FoodStamp Nation

Tyler Durden's picture

The USDA’s Food and Nutrition Service released a new report on Supplemental Nutrition Assistance Program (SNAP, commonly known as Food Stamps) earlier this week with some fresh data on the program. Given our earlier note on Mr.EBT, we thought the following brief clip from Bloomberg TV on the $82bn-per-year program would provide some rather shockingly sad insights and then Nic Colas' recent focus on the SNAP report provides some much more in depth color.  First and foremost, there are 46.5 million Americans in the program as of the most recent information available (January 2012), comprising 22.2 million households.  That’s 15% of the entire population, and just over 20% of all households.  Moreover, despite the end of the official “Great Recession” in June 2009, over 10 million more Americans have been accepted into the program since that month, and the year-over-year growth rate for the program is still +5%.  The USDA’s report is, not surprisingly, very upbeat on the utility of the program.  Fair enough.  But what does it mean when 20% of all households cannot afford to buy the food they need for their families?  To our thinking, it highlights an underappreciated new facet of American economic life – one that will be felt everywhere from the ballot box to the upcoming Federal Deficit debates.



Food Stamps – The Long Shadow Of The Great Recession

Nic Colas, ConvergEx.

Like most people in finance, I have been trained to think about information that occurs “At the margin.”  Yesterday’s price for a stock plus today’s information yields the closing price at 4pm.  The same holds true for macroeconomic data as it relates to bond prices, levels for commodities, and so forth.  There isn’t time to revisit everything that happened in prior days and weeks and months – we take it for granted that asset prices have that all figured out.  How many times have you heard “Oh, that’s old news; it’s in the stock.”


It’s all fun and games until someone loses an eye, as the old saying goes, and assuming that the past is the past is fine until it’s not.  There wasn’t much about the Financial Crisis of 2007 that wasn’t knowable in 2006; you just had to have a reasonable imagination and a respect for the irrationality of markets once the system began to break down.  But one lesson of the last five years – and there are many – is that you shouldn’t just assume that “It’s all in the stock.”  Reality checks on anything and everything are worth the time and energy.


One topic I personally find worth re-examination is the question, “How has America changed in the past five years that will cast a shadow over the country’s history over the next 50 years?”  Think back to the Great Depression and you’ll find the seeds of programs such as Social Security and even Medicare/Medicaid.  The deprivation of that decade convinced America that it wanted a society that actively tried to make life better for those at the bottom rungs of the economic ladder.  Take care of the old with a stipend from Social Security.  As the generation that lived through the Depression reached older age, they realized that they needed health care as well.  Enter Johnson’s concept of a Great Society and health care for senior citizens and the poor – Medicare and Medicaid.


The modern Supplemental Nutrition Assistance Program (SNAP), which most of us know as Food Stamps, also got its start in the Great Depression.  It was an effort to link the surplus food of the agricultural system with the poor in the nation’s cities.  Those in tough economic circumstances could buy “Stamps” that would entitle them to buy both regular foodstuffs as well as discounted surplus produce.  The program went dormant during World War II but President Kennedy resurrected it in 1960, altering it from a pay-for-stamps system to a straight entitlement.  With some tweaks and alterations, this is the program we have today – a nationwide system of evaluating those who at risk of food insecurity (typically making less than 130% of the poverty line) and giving them money to purchase food.


The trouble, as I see it, is that the SNAP program has become wildly successful.  That is not a slam against the people that use it – I personally agree that no one, especially a child, should go to bed hungry in America.  But it’s not hard to see where this program is creeping its way from counter-cyclical stimulus and support to a lasting entitlement program that will be very hard to change.


The USDA division that provides the infrastructure for the SNAP program, which is technically a joint Federal/State effort, put out an interesting report earlier in the week that gave me a chance to think through the program’s goals and consider its role in American society.  A few points from the report as well as the basics on the program here:

