Food stamps have grown to become the second most expensive federal welfare program, behind only Medicaid. In recent years, enrollment in the Supplemental Nutrition Assistance Program (SNAP), the U.S. government food stamp program, has increased dramatically, rising from 26 million in 2007 to almost 47 million in 2012. That is one in seven U.S. residents receiving benefits in an average month.
As Henry Olsen at the National Review puts it, “food stamps cost too much, have grown too quickly, encourage government dependency, and discourage work”.
A rise in the participation rate and costs of such welfare programs is expected to rise during economic downturns, which a number of studies cite as proof of the programs effectiveness. Temporary changes in policy in the American Recovery and Reinvestment Act of 2009 increased aid during the downturn, in efforts to help stimulate the economy. What this argument fails to address is the significant portion of growth attributed to increasing fraud and abuse of the system. Food stamps and other in-kind transfer payments encourage idleness. The Government Accountability Office reports that despite great progress, “the amount of SNAP benefits paid in error is substantial, totaling about $2.2 billion in 2009.”
There are other more efficient programs to help provide assistance that are more effective and encourage employment.
As economist Milton Friedman stated, “nobody spends somebody else’s money as carefully as he spends his own. Nobody uses somebody else’s resources as carefully as he uses his own.” The conventional economic thought is that cash transfers are more effective at helping the poor than in-kind gifts, such as food stamps and housing vouchers. We enjoy spending our earnings in whichever way we see fit; surely welfare recipients would also like that freedom. It gives us the choice to spend on what best fits our needs. In Free to Choose by Milton and Rose Friedman, the economists argue for “replacing the ragbag of specific programs with a single comprehensive program of income supplements in cash.”
By primarily giving cash transfers, it gives people the ability to choose what they want instead of giving them what a particular group thinks they ought to want. It creates a more efficient welfare system that provides more freedom and better incentives for welfare recipients.
Sources: Congressional Budget Office, National Review, The Government Accountability Office, Free to Choose, by Milton Friedman and Rose Friedman.