Food stamps tend to suck for a lot of the same reasons food pantries do. You're still telling people what to buy. It's not as bad because there are more choices, but it's still the same general problem where you have a bureaucracy telling you what to buy instead of being able to buy what you need the most like anybody else.
Sometimes what you really need is food. Sometimes -- or some specific days -- you have access to food and what you really need is to save up enough for a working car or gas to put in it so you can go to job interviews. Or something else that the person in question knows they need but arbitrary politicians have no way to predict.
But if you give people food stamps, they'll buy food with it. Even if they already have suitable food, because it's free money that can only be used for one thing. Then it costs the taxpayer $1 and provides the person with $.05 worth of value, which they take because $.05 is more than $0.
Meanwhile just giving the person $1 cash would give the person $1 in value and cost the government less, because then it isn't necessary to administer a system to force people to buy the thing they needed less instead of the thing they needed more.
And eliminating that bureaucracy reduces the Shirky principle problem.
A lot of people don’t realize that “food stamps” are just a debit card that you use to checkout at the supermarket, yes, even Whole Foods. There are some limits to what you can buy, but generally speaking if it’s unprepared food you can pay for it with the food stamp debit card.
I was on food stamps for a short while. While the value of the balance wasn’t literally cash, it was equivalent because I was spending at least that much on groceries anyway. You can also carry a balance forward from month-to-month so there’s never a need to spend it down wastefully. It’s only about $100/person/month so it’s never too much for just food.
Food stamps have low administrative overhead and low levels of fraud. It’s a government program I have very few gripes about, which is indeed saying something.
And it’s not a small program either, around $100B per year (less in the last couple years due to very strong employment numbers).
This is kind of the point. In all the cases where the person is spending that amount on eligible food regardless, it's already equivalent to cash so it might as well be cash without the administrative overhead. They'll spend the food stamps on food and the cash they would have spent on food on whatever they want.
The only time it matters is when the person wouldn't be spending that much, i.e. they have an alternative source of food that doesn't take food stamps. In which case it only produces inefficiency. If you're content to eat free stale bagels and ugly produce every day so you can use the money for something else, you can't without breaking the law. Nor does it help you to try to stretch the money past the limit of the benefit amount.
So people go to the grocery store and spend all the money, because a fresh bagel tastes better than a stale one if you have to spend the money on that. And if you have a consistent way to get by on $80/month in groceries, accumulating an extra $20/month in food stamp balance every month still doesn't put gas in your car.
The same dynamic plays out in all the other assistance programs. There is money for low income housing assistance, but the natural thing to do there is to get together with multiple other hard off people, pool your resources and share housing. Which is not allowed. The programs generally prohibit methods of improving efficiency or stretching money.
Even if you're dead set on not letting people spend the money on vices, why is there a whitelist instead of a blacklist? You can't spend assistance money on alcohol or cigarettes, fine. But if there is food assistance and housing assistance then why can't you spend excess food money on housing or excess housing money on food? Why is there a ban on business cards and brake pads?
100,000,000,000 / 12 = would feed one person for 8.3B years.
Or a billion people for 8.3 years.
You can see where this is going.
$100B should be able to feed one hundred million people for 83.3 years. Assuming $100 / month could feed a person.
You can buy a lot of lentils, rice, and potatoes with $100.
But you're saying food stamps costs $100B a year.
Where is all this money going?
The latest numbers in Wikipedia say that SNAP costs $70.9B and distributes an average of $125/month to 44.2M people.
That means the cost is $133 to distribute $125, or an overhead of $8 per person per month.
Still not great but not nearly as bad as I was expecting, to be honest.
The average health insurance deductible is $4,358 and the average premium is $321 per month.[3] That means that on average US citizens pay $321 per month for (5237-4358) / 12 = $73.25 of expected value. That's a 4X markup over the expected value of insurance.
Health insurance companies might be reporting single digit overheads but they are providing $1 of value for $4 and are inefficient.
[1] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1361028/
[2] https://www.mrmoneymustache.com/2017/11/05/when-your-shitty-...
[3] https://www.cnbc.com/amp/2017/06/23/heres-how-much-the-avera...
