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Food stamps don’t suck just because they don’t solve all your problems. Rather, they solve a baseline universal need, and they do it in an extremely attractive

by zaroth 8y ago

Food stamps don’t suck just because they don’t solve all your problems. Rather, they solve a baseline universal need, and they do it in an extremely attractive way which is even better than handing cash. A lot of people don’t realize that “food stamps” are just a debit card that you use to checkout at the supermarket, yes, even Whole Foods. There are some limits to what you can buy, but generally speaking if it’s unprepared food you can pay for it with the food stamp debit card. I was on food stamps for a short while. While the value of the balance wasn’t literally cash, it was equivalent because I was spending at least that much on groceries anyway. You can also carry a balance forward from month-to-month so there’s never a need to spend it down wastefully. It’s only about $100/person/month so it’s never too much for just food. Food stamps have low administrative overhead and low levels of fraud. It’s a government program I have very few gripes about, which is indeed saying something. And it’s not a small program either, around $100B per year (less in the last couple years due to very strong employment numbers).

TheSpiceIsLife 8y ago
$100 / person / month. $100B a year cost. 100,000,000,000 / 12 = would feed one person for 8.3B years. Or a billion people for 8.3 years. You can see where this is going. $100B should be able to feed one hundred million people for 83.3 years. Assuming $100 / month could feed a person. You can buy a lot of lentils, rice, and potatoes with $100. But you're saying food stamps costs $100B a year. Where is all this money going?
- deleted 8y ago
  [deleted]
- justinsb 8y ago
  I believe you forgot to divide by the $100
- evan_ 8y ago
  (I posted this before but made a mistake in the math, I think this is right now.) The latest numbers in Wikipedia say that SNAP costs $70.9B and distributes an average of $125/month to 44.2M people. That means the cost is $133 to distribute $125, or an overhead of $8 per person per month. Still not great but not nearly as bad as I was expecting, to be honest.
  - berbec 8y ago
    That actually does sound very bad. Even US health insurance companies, rightfully derided for profit mongering, manage to come in at single-digit overheads.
    - taneq 8y ago
      Wouldn't profit mongering result in a strong push for efficiency? Unless they count profits (or dividends) as 'overhead'...
    - simulate 8y ago
      The NIH estimates that the average person uses $316k ($419k in 2018 dollars) in health care spending over an 80 year life.[1][2]. That puts the value of health insurance at $5,237 per person per year. The average health insurance deductible is $4,358 and the average premium is $321 per month.[3] That means that on average US citizens pay $321 per month for (5237-4358) / 12 = $73.25 of expected value. That's a 4X markup over the expected value of insurance. Health insurance companies might be reporting single digit overheads but they are providing $1 of value for $4 and are inefficient. [1] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1361028/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1361028/ [2] https://www.mrmoneymustache.com/2017/11/05/when-your-shitty-health-insurance-doubles-in-price/ https://www.mrmoneymustache.com/2017/11/05/when-your-shitty-... [3] https://www.cnbc.com/amp/2017/06/23/heres-how-much-the-average-american-spends-on-health-care.html https://www.cnbc.com/amp/2017/06/23/heres-how-much-the-avera...
      - maxerickson 8y ago
        Families in [3] are doing better than the individuals you use to calculate the multiple. I guess it's still a whole number factor sort of thing. I also wonder if those numbers are accounting for Medicare and Medicaid (which add costs to the private insurance system).
      - user5994461 8y ago
        Costs in the last 80 years are not representative of costs today or in the next 80 years.
- code_duck 8y ago
  That is not a realistic or useful analysis of the economics of any food stamp program.
- reitzensteinm 8y ago
  $1000 should be able to feed a person for 83.3 years?
- c-van-z 8y ago
  There's a math error there. You divided $100 billion by 12 to get person-years, which would imply a cost of $12 per year. $100 billion / 12 months = $8.3 billion per month / $100 per person per month = 83 million people so $100 billion per year could give 83 million people $100 per month.
AnthonyMouse 8y ago
> While the value of the balance wasn’t literally cash, it was equivalent because I was spending at least that much on groceries anyway. You can also carry a balance forward from month-to-month so there’s never a need to spend it down wastefully. It’s only about $100/person/month so it’s never too much for just food. This is kind of the point. In all the cases where the person is spending that amount on eligible food regardless, it's already equivalent to cash so it might as well be cash without the administrative overhead. They'll spend the food stamps on food and the cash they would have spent on food on whatever they want. The only time it matters is when the person wouldn't be spending that much, i.e. they have an alternative source of food that doesn't take food stamps. In which case it only produces inefficiency. If you're content to eat free stale bagels and ugly produce every day so you can use the money for something else, you can't without breaking the law. Nor does it help you to try to stretch the money past the limit of the benefit amount. So people go to the grocery store and spend all the money, because a fresh bagel tastes better than a stale one if you have to spend the money on that. And if you have a consistent way to get by on $80/month in groceries, accumulating an extra $20/month in food stamp balance every month still doesn't put gas in your car. The same dynamic plays out in all the other assistance programs. There is money for low income housing assistance, but the natural thing to do there is to get together with multiple other hard off people, pool your resources and share housing. Which is not allowed. The programs generally prohibit methods of improving efficiency or stretching money. Even if you're dead set on not letting people spend the money on vices, why is there a whitelist instead of a blacklist? You can't spend assistance money on alcohol or cigarettes, fine. But if there is food assistance and housing assistance then why can't you spend excess food money on housing or excess housing money on food? Why is there a ban on business cards and brake pads?

