Food Stamps An Economic Stimulus?

Actually food consumption increases as prosperity increases (to a degree) just as the inverse is true. Whether eating out or cooking at home, the consumption of food remains. As far as actual consumption goes, more people are likely to waste food when eating out than at home. But the purchase of food isn't directly connected to the consumption, it is only a large percentage. We lose a lot of food from harvest throughout our chain of distribution, right up to the consumer (actually consuming) and have much waste for multiple reasons each step of the way.

We have developed a large innefficient infrastructure to distribute food that continues to raise the cost far from the production of the actual ingredients. As long as this continues, our effectiveness to be able to reduce world hunger will continue to be further and further from our reach. It will, however, continue to create more and more jobs in transportation and processing. Foodstamps and other governmental aid will continue to escalate upon our society as these costs continue to increase and our job situations see a new light.

The new job structure, from a management perspective is changing. as benefits and health care costs continue to rise, employers continue to look for ways to cut costs the new solution is coming out of the Nevada test bed. We are seeing a trend of less full time employees and more part time employees (to reduce benefit expenses) with the part time employees working more hours per week to maintain the same level of 'income'. Even though the employee is wroking more hours, it is over multiple part time jobs and has less benefits. The employer can maintain the same benefit package in advertising and still offer it only to full timers as the number of full time emloyees decrease. Full time employees will dwindle to only salaried employees who are typically management, and maybe only upper management. This evolution of the workforce is being monitored by businesses very closely. Walmart, Target, and a few other chains have already implemented portions of this idea over the past years. Part- timers also tend to be paid less per hour (not including the benefits) and that saves the company even more money. Thus the employee must work more hours at another job. This in turn increases the dependency of food stamps. Food stamps are paid for by the taxes of the taxpayers. Taxpayers are not created equal, as we know from the news and national demonstrations.

The $1.85 from $1 is pretty close to accurate when you do the math this way. And the math applies to the businesses, not the employees.

I think I can be of help here.

The process behind welfare benefits as economic stimulus is actually pretty straight forward. The observation that food stamps stimulate the economy gained notice following a report by Moody's Economy showing that food stamps and unemployment insurance have the greatest return on investment (ROI), economically speaking. This goes for debt reduction as well as job creation. A chart that accompanied the Moody's report can be seen here:

http://www.epi.org/page/-/img/20081022sn...

In it, you see that for every dollar spent on food stamps, $1.74 is generated; whereas extending the Bush era tax cuts actually create a drain on the economy -- generating only a third of what is "spent". I.e.: For every dollar cut in taxes, the return is only about 30 cents. Remember when we were told that "These tax cuts will pay for themselves" and "These tax cuts will create a million jobs"? Good times. Good times.

So how does all this work? To put it simply, a poor person lives paycheck to paycheck and every dime they get goes directly back into the economy. A person of substantial means will retain some of their money. A millionaire who gets a few extra thousand on their tax return isn't going to go out and spend it right away. They'll hold onto it, invest it, whatever. But they won't immediately pump that back into the economy. And that's what the economy is: the exchange of currency. The problem with our economy now is not enough people exchanging currency. So if you want to get money changing hands again, the poor are the most efficient way to do that.

How does it create jobs?

When a person goes to the store and buys something, they are creating demand. It's demand that drives the economy and creates jobs. We are constantly told that the rich are job creators who bestow jobs upon us from the goodness of their hearts and that they'd bestow more jobs upon us of only we could allow them to continue hoarding more wealth; but the truth is that it is demand that creates jobs. The rich "job creators" could all die tomorrow, and our economy would still only reflect the demand that necessitates supply.

When you go to the grocery store, you don't just create demand for the products you buy but you create a demand for the person who manufactured the products, the person who shipped the products, the person who stocked the products, the person who rang up the products, and the person who bagged your products. This is the job creation. This is how a dollar spent on food stamps generates more than a dollar in economic stimulus.

I hope that helps.