At an average monthly cost of $134 per recipient, that’s $6.26 BILLION injected into retail food stores every month. Or roughly $75 billion per year.
Total supermarket sales in 2011 was $584.369 billion. Using this number as a gauge, current food stamp use represents nearly 13% of all retail food sales.
That’s not exactly a government monopoly like they have on student loans or mortgage guarantees, but it’s certainly enough to contribute to price increases. And if we were to add in other welfare programs and farm subsidies, the percentage of food sales with government handouts is likely much higher.
Additionally, since the U.S. government borrows 54 cents of every dollar it spends, every expense adds to the weakening purchasing power of the U.S. Dollar, putting further pressure on the cost of essentials like food and energy.
Max Keiser
Financial War Reports
Wake me up when it gets to 33.3%
Have you looked at the food items that are approved for food stamp use? They are the lowest cost and lowest quality items. The alternative to food stamps would be starvation for a lot of people. I don’t think this is a stand that you really want to take. What we need is more economic freedom and a lot less of spiteful regulation.
I call bullshit. The symptoms that you describe are caused by inflation of the currency, aided by a declining supply.
The “food stamps” do not increase the amount of food sold; human consumption is limited to the size of one’s stomach, and no, it’s not like the “suppliers” of food are buried under stamps – they’re buried under inflationary dollars.
The Dutch enjoyed their welfare-system for quite some time and have proven that the system works. But hey, you’re free to blame everything on being “social”.
I agree with the various pundits saying that ‘merica will have to encourage a lot of folks to get back into growing food to be able to transition gently to a new humans-in-nature pattern . Izzit under 2% of the populaton now in ag production? Higher food costs will enable many more small farmers to make ends meet. The cheap mechanized subsidized food dumpimg on the world by usa/europe/japan has ruined many a local third world farming economy. This was the reason that the South walked out on that meeting in Cancun some years back where the Korean farmer commited suicide. Or more precisely the north couldn’t/wouldn’t even offer the south any kind of initial timetable for removing subsidies. Food is really more valuable in fiat terms than what they are charging now. Of course profiting from commodity food speculation is a supreme evil. Does your bank make its money off the sweat of the po peoples? Finally perhaps higher costs for bread(artisan sourdough $4+ in my neighborhood) might stimulate people to question the underlying empire machinations behind the bread and circus routine, eh?
Why does JPMorgan have a monopoly on food stamps distribution? Would it not be more competitive to have 50 different banks distribute the benefit, one bank in each state. This might help keep some of the smaller regional banks from going bust. Even dividing the business between 13 banks one in each Federal Reserve district would be more competitive.
Gov. welfare “Food-stamp Gourmets”? Gourmands, even?
How much of that 13% would not be substituted by normal spending from personal budgets? How much further could they still downgrade their living habits and “standards”? Would this spur bankruptcies, defaults, and walkouts? How many recipients can still get new “normal” debts to pay for food? How many would resort to (more?) crime to feed themselves and theirs?
What about the “domino-effect” of the resultant slump in food sales? On the street, at least. After the “weak hands” are forced off the streets, wouldn’t “ghettonomics” dictate ore extortionate prices fro the new food-ghetto lords? With that, wouldn’t prison supply contracts go up even more, to compensate? Aren’t those contracts supposed to be more intensely “padded” than the more general kind?
Lastly : how much closer to the food revolt tripwire graph’s turning point would the US be, without food-stamps or their equivalent?
I never considered that food stamps contribute to higher food prices, but that is not a stretch. Not feeding the poor in public as part of a conspiracy to enforce some type a food monopoly is a stretch. Here, criminalizing feeding the poor in public was part of a public outcry of those who do not wish to see that we have hungry people in the US.
Soup kitchens, food pantries and buddy packs for schools are still allowed. Those people not wishing to acknowledge the poor can pretend the soup kitchens are restaurants, food pantries are grocery stores and the buddy packs do not exist.
@SomeAnon
Is the point not that if government is giving free money in the form of food stamps to people to buy the shitty food, then the shops can charge more for the shitty food? The price discovery mechanism around the food is broken because although the demand is real, the value of the stamps is not limited to the buyer’s earning ability, but by the governments ability to borrow money.
It’s not a supply/demand issue. It’s a price discovery issue.
Hey how about another cobbled together idea chain. The rich folk finally get the noblesse oblige
http://en.wikipedia.org/wiki/Noblesse_oblige
picture and decide to really follow that conservative compassion idea
http://en.wikipedia.org/wiki/Compassionate_conservatism
and act to ‘get over’ that worst sin of aboriginal peoples,- stinginess- and begin to share the wealth from automated machine production. (see H. Marcuse and Buckminster Fuller) (but ahh… the pleasures of GMO cornflakes)
Then what some in the past, have framed as a -welfare state encouraging sloth- could become Actually a society where the haha, real men could spend a lot of time hunting and fishing and burning over dense tree stands)
http://www.npr.org/2012/08/23/159373770/the-new-normal-for-wildfires-forest-killing-megablazes
and learn to become stewards of the uncultivated lands, (i.e see the track record for ‘ducks unlimited’ on conservation)
The women would have time to stay home and nurture children and community in the cultivated lands and those urban centers where the high arts could now flourish. (Maybe the place for the -other than conventionally gendered-) Of course we know the rich already donate to opera and art museums, eh.