by zaroth 8y ago

TheSpiceIsLife 8y ago

$100 / person / month. $100B a year cost. 100,000,000,000 / 12 = would feed one person for 8.3B years. Or a billion people for 8.3 years. You can see where this is going. $100B should be able to feed one hundred million people for 83.3 years. Assuming $100 / month could feed a person. You can buy a lot of lentils, rice, and potatoes with $100. But you're saying food stamps costs $100B a year. Where is all this money going?

deleted 8y ago
[deleted]
justinsb 8y ago
I believe you forgot to divide by the $100
evan_ 8y ago
(I posted this before but made a mistake in the math, I think this is right now.) The latest numbers in Wikipedia say that SNAP costs $70.9B and distributes an average of $125/month to 44.2M people. That means the cost is $133 to distribute $125, or an overhead of $8 per person per month. Still not great but not nearly as bad as I was expecting, to be honest.
- berbec 8y ago
  That actually does sound very bad. Even US health insurance companies, rightfully derided for profit mongering, manage to come in at single-digit overheads.
  - taneq 8y ago
    Wouldn't profit mongering result in a strong push for efficiency? Unless they count profits (or dividends) as 'overhead'...
  - simulate 8y ago
    The NIH estimates that the average person uses $316k ($419k in 2018 dollars) in health care spending over an 80 year life.[1][2]. That puts the value of health insurance at $5,237 per person per year. The average health insurance deductible is $4,358 and the average premium is $321 per month.[3] That means that on average US citizens pay $321 per month for (5237-4358) / 12 = $73.25 of expected value. That's a 4X markup over the expected value of insurance. Health insurance companies might be reporting single digit overheads but they are providing $1 of value for $4 and are inefficient. [1] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1361028/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1361028/ [2] https://www.mrmoneymustache.com/2017/11/05/when-your-shitty-health-insurance-doubles-in-price/ https://www.mrmoneymustache.com/2017/11/05/when-your-shitty-... [3] https://www.cnbc.com/amp/2017/06/23/heres-how-much-the-average-american-spends-on-health-care.html https://www.cnbc.com/amp/2017/06/23/heres-how-much-the-avera...
    - maxerickson 8y ago
      Families in [3] are doing better than the individuals you use to calculate the multiple. I guess it's still a whole number factor sort of thing. I also wonder if those numbers are accounting for Medicare and Medicaid (which add costs to the private insurance system).
    - user5994461 8y ago
      Costs in the last 80 years are not representative of costs today or in the next 80 years.
code_duck 8y ago
That is not a realistic or useful analysis of the economics of any food stamp program.
reitzensteinm 8y ago
$1000 should be able to feed a person for 83.3 years?
c-van-z 8y ago
There's a math error there. You divided $100 billion by 12 to get person-years, which would imply a cost of $12 per year. $100 billion / 12 months = $8.3 billion per month / $100 per person per month = 83 million people so $100 billion per year could give 83 million people $100 per month.

AnthonyMouse 8y ago

> While the value of the balance wasn’t literally cash, it was equivalent because I was spending at least that much on groceries anyway. You can also carry a balance forward from month-to-month so there’s never a need to spend it down wastefully. It’s only about $100/person/month so it’s never too much for just food. This is kind of the point. In all the cases where the person is spending that amount on eligible food regardless, it's already equivalent to cash so it might as well be cash without the administrative overhead. They'll spend the food stamps on food and the cash they would have spent on food on whatever they want. The only time it matters is when the person wouldn't be spending that much, i.e. they have an alternative source of food that doesn't take food stamps. In which case it only produces inefficiency. If you're content to eat free stale bagels and ugly produce every day so you can use the money for something else, you can't without breaking the law. Nor does it help you to try to stretch the money past the limit of the benefit amount. So people go to the grocery store and spend all the money, because a fresh bagel tastes better than a stale one if you have to spend the money on that. And if you have a consistent way to get by on $80/month in groceries, accumulating an extra $20/month in food stamp balance every month still doesn't put gas in your car. The same dynamic plays out in all the other assistance programs. There is money for low income housing assistance, but the natural thing to do there is to get together with multiple other hard off people, pool your resources and share housing. Which is not allowed. The programs generally prohibit methods of improving efficiency or stretching money. Even if you're dead set on not letting people spend the money on vices, why is there a whitelist instead of a blacklist? You can't spend assistance money on alcohol or cigarettes, fine. But if there is food assistance and housing assistance then why can't you spend excess food money on housing or excess housing money on food? Why is there a ban on business cards and brake pads?