Your calculation makes no sense. Healthcare insurance pays out for catastrophic events, hence the deductible, not evenly every year. You need to know the distribution of payouts to get a meaningful result.
I guess it's still a whole number factor sort of thing.
I also wonder if those numbers are accounting for Medicare and Medicaid (which add costs to the private insurance system).
>> To estimate lifetime health care costs, we employ a method based on a current life table, also known as a period life table model.
Thus, these costs are representative of recent costs.
In the next 80 years, both the expected value of insurance and the cost of insurance will change. Health insurance premiums are expected to increase by double-digits in 2019.
https://www.fool.com/investing/2018/05/26/whos-ready-for-a-1...
$100 billion / 12 months
= $8.3 billion per month
/ $100 per person per month
= 83 million people
so $100 billion per year could give 83 million people $100 per month.
I'm not trying to imply that all homeless people are addicts (quite the contrary) but if I'm a crack addict and you give me money I'm not sure I'd be using it to save it up for buying a car one day.
I wouldn't assume that, since food stamps aren't particularly focussed on the homeless.
In fact, the original purpose of the food stamp program was clearing agricultural surpluses (hence why the program was created in the Department of Agriculture and not the Department of Health, Education, and Welfare where you would have expected it to be if it were a welfare program and not an ag industry support program); you originally had to purchase food stamps, and for every dollar you got $1 of unrestricted (but still only for food) stamps, and $0.50 of restrictes-to-items-deemed-to-be-in-surplus stamps.
The exact restrictions and mechanisms changed over time in subsequent iterations of the program (and it's hard to find a clear purpose for many changes because lots were compromises between competing visions with fundamentally opposed goals.)
Unprocessed trauma coping circuits (aka addiction) highjacks intelligence to get the dopamine trigger, it doesn’t nessesarily eliminate intelligence.
You don’t solve trauma with cash, but you also don’t make it worse and the benefits to others seem to be greater.
A regulated nervous system is a need, and if someone never developed that capability and doesn’t have awareness or resources to develop it as an adult, it’s actually a pretty logical move to use drugs.
This!! I am always a little disappointed to see so many people on HN talking about gov't programs as though they are some form of altruism. They (usually) are not.
SNAP/WIC/EBT (what people are referring to as food stamps, which I don't think exist anymore; the 'benefits' are managed and distributed via a card provided by JPMorgan last I read) is a corporate welfare program.
Every time there's political talk about cutting the 'food stamp' program, the lobbyists come out. Whose lobbyists? Kraft, Walmart, JPMorgan, et al. If you use your 'Googles' you should be able to find a few articles about what % of revenue the program(s) account for some of these programs. One year Kraft said it was something like 14% (I have this on paper somewhere in my archive, but the info's available on the interwebs). Because of this, these programs aren't going anywhere.
This is also why, when you look at the food stuffs provided to students via school breakfast and lunch programs, they're often crap. Food nutrition is not the goal, getting Vitamin $ to companies (and maybe a few small farmers) is.
Meats and grains are heavily subsidized by the USG, produce not so much. IIRC this goes back to the doing of Nixon's guy, Earl Butz.
I’ve seen a number of studies, reports, NGOs, etc. advocating for giving cash directly vs. inkind donations.
https://www.npr.org/sections/goatsandsoda/2017/08/07/5416096...
https://www.theatlantic.com/international/archive/2015/09/we...
https://www.vox.com/2016/1/23/10810978/cash-transfer-givedir...
Drug addicts make up a negligible percentage of people getting a helping hand. The statistics show this and it has been born out by the states that introduced drug testing for assistance recipients: they cost more to administer than the money saved by kicking people out of the assistance programs because the numbers are so tiny. Even in SF where it seems like all the crazy homeless people are strung out or tweaked, well, that's a sample problem: indeed many of the crazy ones are, but they are a minuscule, though highly visible, percentage of the people in need.
If you're struggling to make ends meet you don't have time to take drugs.
Whereas if you start out OK, become drug addled and fall out of the system, you probably by that time are too out of it to ask for help.
For example, food stamps may go to a family, where they are dealt with responsibly, in a way that money, which is very easy to grab and walk out to buy cigarettes with when things go badly, is not.
