Oh, SNAP

Over the past five years the number of people getting food via the SNAP/Supplemental Nutrition  Assistance Program (food stamps) has increased at an alarming and unsustainable rate.

food-stamps-new-chart-original

The reality is actually significantly worse than the chart reveals. In 2013 the number of recipients soared to 47,636,000 at a cost of nearly $80 billion. From the program’s beginning in 1969 until the last few years the number of recipients has stayed within a reasonably narrow range (there were actually fewer recipients in 2000 than there had been in 1980 and 1990, for example).  From 2008 to present, however, the number of recipients has increased by an astonishing 81%, far exceeding historic participation.

Of course we’ve been experiencing a serious recession, so perhaps it’s natural that tens of millions of people would be unable to afford food without assistance.  In times like these we’re all suffering.

Well, not all of us.

Over the last five years the S&P 500 has increased by 159%, to record levels.

s&p

Again the chart doesn’t tell it all.  It closed at 1867 yesterday.

And corporate profits are also at an all-time high, growing five times faster than worker’s wages in 2013.  For 2013 results tack another 11% onto the chart below.

corporate-profits

Even as the number of food stamp recipients spirals upward, stock prices and corporate profits are increasing even faster.  Even as more and more people are unable to afford food, times have never been better in corporate America.

These are not the signs of a healthy economy.

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11 comments on “Oh, SNAP

  1. nebraskadave says:

    Bill, wow, where do I start with this post. I agree with the bottom line comment about not being signs of a health economy. As it becomes easier and easier to qualify for SNAP the statistics for those receiving the help has increased tremendously as you say in the last few years. It all seems to have started jumping up much more than previous years when the current administration took over. If I would ask just about anyone the question of whether they’re living better than five years ago, practically no one would say yes.

    I know that the wage increases notoriously lag behind the profits of big business. It’s just the way economics work. I am very leery to believe the after tax profit curve on the recession is over chart. It just smacks too much like the tech bubble from years ago that started this downward spiral. And, well, isn’t it amazing that the leaps of corporate profits started in …. 2009 as well when the current administration took over.

    All I know is surviving is tough for the boots on the ground bottom of the food chain worker. Prices on everything are increasing and household incomes and buying power are decreasing. That, to me, is not a healthy economy. In my humble opinion, we have yet to see the worst part of this economy. I am normally a very positive person but the facts are just not lining up with a bright future. At this point in time I have a “let’s wait and see what happens” philosophy. I hope and pray that I am totally wrong.

    Have a great economically healthy day.

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    • Bill says:

      Those with large stock portofolios are making more money than ever. Those who are able to benefit from skyrocketing corporate profits (attributable in large part to artificially low interest rates and other “stimuli”) are doing great. You’re right about everybody else.

      I was unaware that SNAP eligibility rules had changed. Aren’t those determined by the states? Over the past few years I’ve gotten to know quite a few people who depend upon food stamps for their food and they’re all very poor. They don’t own any stock.

      I would hesitate to give the administration credit for the rise in the stock market, just as I would hesitate to give it blame for the rise in food stamp dependency. Politicians always want to take credit for the good news and pass blame for the bad. The reality is usually a lot more complex.

      A lot of those soaring corporate profits are being used to buy back stock, further concentrating the gains. I tend to attribute most of this to monetary policy, which is supposedly independent of the politicians and which they all agree upon in any event. It’s very dangerous in my opinion and is creating bubbles that are unsustainable. A healthy economy wouldn’t fatten the wallets of the wealthy while driving everyone else toward dependency. But this notion of “trickle down” serves those at the top well.

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  2. Top ten CEO salaries, 2013

    Elon Musk. 78.2 million
    Larry Ellison. 77 million
    Mario Gabelli. 69 million
    Robert Kotick. 64.9 million

    And so on.

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  3. El Guapo says:

    It feels more and more every day like we’re heading to a 1929 type correction.
    Hope it somehow gets sorted before that.

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    • Bill says:

      A booming stock market and escalating corporate profits with so many people unemployed and underemployed makes no sense to me. I don’t know how it will end but clearly this path is unsustainable.

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  4. shoreacres says:

    Perhaps the first thing that should be done is to rein in the fraud and corruption rampant in the food stamp program. The government needs to stop recruiting people to be part of the program, and we certainly don’t need to be providing information about how to enroll to citizens of Mexico, IN Mexico.

