Food Assistance Part II: Specifics

Who doesn't like to eat? Whatever mix of quantity, quality, or presentation you prefer, there is no doubt many of us have strong preferences for choosing the food we eat.

Americans collectively spend an estimated $1900 billion on food each year with the average adult spending $600 per month. Wow! While our wealth and incomes allow us to spend extraordinary amounts on food each year, more than 22 million households (close to 50 million Americans) receive public food assistance from the federal government via the Supplemental Nutrition Assistance Program (SNAP - a.k.a. food stamps). 

Per the Food and Nutrition Service of the USDA, this is an increase  of 171% in number of recipients since 2008 and 282% from 2000. Monetarily, the cost of SNAP has increased 459% ($61 billion) since 2000 to a total cost of $78 billion in 2012. In addition to SNAP, other public food assistance programs including WIC and Child Nutrition Programs bring the total federal public food assistance to $108 billion in 2012.

For a cost of $600 million per day, ($2 a day per person), every man, woman, and child could be fed in America. Projected over 1 year this would amount to $220 billion. The federal government currently spends $108 billion in food assistance. The $108 billion in public expenditures comprises 2.9% of all federal government spending (4.7% of revenue) and 7.8% of total welfare spending. As public food assistance is not a major contributor to the welfare state or deficit spending, I am more interested in revamping food assistance on principle rather than for purely monetary purposes .

References -
SNAP statistics: USDA Food and Nutrition Services
Government spending statistics: US Government Spending


As covered in Food Assistance Part I (please read to have a general idea of my plan), I believe:
(1) It is the role of the federal government to ensure each citizen's basic needs (including food) are met.
(2) State/local governments and private charities should go above and beyond the proposed system to provide a level of public assistance they prefer.

The primary goal of my proposed public food assistance is to readily, sufficiently, and efficiently provide short-term support to individuals in need to transition into a sustainable living situation.

 
I believe the primary safety net for individuals should be first themselves, secondarily friends/family, thirdly private charities, fourthly short-term federal/state/local government public assistance, and fifthly being a separate public funded support system to be detailed later.



Currently the majority of public food assistance is provided through SNAP:

• Eligibility requirements (basic):
• Monthly Income: < $1211 + ($429 x household size)
• Resource: Must have less than $2000 in cash
• Maximum monthly dispersed: $200 + (~$150 x household size)
• Recipient is expected to contribute 30% of net income after deductions
• Maximum limit of assistance: No limit
• Maximum length: No limit
• 3 month time limit if unemployed and not meeting work search criteria
• Purchasing restrictions: See Food and Nutrition Service
• Repayment plan: None
• 2012 Participation
• Number of people receiving: 47.6 million
• Cost per year: $78 billion for SNAP ($108 billion with WIC and Child Nutrition Programs)

I propose the following changes designed to transition short and long-term support to friends/family, private charities, and state/local governments . (Please refer to Food Assistance Part I for general information.)

• Eligibility requirements:
• None - Everyone who has not reached their maximum lifetime limit is eligible.
• Maximum monthly dispersed: $120 + ($90 x dependents)
• Maximum lifetime limit: 4 x ($120 + $90 x dependents)
• Designed to cover for 4 months at maximum assistance.
• Maximum length: Unlimited (don’t need with a maximum lifetime limit)
• Purchasing restrictions
• Restrictions are difficult as there is often a way to circumnavigate them. This being said, I think there are two options which may achieve a greater level of success. One is to enact very few restrictions, allowing great freedom with little exceptions other than say alcohol. A second approach would be to have an extremely limited formulary of items available for purchase. So much so stores basically dedicate an isle for those items eligible for purchase. Consistent with my belief freedoms should be exchanged for the security of receiving public assistance, I favor the second option.
• Repayment Plan: Complex

