Food Stamps = Economic Driver?

January 28, 2010

It’s become standard fare for senior government leaders to declare that any and all subsidies are good for economic growth. Two weeks ago it was the Economic Development Administration’s John Fernandez. This week it’s USDA Secretary Tom Vilsack in a speech to the U.S. Conference of Mayors.

In his speech, Vilsack called the increase in supplemental nutrition assistance program benefits “an economic driver” that helps truckers, grocery stores and farmers. Those benefits, which used to be known as food stamps, have gotten the most funding of any USDA program.
Vilsack also cited increased funding to bring high-speed Internet service to rural America; accelerated implementation of the energy title of the farm bill; and USDA investments in small, local processing and slaughtering plants for “creating a framework for a 21st century America.”
Food stamps are an economic driver? Extending Vilsack’s logic, if the government put all citizens on food stamps it would create the economic equivalent of heaven on earth. There’s just one tiny problem: what the government gives with one hand it takes with the other.
Whether it is food stamps, high-speed internet, or slaughterhouses, the government has to tax or borrow the resources to pay for these programs out of the private sector economy. One can debate the merits of these programs, but one cannot deny that they come at a cost. And with history and practical experience as a guide, it is clear that the private sector is more effective than the government when it comes to feeding the poor, fostering technology, and processing animals.  
See here for information and essays on how to downsize the USDA.



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