Obviously, it's not a full solution, and a cynical recipient could sell them, true... but we're not talking about individuals acting in isolation for purely selfish reasons; that's a contrived subset of the problem.
What's the alternative you're proposing?
Just hand out cash?
The research shows that people suffer severe difficulty in managing fiscal matters when under financial stress. It's the old 'why do people who are poor buy so many lottery tickets?'?
Money isn't the correct solution; and maybe food stamps aren't either... but they're a better solution, and don't think that's even in doubt.
...but if you have a different one, I'm happy to hear it.
Answer, all people buy lottery tickets at the same rate for tickets which might materially change their life. If you are rich, spending 20 bucks for a 1 in a million chance to win 10k is not going seem worthwhile.
The problem food stamps are solving is to keep a lid on the brow beating from taxpayers toward the poor. It is a mild form of punishment masquerading as help. It would be cheaper, easier, and more effective to just give cash (and because it would be cheaper, you could give more).
The main issue poor people have in managing money, is simply that they do not have enough.
Or if they inherit 50k, immediately go to Vegas and lose it all.
These are all real examples I've known personally.
The people you're describing exist but it's hard to imagine someone who is great with money staying poor for years and years, considering almost everyone in America moves between income quintiles during their life and most spend time at the top.
If free food is punishment please sign me up to be punished.
Also, I'm interested in the source for your lottery ticket info. It sounds fairly absurd in a world where many jackpots are over 5 million, which is enough to change almost anyone's life. I've never even heard of a lottery for 10k.
That is because you don't buy them I guess. Scratch tickets, poker machines, plus lots of small state lotteries that start at 5-10k and top out at maybe half a mill.
I don't know very much about this topic and I'd love to see the research you're talking about. Are poor people worse at managing finances? Intuitively that sounds wrong to me, but intuition is usually useless in economics. Do food stamps result in better health outcomes than cash?
That's what we do in most (all? I can only find a handful of dated references to a program in the UK) parts of Europe. Seems to work fine.
It isn't really a comparable situation. Acting like it is doesn't do anything constructive for American problems.
Looking more at other countries is imho benelovant for the states.
People in this discussion are saying "If you give cash to an addict, they will spend it on drugs." Well, most poor Americans have serious health issues. It is one of the things that makes them poor.
If you need medical care and you have to pay for it and it's very expensive, giving such a person money won't go to food. It will go to medical bills.
If you want to give Americans cash instead if food stamps, first you need to give them free medical care. We really need universal basic health care in the US.
Of course that's just another reason to implement universal healthcare, not to shame poor people with food stamps.
If someone who's dependent on EBT money is spending it on caviar and filet mignon, they're going to go hungry for most of the month. Restrictions just add administrative overhead without benefit. (They also make the program more paternalistic and potentially stigmatizing, but that's a different argument.)
I lost several dress sizes by eating things like organic beef. I have a medical condition that causes malabsorption. It is routinely treated with expensive prescription digestive enzymes, plus large amounts of prescription drugs.
I'm a former military wife. Technically, I should be able to get the $100k/year or more worth of medical treatment I am supposed to need for free, at taxpayer expense.
Eating right is vastly cheaper, saves all kinds of tax dollars and also gives me a hugely higher quality of life. Win/win/win.
Does anybody thank me for doing the right thing here? No. Instead, I am frequently attacked for any number of reasons, some of which seem to be rooted in this idea that poor people aren't entitled to eat well, and their health be damned.
You have no idea what that person's needs are. Being able to see that they weigh a lot and what they purchased on a particular day doesn't really give you enough information to know if they were spending wastefully on frivolous purchases or not on that day.
And even though the public sector incurs real costs due to an approval process (you're not just paying the salaries of the overview bureaucrats, but also the salaries of the project workers who need to sit around and wait for funding to come in), it persists because it is viewed as more legitimate and more protective of legitimacy.
If you ask the public whether they would prefer for a public program to cost $100 million, including $20 million which ended up being embezzled into private pockets, or $150 million spent entirely legitimately, most members of the public would rather spend the $150 million for a legitimate program, even if you could show them how the additional taxes needed directly affected their personal bottom lines.
