Preventing the nation from being caught in a poverty trap

Like all good-thinking Americans, I’ve always considered the food stamp program to be a terrible burden on this country. It forces the nation’s poor into a poverty trap and puts a serious strain on the country’s taxpayers.

That’s why I applauded when Congress came to a bipartisan agreement in January that would cut food stamp benefits by up to $90 a month for around 850,000 families, on top of the $36 a month cuts (the average for a family of four) from November.

But now new information is coming out that shows there might be a cost to these cuts.

To start though, let’s be clear on how the food stamp program hurts America. First, there is the basic, simple cost of them. Last year, the federal government spent $82.5 billion on the Supplemental Nutrition Assistance Program (SNAP), which is the official name of the food stamp program now.

That’s $82.5 billion coming directly from taxpayers. That’s right–we’re working so others don’t have to.

But before you get too angry at these freeloaders, understand that it’s terrible for those who use the program.

You see, as Representative Paul Ryan recently discussed, any program that provides financial benefits without requiring work or effort on the part of the recipient gets them into a “poverty trap.”

Poverty traps also make fun parlor games.

Poverty traps also make fun parlor games.

Someone who is given money for nothing has no incentive to go to work. Thus they continue not working, and never rise above the level of being someone who has to receive government aid. As Ryan also put it, they become takers, not makers.[1]

It’s clear that food stamps hurt both those paying for them and those receiving them.

While this analysis seems solid, the apparent open-and-shut case has neglected to consider the most important Americans of all: our corporations.

Wal-Mart’s most recent annual report warned shareholders of many risk factors outside the company’s control. Among them is this line item: “changes in the amount of payments made under the Supplement Nutrition Assistance Plan and other public assistance plans, (and) changes in the eligibility requirements of public assistance plans.”

Wal-Mart is the world’s largest public corporation, according to the Fortune Global 500 list in 2014, the biggest private employer in the world with over two million employees, and is the largest retailer in the world. It affects the economy on a global scale. And it is in serious trouble with reductions to the SNAP program.

You see, the two million people employed by Wal-Mart are often given low wages and short hours, so much so that many are eligible for, and on, food stamps. In fact, in many states, their workers are the largest group of Medicaid and food stamp recipients. SNAP allows the company to pay its employees sub-standard wages, which helps keep prices low for the teeming masses that shop there.

On top of that, more than half of Wal-Mart’s sales come from its grocery departments. And with many of their customers coming from low-income situations, they receive a lot of revenue from food stamps directly.

It’s a thrilling cycle. SNAP reduces the company’s costs by allowing Wal-Mart to keep wages low for its employees. Then it receives revenue directly from food stamps, some of it undoubtedly from its own employees. It gets taxpayers to subsidize its operations, which allows them to keep prices low, so the overburdened taxpayers and underpaid workers can shop there. It’s a win-win-win!

With reduced food stamp benefits, the corporate giant (and who knows how many others[2]) could suffer huge losses financially. They may have to cut employees, raise prices, and potentially stagnate the economy. All because the short-sighted government wants to save a few measly billion dollars?[3]

And of course, giving less money to poor people means they have less money to spend frivolously. Everyone knows the poor spend their money as soon as they have it; that’s one of the things that makes them poor.[4] If they’re throwing less money around, that’s less cash being pumped into the economy. The very fate of our nation’s financial strength could well be at stake.

Look, nobody wants to see these lazy moochers go out and join the work force and make something of themselves more than I do, but it looks like we’re going to have to keep them in their poverty traps. For the good of the country, I’m sorry, poor people, but you’re just going to have to continue receiving benefits.

1. It’s like the Bible says: Give a man a fish, and he’ll rely on you for the rest of his life, never give an honest day’s labor, and become a drain on society that ruins his entire family.
2. But probably none.
3. And help keep the poor out of poverty traps, of course. Never forget that cutting benefits is about helping the poor.
4. Along with their laziness at not going out and getting a job, and a general lack of willingness to pick themselves up by their bootstraps. I bet many of them don’t even HAVE bootstraps.

4 thoughts on “Preventing the nation from being caught in a poverty trap

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