Comparison Chart

	SNAP	Proposed System
Income Requirement:	< $1211 + $429 x household size	None
Resource Requirement:	< $2000 in cash	None
Maximum Monthly Aid:	$200 + ($150 x household size) – (net income * 30%)	$120 + ($90 x dependents)
Maximum Benefit Length:	None	None
Maximum Lifetime Aid:	None	4 x $120 + ($90 x dependents)
Repayment Plan:	No	Yes

I believe an effective method of decreasing waste, fraud, and abuse of public assistance programs is to require recipients of aid to pay back into the system after achieving sustainable living conditions. My proposed repayment plan includes the following components:

Total Repayment Amount: Aid received + surcharge of 10-20% (based on time of repayment)
Grace Period: 3 months

• If Joe received $500 in aid he would be required to pay $550-$600 back into the system.
• Total surcharge would be based length of repayment. I propose providing an incentive for those who repay the aid they received quicker.
• Paid in full within 3 months (grace period): 10% surcharge
• Paid in full within 12 months: 15% surcharge
• Paid in full after 12 months: 20% surcharge

 Garnished Wages:

• Aid recipients would be extended a 3 months grace period after which wage garnishing would be enacted.
• Using current poverty guidelines, 20% of an individual's wages above the poverty threshold would be garnished until food assistance was repaid in full plus surcharge.
• Poverty Guidelines


Persons in family/household	Poverty guideline (annual income)
1	$11,490
2	$15,510
3	$19,530
4	$23,550
5	$27,570
6	$31,590
7	$35,610
8	$39,630
For families/households with more than 8 persons, add $4,020 for each additional person.

To further ensure repayment, a death tax would also be applied if needed.

While I have no hesitation acknowledging my proposed changes are not a panacea to the ills of both the lack of care to citizens in need, or the mismanagement of taxpayer funds, I do believe the advantages of enacting the proposed changes outweigh the disadvantages as outlined below:

Advantages:

• Less stringent eligibility and maximum monthly aid received requirements allowing for a greater number of people who need it to receive it.
• Decreased fraud/waste/abuse since outside of using identity theft, people will be required to pay back into system what they took out plus more.
• Disincentives in place to reduce unnecessary utilization.

Disadvantages:

• Things may get worse before they get better (happens with most change).
• Benefits eventually run out (reason for supporting private charities and a quinary safety net to be detailed later).
• Unsurprisingly since I custom fit the program to my liking I can think of few disadvantages :)

It is my aim to decrease the restrictions and barriers to receiving public assistance while at the same time decreasing the waste, fraud, and abuse associated with our current system. I believe the above listed changes move us in a direction closer to achieving those goals.

Next Post Topic: Book Review II: Economics in One Lesson


$1900 Billion Annual Food Cost Calculation Math

Adults (18+)

• 76.3% of population is > 18 y.o.
• Census.gov
• $150 per week ($7800 per year)
• Gallup

Children (0-18)

• 23.7% of population is 0-18
• Census.gov
• $37 per week ($1927 per year)
• USDA Center for Nutrition Policy and Promotion
• $204,060 cost to raise a child from 0-18 x 17% composed of food cost / 18 years = $1927
• Seems low...

Average = $7800 x 0.763 + $1927 x 0.237 = $5951 (adults) + $457 (children) = $6408 per citizen x 300 million people = $1922 billion each year, wow!

Private Charities Part V: Common Objections

After completing multiple posts on the potential advantages of private charities, I wanted to conclude with addressing a handful of common objections. It is my hope I have been able to effectively present my case of favoring private charities undergirded by private donations of time, talents, and treasures, rather than public assistance programs founded on forced support. All the while avoiding the pitfall of glorifying them to a point where I show them to be a magic bullet to cure all shortcomings of public welfare programs.

