Starting today, there will be cuts in the benefits paid to poor families under the Supplemental Nutrition Assistance Program (SNAP) program.
[Today] is when Supplemental Nutrition Assistance Program, or SNAP, benefits are set to fall for more than 47 million lower-income people — 1 in 7 Americans — most of whom live in households with children, seniors or people with disabilities. Barring congressional intervention, the maximum payment for a family of four will shrink from $668 a month to $632, or $432 over the course of a year.
That amounts to 21 meals per month, according to the U.S. Department of Agriculture.
This move makes me furious beyond words. It is nothing less than an act of spite, to give a kick in the teeth to the most defenseless people in our society by cutting the budgets of everything that serves the needs of the poor in order to give tax cuts to the rich and preserve the bloated defense budgets. The amount of money involved is minuscule (about $5 billion a year, less than what banks like JP Morgan Chase are paying in fines for their misdeeds) but the cuts are devastating to poor people for whom every little bit matters.
Strictly speaking this isn’t true, although it is a widespread misconception.
There is actually no direct connection between cutting spending ‘in order to’ give tax cuts to someone else, because the federal government does not tax in order to spend.
The United States runs a fiat currency. Money comes into and goes out of existence by the actions of the federal government. Specifically, the government creates money when it spends, and destroys money when it taxes. In no real sense does the government require tax money in order to spend. A deficit is simply a net positive of money creation by the government in a given year, while a surplus is a net destruction of money during a given year.
But of course it is commonly believed that the federal government has no money, and must therefore borrow or tax before it can spend, i.e it must get existing money from someone else before it can spend anything. The simplest way to see that this is false is to ask oneself ‘where does money come from in the first place?’ There are now trillions of US dollars in existence, but in the not too distant past there were none. How did this happen?
It looks like the USDA is pricing meals at $1.70/meal. That seems like extremely frugal shopping.
Another concern is exacerbating the problem of food deserts. The less SNAP assistance people have in low income areas the less likely grocers will open stores which give people the opportunity to buy lower priced/highly nutritious food.
Yes, too right.
I’ve heard of studies (NB: not my area of expertise) showing that the poor travel less to get food, leaving some to the desperate circumstance of using convenience stores for a large part of their food purchases. Someone in this position, of course, is paying substantially higher costs per unit, and some foods are simply unavailable.
Another instance of the perversely high cost of poverty.
(As noted, this is not based on my own research, so I’d be delighted to be shown wrong …)
This was Obama’s doing right?
If the government makes money out of thin air, why would it ever cut any program from which it could gain any advantage?
You’ve correctly identified one significant part of the economy here -- but please don’t mistake one leg for the entire elephant.
Quite a few years ago, I lived in a very densely populated urban district where the only local food source was a convenience store. Edibles there cost more than in other, more affluent areas of the same city.
Their very limited shelf space included lots of dog and cat food -- but I never heard barking when I lived there, and the only cats I saw lived ferally in alleys.
Canned catfood on white rice makes a nice break from kibbles with powdered milk, in case you were wondering.
The government cuts programs because it doesn’t understand how its own monetary system works. That’s why it is conventional wisdom in both parties that the deficit is too big and must be shrunk. Both parties are wrong.
I’m not mistaking one leg for the entire elephant. I have no idea what you are even talking about when you use that metaphor.
The US government in particular seems quite ignorant of economics and much else.
But the history of debts coming due, and the consequences to those who can’t pay them, does indeed matter. Obama (for example) may agree that the whole thing depends on ultimately unprovable beliefs, and might even go along with the hypothesis that a different creed could work better, but would have every justification not to proceed on that latter basis until the new ideology became widely accepted. Undermining the “full faith and credit” of the dollar would result in financial mayhem which only a perfectly executed takeover of the entire economy could fix: Obama shows no signs of wanting that, nor of the competence needed to pull it off.
I alluded to the Blind Men and the Elephant story to point out that a fiat currency does not mean governments can manage their finances without regard to external opinions. With a better popular & elite understanding of the world, we would probably soon move away from capitalism itself as well as the current budgeting framework -- but without that as-yet-unnamed superior comprehension*, responsible reformers need, at a minimum, to partially “balance the budget” by increasing taxes on the wealthy while drastically increasing spending on our numerous neglected needs.
To do the latter without the former would work no better than tearing down one house to build another, during a storm.
* Or do you have a well-developed rigorous alternative economic/fiscal model we should consider?
Many reports point to House Repubs as the primary culprits, with Obama, Pelosi, et al offering their usual tepid resistance.
Legislatively, this comes from the expiration of part of Obama’s 2009 “stimulus” program. Had that program received adequate resources and better management, the US economy might have recovered sufficiently by this point such that its ending now would cause little hardship. It didn’t and it hasn’t, so BHO deserves a good share of the blame, but the Repubs have even more responsibility for the present & future suffering.
What you’ve written is indeed accurate. But it is only part of the story, so I think it ends up missing the point.
It is, in fact, true that that government can create money at whim. Unfortunately, if they were to actually do this in a dramatic fashion (not just piece-meal like it is accomplished today), inflation would rise and the value of the dollar would plummet. The reason we don’t see this today is because of the limited printing of money tends to be wiped out by the paying down of debt…hence the very moderate levels of inflation we see today.
With the limited amount of money that will be printed to keep the country financially stable, there are decisions that the government makes in regards to what money is spent in response to how much they collect. They are not interested in bypassing the lower income / higher expense process that is in existence, so their decisions are very much in line with that thinking. Whether there are realistic alternatives or not is actually beside the point; congress simply doesn’t care.
What they do care about is crafting budgets that are, to Mano’s point, increasingly harsh to the social welfare aspects of the US budget and continuing to maintain status quo with the military aspects of the US budget. Their unwillingness to address the income side of the equation does indeed support the richest individuals and corporations of this country at the expense of the increasingly shrinking middle class and lower class.