Washington – Food Stamp Stimulus Provides Greater Economic Boost Than Tax Cuts

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    Washington – Some lawmakers on Capitol Hill have begun talking about the idea of a second stimulus package to boost the economy. Meanwhile, the effects of the first one are being felt in places you might not expect.

    CBS News correspondent Terrell Brown reports on one ripple effect stretching from coast to coast.

    John Sweredoski is seeing the green shoots of economic recovery on his own farm in southern California

    “I’m hiring people. I’ve never sold so many vegetables in my life,” said Sweredoski, co-owner of Takahashi-Sweredoski Farms.

    Sweredoski is reaping the early benefits of President Obama’s economic stimulus program which gives poor families additional food stamp money to spend each month.

    One Los Angeles market has had an 88 percent increase in food stamp purchases and that has given Sweredoski more money to spend on expansion.

    “I recently bought a new John Deere tractor,” he said, a purchase that hopefully added – or at least saved – American jobs in another part of the country.

    Starting in April, a family of four on food stamps received an extra $80 a month – from $525 to $606.

    The Department of Agriculture estimates that every $5 of food stamp spending results in $9.20 worth of economic activity.

    That’s why the food stamp boost is also helping this in New York City, where one supermarket manager says his sales are up 10 percent since the stimulus program started.

    “We’re actually thinking of hiring more people,” said Jose Almonte, the manager of an Associated Supermarket.

    “Food stamps have the biggest bang for the buck of any kind of stimulus,” said Moodys.com economist Mark Zandi.

    That’s because food stamps put money into the hands of people who will spend it quickly.

    It’s estimated that a $1 increase in food stamps creates $1.73 in stimulus. Infrastructure, another high-impact stimulus creates $1.59 for every dollar spent. Compare that to tax cuts which generate only $1.03 for every dollar returned to taxpayers

    The food stamp stimulus, while powerful, is temporary. But it’s a spark that can ignite business – and put more food on the table during difficult times.

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    15 COMMENTS

    1. This article makes a very important point. We should be giving more money to the poor to spend on food and clothing then rewarding the rich with more tax cuts that they don’t need. The rich have plenty of money to cover their essentials. The poor are really suffering in the current economy and taking a bit more from the rich and giving to the poor is in the spirit of yiddishkeit.

      • You seem very sincere and that is admirable. Please keep in mind: Tax cuts for the rich help the poor. When rich people have more money they buy more houses (built by the poor), paint their houses (painted by the poor) and eat out more often (where they are waited on by the poor). When you raise taxes on the rich, they stop buying yachts. Guess who lose their jobs? That’s right, the poor fellow who was building the boat. Trickle down economics, aka Reaganomics was much maligned by the liberals, but it worked. The greatest econimics boons since WWII occured after massive tax cuts (Kennedy, Reagan, and GW Bush).

    2. Yeah, brilliant. So all the people not working get more $$$ and free handouts – and the working guys like me who are not eligible for food stamps get zero. I think I’m gonna quit my job and start applying for all these programs. Hey, if ya cant beat em… join em!

    3. This is very good to hear. I am sure that the people on food stamps appreciate it, and now we see that it boosts the economy. I am glad that poor people in this country get enough to eat at least.

    4. it’s about time the people on welfare did they fair share for the economy.
      Wait a minute where is the money coming from that goes onto their food stamps?
      Thats right the people who pay taxes.
      I’m glad that i wasnt the genius to point out this fact that poor people blow the money that is given to them , while people who work actually save their money.
      What a wonderfull socialist country we live in now

    5. In every society there will be rich and poor. As a govt there is a responsibility to help the poor. Gov’t assistance is meant to hekp people through hard times, and not as a way of life.
      The govt is going to be making a second bailout. Bailout means your and mine tax dollars going to BS jobs, but meant to generate and stimulate an economy. What this article is saying that the return on investment for the govt looking to stimulate the economy is greater on food stamps than on bulding “green” trains.

      • AuthenticSatmar: Can you please tell me where in the Constitution, our county’s governing document, it states that the federal government has a responsibility to help the poor?

    6. being that food stamps is made to buy FOOD then obviously that is all they will be able to spend it on, gone are those days when ppl paid their tuition and what not with food stamps, what then do we expect them to spend it on
      and my my im so glad that my taxes have given the “poor” ppl more money to buy themselves sandwiches and expensive drinks by yossi’s while i have to wait on line to pay who knows how long for the food stamps machine to finish

    7. There are few authentically poor people in the US. Our so called “poor” are the richest poor in the world. Go to the third world if you want to see real poor.
      Here we have parasites sustained by our welfare system. Stalin would have sent our so called poor to work camps.

    8. you guys can say all you want but most people that shop are not the rich, the rich make money from the middle class and poor shopping we all need each other in one way or another and by helping the poor and middle class the rich get richer and they give someone else a chance to climb the letter too but that they wouldnt want because it can mean competition for themselves.

      • This is really Economics 101. The rich create opportunities for all of us. The poor spend money at rich people’s stores, but how did the poor get their money in the first place? Their rich boss paid them. Think about the following: If a particular economy had no poor people or middle class people, would the rich manage? Most definitely. If an economy lacked rich people would the poor manage?

    9. they should do the same with the 75 millon to refinance mortgages instead they give sec 8 to struggling homeowners to pay their mortgages you will see a big turnaround

    10. Let’s break this down. First, the ‘poor person’ gets more food stamps. They in turn do two things. First, they buy more food, which effects:
      1. Whoever produced the food: Whether it’s grown or what not.
      2. Whoever packaged the food.
      3. The store that sold the food

      Now, there’s also tons of businesses which support those businesses, like marketing, transportation, etc. But obviously, that’s an impact to the economy.

      Now the second thing that the ‘poor person’ does is take money which they formerly used to supplement their food stamps (they’ve done studies, feeding a family on food stamps entirely is nearly impossible in many locales), and use it elsewhere. Most often:
      1. Clothes
      2. Household Items
      3. Saving

      Now I know, everyone is thinking big screen TVs and what not, but if you’ve ever spent a single day in a state aid office, you will know that the system is not full of nothing but deadbeats and scammers. Yes, there are some, but many are just people in a bad situation, and they consider it temporary. Consider just how many of the ‘middle class’ have ended up homeless in the last 12 months. Those people are most likely on state aid at the moment.

      Econ 101 folks.

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