  • As of January 2012, the most recent month available, there are 46.5 million Americans in the program.  That equates to 22.2 million households.  To put these numbers in perspective, that is 20% of all households in the country.  If the “Food Stamp Nation” were it state, it would be the largest one in the Union.  If the adults enrolled in the SNAP program (about half the total) all voted for one Presidential candidate in the Fall, they would represent over 2x the margin of victory in the last election.
  • SNAP is not supposed to be the only source of food purchasing power for a household in the program.  The calculations used by the USDA to determine the amount of the benefit assume that SNAP participants will spend 30% of their income on food.  Keep in mind that the food component of the Consumer Price Index is 8%.  The average household in SNAP receives $277/month; the average participant receives $132/month.
  • The typical SNAP participant is a child under the age of 18.  This demographic accounts for 47% of the program.  Households with children account for 71% of all demand for SNAP. Surprisingly, the elderly are only 8% of the program.
  • Households in the SNAP program are overwhelming reliant on other government transfer payments to make ends meet.  Earnings only represent 30% of their income.  The remainder comes from Social Security (21%), Social Security Insurance/Disability (21%), child support payments (10%), and other mostly government payments.
  • It’s hard to know how long the current cohort of participants – those who started receiving benefits in the last 3-4 years – will be in the program.  Those in the program in the early-to-mid 2000s seem to stay enrolled for long periods of time – 7 years on average.  Over half of those who left the program returned within 2 years.
  • Less than half of the SNAP benefit paid monthly goes to buy food.  This is an unexpected finding, but the math behind it shows that when a household starts to receive SNAP, they shift spending patterns.  If the SNAP benefit for a given household is, for example, $100/person then the typical increase in food purchases is $14-47/person/month.

I could go on and on – the link to the full report is included below.  There’s some surprising stuff in there, like the fact that typical Democratic states are much worse at ensuring that their poorer citizens are enrolled in the program than all those supposedly heartless Republican enclaves.  Or that, contrary to what you’ve read in the press, EBT cards (the credit card-like method of payment used by SNAP) can’t be used at ATMs in strip clubs and casinos.  That is another program entirely.


But my key takeaways are that a large percentage of the population – 20% of households is a big number – is locked into this program.  There are endless studies in the world of behavioral finance that show that people are very quick to budget increases in disposable income as permanent.  And don’t forget that by the USDA’s own numbers, most of the benefit is effectively NOT being spent on food.  In the narrowest sense, the money spent on the SNAP program is tiny relative to the Federal budget - $6 billion a month, or a drop in the $270 billion/month government spend.


But this is where I wonder about the long shadow of the last recession.  Have we reached a point where Americans want a clear and potentially permanent social safety net?  And how far should it go? Again, the current SNAP program is a cheap way to provide this, so from a budgetary or societal standpoint it is hard to argue that it breaks the bank.  But what if it is an emblem of something greater?  In many ways I think this is a big chunk of what the November election will be about, and at least the Food Stamp program seems to show that Americans have made up their minds.





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goldencross10's picture

iPads still edible right?

Metalredneck's picture

They make a good cutting board, for those that still cook real food.

pods's picture

Flip it over and fry your eggs too!

Donnie Duvanie's picture

As I've said before, If I couldn't get my foodstamps, I don't know what I'd do. How would I get my soda pop and chips? Or ice cream and candy bars? Or my TV dinners (sorry guys) and popcorn? Or my New York Strip for the weekend Bar-B-Que? Life would be very hard. Yes, very hard indeed. 

Benjamin Glutton's picture

Why not take a government job?


Getting Paid 93 Cents a Day in America? Corporations Bring Back the 19th Century Nearly a million prisoners are working in call centers, working in slaughterhouses, or manufacturing textiles while getting paid somewhere between 93 cents and $4.73.

April 19, 2012 

Sweatshop labor is back with a vengeance. It can be found across broad stretches of the American economy and around the world.  Penitentiaries have become a niche market for such work.  The privatization of prisons in recent years has meant the creation of a small army of workers too coerced and right-less to complain.

Prisoners, whose ranks increasingly consist of those for whom the legitimate economy has found no use, now make up a virtual brigade within the reserve army of the unemployed whose ranks have ballooned along with the U.S. incarceration rate.  The Corrections Corporation of America and G4S (formerly Wackenhut), two prison privatizers, sell inmate labor at subminimum wages to Fortune 500 corporations like Chevron, Bank of America, AT&T, and IBM.

These companies can, in most states, lease factories in prisons or prisoners to work on the outside.  All told, nearly a million prisoners are now making office furniture, working in call centers, fabricating body armor, taking hotel reservations, working in slaughterhouses, or manufacturing textiles, shoes, and clothing, while getting paid somewhere between 93 cents and $4.73 per day. 