    I personally have received two phone calls soliciting my enrollment in the SNAP program. It was about a year ago. They were blanketing our area with recruitment efforts, and it was quite a topic of conversation. They would have figured out I wasn’t eligible if I’d talked to them instead of hanging up, but honestly….

    I’ve talked before about the brisk trade in EBT cards here. It’s easy as pie. Tell the local bureaucrat you lost your card, get a duplicate, and sell it on the street for 50 per cent of face value. Then, do what you will with the cash. People work the system with their SNAP cards, too.

    I suppose I sound like a compassionless jerk, but honest to goodness – until the loopholes and fraud are closed and reduced, the programs are going to continue to spiral out of control.

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    • Bill says:

      People do sell their food stamps and the going rate around here is 50 cents on the dollar. The people I’ve known to do it are usually addicts. In one case a man I met (who was not an addict) sold his because he had to get his scooter out of hock in order to get to work. He didn’t know what he was going to do for food after that. One way addicts do it is to use the card (which can only be used for food) to buy high value items like steaks that can be traded for drugs. It’s a very sad situation. But there are close to 48 million people on food stamps and I’d be surprised if the percentage of them engaged in fraud is very high. But let’s say 10% are (a number that I’d guess is way too high). That still leaves well over 40 million recipients who are not engaged in fraud, which is still way higher than historic participation. I just can’t believe that an increase of twenty million people on food stamps in the last six years is due to fraud and loopholes. Some of it may be due to reduced eligibility requirements, as Dave says. I know that for folks who rely on food stamps for all their food it is very difficult to do. They’re only supposed to be supplemental assistance, but for plenty of people they’re the source of the only food they get.

      I don’t understand why Texas would recruit people for food stamps. The idea that they’d do it inside Mexico makes no sense at all to me, especially since illegal immigrants aren’t eligible and those with a green card aren’t eligible until they’ve been in the States five years (as I understand it).

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      • shoreacres says:

        I’ll see if I can get my hands on one of the Spanish-English brochures that explains to Mexican citizens how to plug into the system once they get here.

        Also, I think we’re more sensitive to fraud-and-abuse here because it’s tied in with immigration, drug cartels, illegal immigration, and so on and so forth. We probably have a higher percentage of people engaged in it than you do.

        Still – it seems like something that could be addressed right now – and seeing something done about it would not only help ensure resources get to the people who need them, it also would help to change the attitude of people who see the programs in a negative light.

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  5. shoreacres says:

    OK- doke. This is from February, 2012. I probably received the calls trying to enlist me for SNAP because I’m “elderly”.

    “The Obama whitehouse believes not enough people are receiving food stamps who should be & is offering $75,000 grants to groups who devise “effective strategies” to “increase program participation” among those who have yet to sign up.

    The U.S. Department of Agriculture’s website singles out Hispanics and elderly Americans as groups who often fail to enroll in the food stamp program (officially known as the Supplemental Nutrition Assistance Program, or SNAP) and says that one of the contributing factors that must be overcome to get more people to sign up for SNAP benefits is individual “pride”:

    There are many reasons why eligible people, including seniors and Hispanics, do not participate in the SNAP. These include unawareness of eligibility, confusion about program rules and requirements, a complex application process, and a lack of transportation and pride.

    To reduce these “barriers” to food stamp enrollment, the Department of Agriculture offers non-profit groups the chance to receive $75,000 grants for projects designed to boost food stamp participation among those who are eligible but have yet to sign up.
    The Department of Agriculture believes that the SNAP program is “severely underutilized” and says that 33 percent more Americans who are eligible to receive food stamps have yet to apply, thus the need to offer federal grants to sign more citizens up.President Obama’s Secretary of Agriculture Tom Vilsack has also argued that food stamps are an effective form of economic stimulus that puts “people to work” because each time food stamps are used at a grocery store “someone’s got to stock it, shelve it, package it, process it, ship it–all of those are jobs.”

    And here’s a bit (Jan 2014) on the issue of promotion in foreign countries.

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    • Bill says:

      Wow. If at these levels the program is “severely underutilized” then the situation is even much worse than it appears. As bad as 48 million is, this suggests there are over 60 million people eligible for food stamps. Meanwhile we have a booming stock market and corporate profits at an all-time high. That’s a very unhealthy disconnect in my humble opinion.

      I still don’t understand the rationale for advertising food stamps in Mexico or any other foreign country. It’s not as if people can just hop across the border and get them, nor would it make any sense to encourage that even if they could. Of course most government spending makes no sense to me and if this is true then it’s just another example of how foolish it can get.

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