Food Stamps Are Not a Corporate Giveaway

Moneybox
A blog about business and economics.
June 13 2012 10:37 AM

Food Stamps Are Not a Corporate Giveaway

Back during the debate over the Affordable Care Act, some left-wing opponents of the bill had taken to describing it as a "bailout" of or "giveaway" to the health insurance and pharmaceutical industries. And of course in a certain light that's accurate. When you give low income people money to buy health insurance, you increase sales of health insurance and medicine. One of my standard ripostes, however, was to argue that by that logic food stamps are a giveaway to the supermarket lobby. After all, when you give poor people groceries someone makes money selling the groceries.

And now Twightlight Greenaway at Grist steps up to the plate, characterizing the Supplemental Nutrition Assistance Program as "another subsidy for Big Food."

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The problem here, again, isn't exactly that the analysis is wrong. Obviously companies that sell food have an interest in giving poor people vouchers to buy groceries with. But guess who else has an interest in that program? Poor people! I am personally a fan of converting programs like SNAP and Section 8 housing vouchers into pure cash grants, which would be even more helpful to the poor and somewhat less helpful to specific vendors. But in the broad scheme of things, food stamps are pretty "cash-like" and should be seen as what they are—a redistributive program to put resources in the hands of the needy. After all even if you did replace SNAP with pure cash grants, the recipients would still spend the money on something. It might go to Big Food or Big Furniture or Big Utility Bills or Big Auto Parts or Big Clothing but there's no getting around the fact that people mostly buy things that are made by big companies so anything that increases poor people's abiity to buy stuff will benefit some big companies that sell things.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.