Rarely can you find workers so pliable, easy to control, stripped of political rights, and subject to martial discipline at the first sign of recalcitrance -- unless, that is, you traveled back to the nineteenth century when convict labor was commonplace nationwide.  Indeed, a sentence of “confinement at hard labor” was then the essence of the American penal system.  More than that, it was one vital way the United States became a modern industrial capitalist economy -- at a moment, eerily like our own, when the mechanisms of capital accumulation were in crisis.



ratso's picture

These 46.5 million are some of the poor in America that Romney is not concerned about.

economics9698's picture

The 46.5 million will starve because if inflation you fucking idiot.  Like Romney had anything to do with it you stupid fucking moron.  Get the fuck out of here.

JW n FL's picture



for ALL! of you that have been successfully programmed to believe the POOR! of America are to Blame!

for ALL! of you ignoring the Fact that Wall Street has been GIVEN! At LEAST 4 Times MORE! Money that ALL! of the military in the United States!! (that was waging 2 wars and multiple little fronts).

For ALL! of you that believe starving the most well armed populace in the World improves your quality of life and survivability!

This movie for you Dumb Fuck(s)!


The Poor! are NOT FUCKING YOU!!

You being Ignorant! and staying Ignorant!! is what is FUCKING THE COUNTRY!!

YOU! wanna be thinkers who refuse to the numerical facts and follow your feelings!

YOU!! are to Blame! EVEN MORE SO THAN THE POOR!! who produce NOTHING!!

Because Your! CONTINUING IGNORANCE!! Enables! the Government to FUCK EVERYONE OVER!!


aerojet's picture

Interesting!!! Punctuation! Shithead

Pladizow's picture

America: The first, third world, first world country!

johnu1978's picture

I've been saying for over a year that the real number of people on foodstamps is over 80,000,000. The government has been saying it's in the 40 million bracket for over three years now.

What other wonderful lies do they have to tell us?

If people want true food independence they'll either grow their own, or they'll learn about wild edible plants.


Edible Plant Tours

Xkwisetly Paneful's picture


Poverty is perpetually defined in the US as the bottom 1/6th or 16%-it is just so shocking that about that many receive food stamps,

despite many being obese.

Material poverty is just about dead in the US despite the idiotic notions to the contrary,

unfortunately it has been replaced by poverty of the human spirit which is generally what accompanies government dependence.


America the only nation in the history of planet earth to consider obese people who own homes, cars and more "poverty stricken."

Harbanger's picture

Poverty stricken fat bastrds are an obamination.

Harbanger's picture

Unfortunately too many people game the system and receive food stamps that shouldn't.  We all know about the lottery winner still collecting.  It's largely unchecked because there's a benefit to those promoting a large welfare state.  When we go broke, it's back to the cheese and bologna blocks at the pickup center. 

economics9698's picture


Ratso, Is anyone blaming the poor?  I am stating a fact.  The dirty deed is done, the inflation is coming, and the poor will starve to death.  Mitt Romney was a banker; he had nothing to do with the Federal Reserve, to the best of my knowledge.  If you political hack morons want to blame someone here is a list;

1.  George Bush I & II

2.  Alan Greenspan

3.  Ben Bernanke

4.  Bill Clinton

5.  Harry Reid

6.  Nancy Pelosi

7.  Henry Paulson

8.  Dennis Hastert

9.  Barack Obama

10.  Timothy Geithner

These people are guilty and these people should be blamed for the millions who will starve fucking political asshole.  If you want to help the poor support a end to the minimum wage, SS and Medicare.


Stax Edwards's picture


For those seeking to sharpen their critical thinking skills and ability to separate propaganda from facts I offer the following website:

Have not read/watched all of the content but from what I can gather the future of non-statist (critical thinking enabled) education may begin from a place like this.  Apolitical best I can tell.  Good stuff there fo sho.

Harbanger's picture

"Have not read/watched all of the content but from what I can gather the future of non-statist (critical thinking enabled) education may begin from a place like this. Apolitical best I can tell."


Apolitical? Non-statist?  Not.  It's definitely from the left.  It took 2 seconds to read about the author Carroll Quigley who is known for being a liberal inperialist and defender of bankers.  Another Harvard professor.  Do some research before you drink any kool-aid mate.

Stax Edwards's picture

The following advocates learning how to think not what to think.  It seems you already know what to think so I guess the message is lost on you.  Sorry about your luck.

I could really care less about the founders political leanings.  When you know how to think for yourself that sort of thing becomes more or less irrelevant.  Stick to the echo chamber jack ass it is much easier for you small minded types not having to actually think for yourself.  You want to see why we have the problems we do?  Take a look in the mirror asshole.

