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Obama’s Ag Secretary: Food Stamps “Put People to Work” with “Economic Stimulus”

Tuesday August 16th, 2011   •   Posted by David Theroux at 9:50pm PDT   •  

One in seven Americans now receive food stamps. As yet another indicator of the utter absurdity of Keynesian economics, Obama’s Secretary of Agriculture Tom Vilsack is claiming that food stamps (“Supplemental Nutrition Assistance Program”) “mean more jobs” and provide “the most direct economic stimulus”. In the process, he somehow fails to mention that food stamps provide a disincentive to work and penalize economic growth by reducing the funding available for firms to expand and hire by taking from productive work and subsidizing non-work.

Here is a report from

Agriculture Secretary Tom Vilsack repeated the White House claim that food stamps and other forms of government welfare are stimulus programs in disguise, stating that when government gives out money, it is creating jobs.

“But I should point out that when you talk about the SNAP program or the food stamp program, you have to recognize that it’s also an economic stimulus,” Vilsack said Tuesday on MSNBC’s Morning Joe program. (SNAP is the Supplemental Nutrition Assistance Program.)

“If people are able to buy a little more in the grocery store, then someone has to stock it, shelve it, process it, package it, ship it,” he said. “All of those are jobs. It’s the most direct stimulus you can get in the economy during these tough times.”

Vilsack made his remarks in response to a question from MSNBC commentator Wes Moore about a recent Agriculture Department report that approximately 46 million people, or about 1 in 7 Americans, now receive food stamps.

Vilsack claimed that by redistributing money from taxpayers to those on food stamps, the government is indirectly creating jobs because welfare beneficiaries will spend their food stamp monies immediately, rather than save it or invest it.

This claim, however, obscures the fact that both saving and investment are also economically productive activities contributing to credit availability and business growth respectively. It also ignores the fact that taxpayers whose money is used to fund food stamp programs may have spent their money on other things, including food, thus also contributing to the economy.

In direct contrast, see the following book that shows that federal spending and regulation increases unemployment and reduces economic growth:

Out of Work: Unemployment and Government in Twentieth-Century America, by Richard K. Vedder and Lowell E. Gallaway (New York University Press)

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August 2011