Friday, August 19, 2011

The Beneficiaries of Food Stamps

Are not just the people who need them to survive; but the grocery stores who need them to increase their profits.

If you think food stamp recipients have the power or the wherewithal to lobby Congress to protect their undeserved "handouts," think again.

The power that keeps the food stamp program alive and well are the grocery stores who are just as dependent upon them as the poor people who qualify for the program.

I've always believed that social safety net programs are even more beneficial to the "have plenties" of our society in the sense that it keeps the lid on social discontent with the added benefit of relieving the private sector of the expense of time and money in having to manage the poor and their problems. Much easier to pay taxes, wash their hands of the responsibility, all the while creating a convenient scapegoat in government to blame for when social relations don't always end up harmonious.


Eric said...

You call it a social benefit. I call it a good example of how insidious government welfare programs self-propogate by creating dependancy on both sides of the social equation. It's the exact same reason we are having such a hard time getting rid of subsidies to the oil companies... because they enjoy the money and we don't want to deal with the spike in gas prices that would result from shutting it off.

Eric said...

Also, it is important to note (and this is the big flaw in every such Keynesian scheme) that while it is true the grocery store owners benefit from such schemes, they can only do so at the expense of other merchants who that money would have eventually made its way to had it been left in the hands of the rightful owners. So while my local grocery store owner is doing well, the company that makes and sells energy efficient windows goes out of business, and their employees go on food stamps, because I don't have quite enough money left over after taxes to put new windows in my house.

As a result of all this, the market gets distorted and eventually loses its ability to do the one thing the free market is best at doing: valuing products and services. You end up artificially increasing demand (and thus price) for energy efficient windows, but since the high price doesn't reflect the real needs of the market, it never achieves efficiency and you can't sell the right amount of windows to make the industry work. On the other side of the equation, you now have food prices that undervalue what the food is really worth (thus preventing many unemployed people from perhaps going into business producing, processing, marketing, distributing, and selling food).