On another note, more good stuff about the financial crisis right here:

I don't give a shit what Burry's political leanings might be either BTW.

Harbanger's picture

Schools have slowly stopped teaching people how to think critically, logically or analytically for decades.  That's one reason you don't know enough to judge things from where they come.  You were purposefully schooled to be a mush brain who follows anything that sounds good.  It's not your fault, you're a victim.  It's just that now you've become an angry little pecker head who thinks he can save the World but can't even control his own emotions, never mind taking control over his own life.

Stax Edwards's picture

It seems I have struck a nerve.  So tell us big guy, what is it in that Trivium document that is promoting a statist liberal (etc.) agenda? Seems to me they are challenging the status quo educational model.  What gives?

And your delusions about my life are intriguing.  Tell us more oh enlightened one....

(I have no affiliation with them, have no idea who they are.  Simply enjoyed some of the work enough to think it merited a link,)

blunderdog's picture

You're jumping the gun by at least a decade.  "The poor" won't be starving to death.

What'll happen is the "affluent" and the rich will see increased losses to theft, violence, etc, in addition to their losses to inflation, until either the system falls apart completely OR they acknowledge that some changes have to be made in how society is structured. 

Then a real discussion may begin about the intersection between economics and politics.  Apparently the discussion cannot start until the "political" classes start feeling real pain.  Right now they can convince themselves everythings A-OK.

Xkwisetly Paneful's picture

Just like the explosion in gun sales has led to an increase in violent crime,

oh wait just the opposite has happened despite an economic depression-OH NO time to revise those grand delusions again.


blunderdog's picture

Where'd you get the idea increased gun sales would lead to an increase in violent crime?

Xkwisetly Paneful's picture

I got it from that place where they are making real changes to society.

Afterall every empire has ended in rioting and violence,

but if the US just makes changes  this time will be different.

I am not sure which is worse, ignoring how folks die coming to the US for opportunity, barely speaking the language, with crap educations knowing hardly anyone and somehow become productive legal tax paying citizens all the while the domestic poor can't get of their own way-blaming the wealthy for this phenomena,


or actually believing if societal changes were made  this time could be different.


blunderdog's picture

Yeah, I love America too, brah.  Rock on.

Harbanger's picture

Probably from MSM quoting another University "study".  Same place we all get of our BS ideas.

Xkwisetly Paneful's picture

Actually you should be blamed.

The completely, unaccountable social scientist who has practiced these social science experiments on the human race to epic fail worldwide proportions.

Guess what? After endless resources-pay people to not work, they are not going to work.

Pay people per child they will have more children.

Turn the justice system into a revolving door, no shit crime rates will go up.

Water down the education system to nothingness, no shit their furture prosperity levels will fall.

Create epidemic single parent households, no shit the schools will turn into quasi detention centers.

People should be thrown in jail for perpetrating these experiments on mankind.

nc551's picture

This is rediculous.  I can buy a one year supply of actually healthy food (grains & legumes) raw for around $600.  2,200 calories,  80 grams of protien per day.  This program is supposed to be supplemental yet they are spending 80 billion a year to 'supplement' 45 million people who are still going to spend 30% of their income on food.  If they actually just bought the food in the first place ( lets say a pessimistic economy of scale of $500/year/person) they'd be able to feed 160 million people with actually healthy food every year for the same money they are spending now just to 'supplement' 45 million.  Doesn't make sense? Follow the money.  There is a reason foodstamps are accepted at KFC, McDonalds, Taco Bell, etc.

ljag's picture

If u get a chance to watch something on Netflix, try a documentary called "Forks over Knives" will open your eyes even a little wider!

blunderdog's picture

    If they actually just bought the food in the first place ( lets say a pessimistic economy of scale of $500/year/person) they'd be able to feed 160 million people with actually healthy food every year for the same money they are spending now just to 'supplement' 45 million.

This is true, but the problem is that everyone would just start fighting over who would get to sell all those grains and beans to the government.  People in the bean business might be pleased, but it'd be about a day and a half before there were another 5000 lobbyists for pork, beef, or whatever demanding that their employers be "given the right" to sell their food to the Feds to give away to the poor.

Government writes checks not because it's a good way to do things, but because it's what the constituents DEMAND.  "Constituents" should be understood to mean "campaign contributors," not voters.

mjk0259's picture

Really? And do you actually do this?


$80 billion is less than we give to one bank.

Gully Foyle's picture


Dude, they don't hate the poor. They hate their own weakness.

