As Paul Krugman observes in his column Friday, the Democrats are not doing much with their majority in Congress. The fiscal stimulus package "deal" agreed to between the White House and congressional leaders on Thursday is a Bush administration dream: a broad-based tax cut, plain and simple. It fails to do what many economists stressed should be the primary focus of any rescue plan: target relief at the poor Americans who can most be counted on to quickly spend any additional help and thus boost demand across the economy.
The most glaring absence in the terms of the deal announced so far: No extension of unemployment insurance or increase in food stamp benefits.
If the U.S. does officially enter a recession, help on unemployment benefits will undoubtedly arrive separately from this fiscal stimulus package. Or at least that's been the typical pattern in previous recessions. But what about food stamps?
The attraction of food stamps is that, unlike cutting a check made out directly to every American, increasing their value doesn't require goosing cumbersome IRS machinery into motion, a process that requires months or longer, even with the best of intentions. Food stamps are administered through debit cards -- at the flip of an electronic switch benefits can be boosted, with the advantage of being perfectly targeted at those most likely to need help in an economic downturn. According to longtime Food Stamp program advocate, Sen. Patrick Leahy, D-Vt., every dollar invested by the government in food stamps results in $1.84 in economic activity. So what's not to like?
Well, aside from Republican reluctance to boost any kind of government spending aimed at making a tangible difference in the public welfare, there is also the assertion, reiterated Friday morning by the consistently interesting and provocative Megan McArdle, whose libertarian-oriented blog is hosted at the Atlantic, that poor fat people shouldn't be encouraged to buy more food.
The poor don't need more food. Obesity is a problem for the poor in America; except for people who are too screwed up to get food stamps (because they don't have an address), food insufficiency is not...
The economy doesn't need a food sector more distorted by daft government programs than it already is. If you want to give money to the poor, give it to them. Even if they spend it all on drugs, it will hardly be much worse than spending it all on increasing their already astronomical obesity rates.
Would increasing food stamp benefits worsen American obesity? The claim that this is so has been a hobby horse of the right in recent years, most often associated with the writings of Douglas J. Besharov, the director of the Social and Individual Responsibility Project at the American Enterprise Institute, a hard-right think tank. But there are plenty of academics who argue otherwise. One economist at Sonoma State University declared in 2003 "that the data does not indicate any relationship between obesity and food stamps." That same year, a paper titled "Food Programs and Obesity in U.S. Children" by two University of Maryland Family Studies professors found no evidence that food stamps were correlated with childhood obesity in the United States. A study published in the Journal of Nutrition (also in 2003) by a City University of New York researcher did find that food stamp participation was "positively related to obesity in low income women" but a commentary in the same issue by a Cornell University nutritional scientist cautioned against making too much of the findings.
Low incomes in the United States are correlated with obesity, a stunning turnaround from the pre-World War II era. Low incomes are also correlated with food stamp program participation, so it makes sense that there would be some relationship between obesity and food stamps. But obesity is also correlated with disproportionate patronization of fast food outlets -- a practice that food stamp benefits don't cover. Which at least raises the possibility that strapped families would use a food stamp increase to buy more groceries instead of eating out at McDonald's, and thus potentially reduce obesity among the poor.
Ideally, a properly functioning food system in the United States would subsidize the production of nutritionally healthy food, rather than an abundance of high-fructose corn syrup subsequently injected directly into the body of nearly every American via the vehicle of cheap junk food. Addressing the root causes of that problem presents far greater challenges than simply helping out, as quickly and easily as possible, poor Americans in a recession.