Robin Hood With Food Stamps

Do food stamps stimulate the economy as Secretary of Agriculture Tom
Vilsack says? Speaking on MSNBC (where else) Mr. Vilsack says:

I should point out, when you talk about the SNAP [Supplemental Nutrition Assistance Program] program or the food stamp program, you have to recognize that it's also an economic stimulus. Every dollar of SNAP benefits generates $1.84 in the economy in terms of economic activity. If people are able to buy a little more in the grocery store, someone has to stock it, package it, shelve it, process it, ship it. All of those are jobs. It's the most direct stimulus you can get in the economy during these tough times.

In Keynesian Economics food stamps would be regarded as a transfer payment as would Social Security and government pensions. In each instance money is taken from one citizen or group of citizens and given to another group. Robbing Peter to pay Paul won't make a country rich in any one's economic theory. So who believes this nonsense. Mayor Michael Bloomberg does in a way. Back in 2009 with passage of the stimulus bill he crowed:


“These additional food stamps funds are extra help for people who are hurting, and I want to thank President Obama and the members of our Congressional delegation for helping deliver them through the federal stimulus plan.” And he goes on to note that thanks to the federal stimulus package, New Yorkers receiving food stamps will see a 13 percent increase in their benefits beginning this month, bringing an additional $25 million a month to the city.

In Keynesian terms food stamps are stimulative but only in New York City or any other locality that receives more federal money than it pays to the federal government in taxes. The states that send more money to Washington than Washington sends back feel an equal and opposite effect. If one believes the purpose of the federal government is to funnel money from red states to blue states then food stamps are a positive good. It's a zero sum game. Your loss is my gain if you are Mayor Bloomberg. Your gain is my loss if you are Governor Perry.