, certainly not our current president! Most of you will listen to this clip with wrinkled foreheads and a “whaaaat” expression on your face. Spin isn’t new to politics but this one will make you dizzy! Concerning food stamps, Agriculture Secretary Tom Vilsack says:
You have to recognize that it’s also an economic stimulus. Every dollar of SNAP benefits generates a $1.84 in the economy in turns of economic activity. If people are able to buy a little bit more in the grocery store than someone has to stock it, shelve it, package it, ship it. All of those are jobs. It is the most direct stimulus you can get in tough times.”
Food stamps are the most direct stimulus you can get in tough times? What about a paycheck? Hot Air raises some great points:
So here’s the question. If food stamps create jobs, like Vilsack says here, and we’re putting record numbers of Americans on food stamps, then why aren’t we seeing record job creation? If every dollar spent on food stamps creates $1.84 in production, as Vilsack argues, and the number of food stamp recipients keeps rising, then why haven’t the GDP numbers reflected that fabulous growth?
There are two answers, the first of which is two words: opportunity costs. The supposed multiplier effect does not take into consideration the cost of taking capital from the private sector, where it can be put to use for actual growth and job creation, for use by the government. In this case, the opportunity costs have a heavy burden of interest, since we’re not taking money from current capital but from future capital, thanks to runaway deficits. Not only does this make less efficient use of capital, it underscores the signals to investors that the US government will practice sharply confiscatory tax policies in the future, which stunts investment and produces … well, the stagnation we’re seeing right now.
The other answer? The multiplier effect is completely bogus. For one thing, much of the money gets absorbed by the government bureaucracies that manage these programs. Second, as I alluded earlier, the evidence we see all around us shows us that we can’t get economic growth through government welfare programs. If what Vilsack said was true, we’d be better off seizing all income and handing out food stamps.
Unfortunately, we are in the silly season. Wild political claims in order to deflect from the truth and bolster a standing is nothing new. But, this is definitely one for the books! The only thing food stamps stimulate is more big government!