They hate their inability to capitalize on a system that rich and poor alike game daily.

Look at this article, all about food stamps. Yet corporate welfare eats more from your taxes than food stamps.

Then again most are faggy little whiners who threaten in anonymity because they could never screw up the courage to do it in public.

They are the herd.

economics9698's picture

If you want to help the poor support a end to the minimum wage, SS and Medicare.

JW n FL's picture



I want to help everyone.

Ending Lobby Monies is a Non-Violent Start.

Harbanger's picture

"I want to help everyone."  that's funny.  Good answer, you get a trophy. 

Xkwisetly Paneful's picture

Instantly demand a refund on that cracker jack two cent analysis.

Excellent projection.

2/3rds of the federal budget is social welfare of one form or another, 1/3rd military.

You are the alpha sheep. Bitch and moan up a storm about anonymous faceless entities all the while existing like royalty.

Down with corporate welfare, tax them 5times on the same earnings  instead of twice and call minor reductions of that welfare as if it is somehow analagous

when the food stamp crowd starts employing millions of people and paying an iota of tax beyond excise taxes

your alpha sheep analysis still wouldn't hold.

But then again most are faggy little whiners who live better than their grandparents could have dreamed of but are genetically programmed to wake up in the morning as the perpetual victim of these nameless faceless entities.


lemonobrien's picture

the poor are the new fra gra; we stuff'em with hydrogenated oils, and chems, then suck da wealth dry through medical bills ans fore closures.

sgt_doom's picture

read and learn, douchetard

Your homework assignment, assuming you CAN actually read, is to study up on the destruction of the tax base and jobs base, and increase in the national debt, thanks to private equity leveraged buyouts, rampant hedge fund speculation, and this,

lemonobrien's picture

a pissed off hippie in seattle; almost as good as san fran. truth is, everybody is trying to fuck everybody else. and, if you're middle class; you getting fucked from both ends; but if your poor, you just suck a little cock once in awhile. The rich get to do what they want; piss on the poor, fuck some middle class, or play amongst themselves.

Whiner's picture

Right on, 9698. Food stamps to the moon and back. I see well dressed folks laying'em down and driving off with their groceries n their Mercedes! About a third are fraudulent. Feds have zero oversight of this lil' piggy. Go get yours!

surf0766's picture

Hero of the day for that quote

BlueCollaredOne's picture


Every fucking post of yours trys to fling shit at republicans, as if anyone on this blog believed in your false left right paradigm bullshit.  Red vs Blue may keep the rest of america placated, but sorry, you're dealing with a completely different beast here.  That shit you spew may work on yahoo, MSNBC, FOX, Etc. but you're wasting who ever is paying you's time with it here


Go die a slow death you fuck

JW n FL's picture



Planet Kolob will save us!!

just like Obama did!



Likstane's picture

Ok, so both Uncle Milty and Burka-man both are 'christians'.  Neither seem to represent Christ.  I don't know if Mr.Paul is a real Christian or not, but he seems to tell the truth.  I think he is probably starting to recognize his eventual demise into the dustbin of history, and often times old men will care less and less what other people think about them.  It is a wonderful thing to know the truth.  If your point is to expose Uncle Milty as a hypocritical fake or just a complete wackoid, you have no argument with me.  I will prob vote for the old man(like voting matters), but I would support him even more if he told the GOP to FSO and go it alone. 

I got into an argument with a 70 year old black woman at Wal-mart yesterday.  After she accepted a couple bucks to pay what she was short, she called me a nice man just like Obama.  That went pretty well from there/sarc.  This is the public that will re-elect either the MOOslim(credit TOYTV* Freddie) or the rubber underwear guy.  Hell-yeah!!!

All I really know is that when death gets close up, the truth either shows or goes.  Maybe that's why there seems to be so many old people going crazy. 

*turn off your tele-vision

JW n FL's picture



Planet Kolob does NOT! eqaul Christian!

O'Bummer in the Pro-Black Panther Church does NOT! equal Christian!

so, what have we learned today..

there will be a test later!

when the hungry people start shooting! LOL!!

AcidRastaHead's picture

He's not worried because he'll 'fix it".  He'll just tinkle ... er ... I mean trickle on them.

The Alarmist's picture

Welcome to what Max Keiser astutely calls the Casino-Gulag economy.

surf0766's picture

Keiser seems more socialist than anything.

Bay of Pigs's picture

Yeah, he's a real commie isn't he? LOL.