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Cutting Food Stamps is Bad for People -- and the Economy

Newt Gingrich recently railed against increased food security for the poorest and unluckiest in our society. On Nov 30, he insulted Obama by calling him the “best food stamp president in history.”

This is not just Gingrich’s dead horse, in fact, there are plenty of other Republicans who hate a free lunch. The GOP budget proposal from the House earlier this year cut SNAP (food stamps); in October Senator Sessions claimed that “no program in our government has surged out of control more dramatically than food stamps;” in November Senator Vitter and three other Senators proposed caps at pre-2007 levels; and recent reports have suggested that the Department of Agriculture is still under pressure from Congress to make cuts as well.

While Republicans may suggest that massive long-term unemployment can be solved by making these cuts to food security, most economists would argue that reducing U.S. federal expenditures by 0.1 percent ($4 billion) will not. 

More than 46 million individuals and 22 million households used SNAP (Supplemental Nutrition Assistance Program) in September, 2011. Many of those served by SNAP are children whose future socioeconomic outcomes depend heavily on proper nutrition. The hunger of one hurts us all—there are few things better suited to hindering our economy than hungry workers, parents, and students.

Not only is it unwise to starve your citizenry, but food stamps are one of the best forms of stimulus around, economists say, since these funds are spent immediately. Actually, according to a study by Mark Zandi and Alan Blinder, increasing spending on food stamps was the most effective form of stimulus employed by the federal government after the financial crash. Their analysis found that increased spending on food stamps created $1.74 in economic activity for each dollar spent -- more bang for the buck than spending on infrastructure, unemployment, or aid to state governments.

Spending on food stamps stacks up especially well compared to tax cuts for the wealthy and corporations. According to the Zandi/Blinder study, cutting taxes for capital gains and dividends creates just $.37 of economic activity for each dollar lost to the U.S. Treasury. Corporate tax cuts are even less effective: $.32 for each dollar lost.

In other words, spending on food stamps is nearly six times more effective as a form of stimulus than the top stimulus priority of conservatives. Again, you don't need an economists to tell you this; it's pretty obvious that money given to hungry people for food would be instantly recirculated back into the economy, while money given to rich people might just end up stashed away in a savings or investment account.

Overall, then, it comes down to this: cutting food stamps is not only cruel policy, it is bad policy.