The reason why we don't give poor people cash directly is simple: even if 99%+ of beneficiaries will use the money responsibly, a tiny minority will not. That tiny minority will get written up in the press, and the perceived unfairness will politically doom the program. How public money is spent is, unfortunately, important.
Well, no. A lot of them will sell the food stamps at a discount to people who do want food, but would like to pay a little less for it. The poor person gets money and so does the grocery shopper.
They're not physical stamps anymore and haven't been for at least a decade. It's a debit card that gets money deposited monthly. You can't sell the money without selling the card and your future access to the money going to the card.
In other words, the fraud you're all worried about has already been addressed.
Is that the appropriate word for that person?
https://www.wordnik.com/words/idiot
The hypothetical person is certainly not offended, and previous usage as a medical diagnosis is considered archaic.
Yes?
If you aren't homeless, no one expects you to sit and eat a giant bag of apples all by yourself within one to three days. People in housing who are gifted a large amount of produce or whose gardens overflow will post questions to forums concerning creative uses. They will can, pickle, etc the excess -- the amount they can't reasonably eat fresh. People expect you to eat an apple or two in a day, not twenty or thirty of them. Unless you are homeless, I guess. Then suddenly you should be grateful for 30 apples instead of revolted at the idea of trying to finish them by yourself before they rot in the heat.
Canning, pickling etc is beyond the means of a homeless person. So I have no idea why any middle class person would think giving a huge bag of a single type of fruit to a homeless individual in hot weather would make any sense whatsoever. I cannot fathom it.
If you give a big enough bag of even a hardy fruit to someone with no means to preserve it, it will rot. Even apples.
Grocery Outlet and WinCo often have hydroponic LiveLettuce for cheap that keeps for a long time. Apples and some citrus last. I wish I had fresh tomatoes, they’re so good. Fresh tomato, basil, onion and garlic salad is to die for: see FrenchGuyCooking on IG. If I had a solar-powered hydroponic greenhouse trailer, I’d grow all of my own vegetables. One modern adaptation is some farmer’s markets take EBT and offer extra incentives... which all well-and-good if you have refrigeration.
The bigger problem in the produce industry is the parallels with swipe dating apps: optimizing for looks, but not taste or nutrition... hence why store-bought vegetables taste like cardboard. As an example, a former coworker had a job at one of those fruit stands. Blemished fruits and vegetables were fine to eat but wouldn’t sell, so they went into pies and soups. It seems to me shrewd farmers and shoppers would find a way to rate/compete produce, shorten the supply chain and deliver naturally-ripened food.
Finally, a Russian hustler friend of mine fregans all sorts of stuff: steaks, salads, takeaway meals, whatever. I should do that more TBH because expiration dates are very conservative.
https://sandiegohomelesssurvivalguide.blogspot.com/2014/08/l...
Best.
I grew up with a garden in the back yard. My dad hunted and some of the meat on our table was squirrel and deer he killed. My mother cooked from scratch.
I'm used to eating well for relatively little money. Most of the food at soup kitchens and food pantries fails to meet my expectations for food quality.
Food stamps (EBT) are a good program. You can use them to buy the same food from the same stores as anybody else and you get to decide what to spend it on. (Though the program could use more funding. They tend to last only 3 weeks of the month.)
Soup kitchens and food pantries tend to suck, even the better ones.
I'm not saying we shouldn't provide compassionate support to anyone. I'm just saying some programs for doing so would be acceptable to people with middle class expectations and some wouldn't be. For many reasons, including germ control, we need to be shooting for programs that fit middle class sensibilities and not act like "beggars can't be choosers."
Furthermore, if you are homeless, you are living without a fridge. Produce doesn't keep well under those conditions. When I was around a lot of other homeless people for a time, it wasn't unusual for free produce to go to waste, in part for that reason. Some idiot would give a homeless person some giant bag of apples. They could eat a few of them before they rotted, but not all of them. Maybe they managed to give the rest away. Maybe they didn't.
Last, I have serious reservations about creating systems to serve the poor instead of creating systems to help them resolve their problems. Systems designed to serve the poor tend to actively keep poverty alive, a la the Shirky Principle:
"Institutions will try to preserve the problem to which they are the solution"
https://en.m.wikipedia.org/wiki/Clay_Shirky#Shirky_principle