Huh? Pelosi said that $1.00 of food stamps puts $1.79 back into the economy.

That’s a nice trick you spend $1.00 and it becomes a $1.79. Where do I sign up? Uh where did the 79 cents come from? That is the question. Now lets remember an important fact. The money for the Food Stamps comes from Tax revenue and additional debt the government takes on to for the program.

I have a few ideas that might explain the 79 cents.

Thought 1: The 79 cents comes from the person who is spending the food stamps. By freeing up money they would have spent on food they can pay a bill and buy other necessities with their own money. Also I figure that some of that 79cents has to account for the interest on the debt that the government had to take on to issue that $1.00 worth of Food Stamps, somebody getting paid interest.

Thought 2: That 79 cents is due to a supply and demand response due to an increase in a family’s food stamp allotment. They get more food stamps. They more and better food. Also this frees up more money in their budgets to spend on other necessities or pay a bill or two. This increase is going to cause a supply and demand response. More food is being sold so suppliers have to stock more, growers and manufactures have to step up production to meet demand. This then radiates out to their vendors and so on. The problem is that after the increase it will reach a steady state and that additional 79 cents goes away. Unless you are counting the additional money that the recipients are spending as a result of having more money.

Thought 3: Similar to Thought 2 that the 79 cents is due to a supply and demand response. As people lost their jobs or found personal incomes falling they cut back expenses everywhere they could including food. (less fresh more canned beans and cheap hotdogs.) This would have caused the demand to drop. Suppliers would cut inventory, growers and manufactures would reduce production. This would have then radiated out to their vendors and so on. Now that it appears we are nearing the bottom food stamp enrollment is going up because these people have hit rock bottom and need help. Then when they received food stamps they would then increase the food budget again. This as with the other two toughts would free up some of their money to use toward other necessities or pay a bill or two. Suppliers would then start increasing inventory, growers and manufactures would increase production and so on.

So what she is saying seems partially true when you look at it. But, food stamps is not the solution to the bad economy. The solution is jobs and better paying jobs. We are not going to get their by just putting everybody on food stamps. The answer is taking a moment to look at the small businesses and actually talk to them about what has scared them into inaction and down sizing.

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About wmatl

I graduated from Southern Poly in Marietta in 1989 with a Bachelors in Electrical Engineering. I worked repairing industrial electronics and control systems for over 15 years. Started a document scanning company with a friend in 2006. With the continuing struggling economy my involvement ended with the closing of the Marietta location in 2013. Now I am back to repairing industrial drives.
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One Response to Huh? Pelosi said that $1.00 of food stamps puts $1.79 back into the economy.

  1. Errol Kearns says:

    The Supplemental Nutrition Assistance Program, known as SNAP, is a federally-funded food program cared and provided through each state in the U. S. SNAP is designed to provide assistance to low-income people and households in lending food to the table. It is solid food and beverage specific and other items such as prescriptions, pet food, alcohol, cigarettes and paper goods are not involved in the program. It is easy to apply for the Florida food stamps program by visiting a local social security office or locating it on the internet.`

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