I personally have heard world class buskers on the sidewalk in Germany playing Villa Lobos and Vivaldi who were trained for free at the collective expense of the soviet union. Just think what artists the wealth of the Bill Gateses, Buffets and Kochs could turn out. Besides the cash could provide wonderful occupation opportunities for music teachers. I could use encouragement like that to pursue my bliss in this short sojourn on this side of the grass.
Where the money comes from does not increase the food prices.
They increase from demand, which is based on population. And supply which has been restricted because of a massive drought the likes of which has not been seen since the great dust bowl.
@Aaron
It’s not free money. And no, it does not affect the price, since the demand does not change.
This is what we call a “leaky abstraction”; the fact that the consumer did not work for his money translates to “free money” in your context, simply because the argument fits the conclusion.
As much as people would like to blame the hungry that cannot support themselves, they don’t cost that much. They cost almost nothing, compared to saving one of your precious large banks. What you gain is preventing the poor from going deeper into debt, from stealing, from doing what every human would – try to survive.
Providing food for the hungry is a very small sacrifice one makes before one speaks of “civilization”. If your neighbour is dying in the street, you cannot claim to be civilized.
As several have already noted:
food stamps do not add to aggregate demand, saying they cause inflation is nonsense.
Food price inflation is caused by debasing the currency, ZIRP, QE and other shenanigans coupled with drought and market distortions.
Wanne see some deflation? Get rid of food stamps, let millions die in the streets. Aggregate demand for food would plummet and so would prices.
@SomeAnon Ok, so you would prefer to call free money something different to pretend that it’s something other than it is. That’s fine with me because it’s besides the point.
The point is that price is not only determined by supply & demand in the way you suggest. When you inject money, that can only be spent on certain foods, into the system you allow the sellers of that food to raise prices without losing customers. When the basic foods increase in price the state is obliged to increase food stamp allowances and the prices can raise even more.
Much the same as house prices would be anormously lower if banks couldn’t create new money out of thin air. The demand for houses is not substantially more that it would otherwise be, yet the availability of conjured credit distorts the market so that we end up working our entire lives to pay for a simple home.
They (food stamps) are, however, “money” granted to and concentrated in priviledged GS, which uses it to speculate around, inflating everything – including the commodities ergo food market. Guess that works. GS as a financial slumlord. Or overlord.
The ghettonomics angle also appears to have some merit. The ground level is so dismal and abandoned, unprotected, that the few that do decide to do business there, have something of a captive, prisoner, near monopoly of the clientelle. Such “asymetry” lacks any scruple of equality. To call it “fair” is a cynical mockery of the abuse and exploitation of the deprived.
Food Stamps, then, would resemble “slave-scrip” emitted by concession to priviledged cronies (who concentrate wealth) , To be exchanged for somewhat monopolized and thus overcharged “slave food”. Like an economic “Township”, in an economic apartheid.
… In South Africa, the term township and location usually refers to the (often underdeveloped) urban living areas that, from the late 19th century until the end of Apartheid, were reserved for non-whites (black Africans, Coloureds and Indians). Townships were usually built on the periphery of towns and cities.[1][2] The term township also has a distinct legal meaning, in South Africa’s system of land title, that carries no racial connotations. … – http://en.wikipedia.org/wiki/Township_%28South_Africa%29
and the food is likely contaminated with radiation as is the tobacco
Tony Blair, nuclear power, depleted uranium, radioactive tobacco and the Nobel family have in common?
[…]
Just before Silent Storm’s television release it was revealed in the Bulletin magazine (September 1, 2004) and followed in the European press that Tony Blair had lived in Adelaide during the period of the British Tests in Australia. Blair was three when the British detonated their third atomic device in the Maralinga desert region on 11 October, 1956 and an unanticipated wind change blew the radioactive cloud toward Adelaide.
British medical researcher and toxicologist Dick van Steenis told the Bulletin that the death of Mr Blair’s mother from thyroid cancer could have been caused by the family’s exposure to the radioactive fallout. He said:
“Adelaide in South Australia was plastered with radioactive fallout from 11 to 16 October, 1956. As a youngster in Adelaide drinking local milk, Tony Blair is very likely to be at risk of bone cancer himself.”
Blair’s mother, Hazel Blair, died 19 years after the blast following a long battle with thyroid cancer.
[…]
http://nuclear-news.net/2012/09/09/tony-blair-nuclear-power-depleted-uranium-radioactive-tobacco-and-the-nobel-family-have-in-common/
you can trust the corporations..??