Food Stamps: a win-win solution that needs reform

I’ve shown my liberal side in the last couple of posts.  Now it’s time to balance that out.  The topic is assistance for the poor, including food stamps and housing benefits today and welfare tomorrow.

I’ll begin by saying that we obviously need these programs to help people.  There are many reasons people find themselves economically unable to fend for themselves, including mental and physical illness, broken families, and the simple fact of historical poverty being difficult to rise out of.  But the way in which we provide help to people could be improved, providing more benefit to recipients at less cost to society.

Let’s start with food stamps, because I fundamentally like the approach taken by that program.  Food stamps (now called the Supplemental Nutritional Assistance Program and provided through debit cards, not stamps) began as a brilliant win-win program that was designed to benefit farmers and the hungry.  It gave food coupons, or stamps, to needy people which they could exchange for food.  By limiting the program to food products, the risks of cheating and corruption of other benefits programs were largely avoided.  Basic foodstuffs have little use except to feed people who are hungry, so there is little profit to be made by stealing them or cheating the system into giving them to you.

Because there is less danger of cheating and because basic unprepared food items are relatively inexpensive, food stamps is a relatively cheap program to run.  This means it can be extended to a larger group of people than other benefits programs.  The qualification for the food stamp program is actually above the poverty line, higher than most need-based aid programs.  Of course, this may also be because there is another natural constituency of the program which is always happy for the program to expand: farmers.

Of course, the food stamp program isn’t without fault.  The biggest flaw I can see is what is covered.  Food stamps can be used to purchase any non-prepared non-alcoholic consumable, including sodas and junk food.  Various attempts have been made to curtail this practice, both from a dietary and a cost perspective, but lobbying by poverty rights groups and the food industry have prevailed.  The latest attempt was by the Bloomberg administration in New York City, who have been attempting to fight the consumption of junk food and soda by any means available.  The pilot program they attempted to create was nixed by the Food Stamp program regulator,

It’s understandable why the soda and junk food industries would fight the restriction of food stamps from the purchase of their products.  But why would advocates for the poor argue that the poor, who suffer disproportionately from most diseases including heart disease, obesity, and diabetes, should be given junk food and soda?  Apparently, the argument is that it’s labeling them as irresponsible children to protect them from these items.  Advocates say the poor should have the same freedom as anyone else to eat as they want, and the way to improve their diet is by education.

I disagree with this completely.  At the most elemental level, the public willingly (or grudgingly) pays for benefits for the poor because they believe they are just that: benefits.  If we know for a fact that they’re not, we shouldn’t provide them.  Additionally, the line as to what food to provide has to be drawn somewhere.  We don’t provide prepared foods or alcohol because it isn’t efficient use of public money, because it doesn’t have sufficient nutritive value or because it could endanger the recipient.  The same criteria could be cited to deny candy, junk food and sugary sodas to recipients.  All three of these can endanger the recipient by leading to obesity and diabetes.  And none of the three is an efficient means of delivering nutrition.

So with some pretty important exceptions, the food stamp program is a simple, well-designed, and efficient program for helping the poor.  What about housing benefits?  Housing is mostly provided either by in kind provision of public housing or by rent supplement payments to landlords (called the “Section 8” Program).  Either way, the provision of benefit is direct and there is little chance that the recipient not receive the benefit.  The problem is that often there are others that also receive the benefit.  For example, single mothers often receive housing, but then share it with the man in their life.  Sometimes this man is simply poor himself, but other times he is a criminal who sells drugs or runs some there kind of criminal business out of the accommodation.  This is the reason that housing projects are such dangerous places.

However, while it’s true that the housing benefit can be partially diverted to the wrong people and thus also become a danger to the recipient as well as a benefit, it still does fundamentally provide an actual benefit at a reasonable price to the public.

Tomorrow I’ll move on to the welfare program and cash benefits, where we’ll see the really big idea.

See Food Stamps article in wikipedia.

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