Fears/Objections -

1. Underfunded
1. Concern:
1. The concern of underfunding is perhaps the loudest war drum defending the need for public assistance programs. It is feared without a central collector and distributor (federal government) of welfare, those individuals in need will be unable to acquire the necessary assistance to meet their needs. This will result in unneeded and unjustified suffering as the resources exist to alleviate such suffering. Taken to an extreme, it is the “people will be dying the in streets” objection.
2. Rebuttal:
1. I still see the federal government serving as lender of last resort. (see Basic Level of Care Part I)
2. I believe citizens should retain the freedom to choose the level of welfare provided to their fellow citizens. (see Private Charities Part IV: The Freedom Reason)
• Actuality Junkie: 
• "If the charity cannot raise the funds it requires, then the people have spoken. Forcing a moral decision to be charitable on your neighbor via legislation for fear that they may not share your generosity is an abomination." 
• Maybe not an abomination but force typically only breeds bitterness and resentment.
3. I remain unconvinced private charities would remain underfunded.
• Decreasing central government welfare spending does NOT reduce total capital in the country. Freeing up capital may provide increased investment in the private sector which may lead to increased private jobs leading to decreased need for welfare.
• Somewhat of a stretch, but I do believe it will happen to some extent.
4. Social pressures will motivate the least generous individuals and businesses to become more generous.
• Example
I, and I believe others, would be more inclined to purchase products/services from those individuals/businesses known for being generous rather than those known for being greedy. Consumer preference would therefore provide social pressures for individuals and businesses to be generous with their profits.
5. In response to "people will be dying in the streets", the world reached a population of greater than 6 billion people without the aid of the United States public assistance programs. (and largely due to population increases in developing countries, not first world countries with large public assistance programs)







2. Unequal distribution
1. Concern: 
1. Similar in nature to the underfunded fear, the unequal distribution fear is a localized form of underfunding in which it is perceived total available resources exist to help all in need, however resources are insufficiently distributed to meet all the needs. 
• In particular, it is feared wealthier geographical areas will have greater giving capacities through increased collections as compared to poorer areas. This will result in an unequal distribution of charity. 
2. Perhaps of greater concern (to me at least), is the unequal distribution of charity to minorities (gender, age, race, ethnicity, etc. discrimination).
2. Rebuttal
1. Preface: I do believe unequal distribution would occur, however I remain unconvinced this is a negative consequence.
2. Unequal distribution may result in those in need moving to areas with excess supply (charity) resulting in a more even distribution of individuals requesting assistance. In addition, such an equal distribution (or equilibrium) may allow communities to more effectively address not only financial needs, but emotional and knowledge needs as well.
• May eliminate the “projects”, section 8 housing, tracts, etc.
3. Those who are concerned about unequal distribution would have the freedom to restrict the distribution of funds to the area of their choosing, in this case those areas which are most impoverished.




3. Increased Crime
1. Concern: 
1. Reducing public assistance programs will result in people becoming more desperate who may then resort to criminal activities to provide for their self-defined needs. 
2. In addition, another valid concern is society will spend resources on law enforcement, judicial systems, and jails when it may have been more effectively spent on providing welfare.
2. Rebuttal
1. I very much agree this is a difficult issue in which I do not have a strong rebuttal. Basically the consequences of getting caught must be greater than the reward of success.
2. Crime will eventually cause chaos and when criminals (with zero productivity) no longer have productive members to take from. They will have to disperse or become productive themselves.
• Non-criminals would eventually band together and create an environment where it is in the best interest of former criminals to become productive rather than criminal in nature.
• Will probably need to increase the ability of civilians to defend themselves.
• Sensitive issue right now.
• In the end though it is more effective and efficient for citizens to defend themselves than employ a massive law enforcement agency.
•  Such agencies are also at high risk for corruption.




4. Not all citizens will give
1. Concern: 

1. Some citizens will choose to hoard their time, talents, and treasures to themselves and not give to the “greater good”. Thus the burden of funding will be unequally distributed on the most generous.
2. Rebuttal
1. Of course this will happen, but I already support a basic level of care with the federal government acting as lender of last resort.
2. Social pressure (see above)
3. People have spoken
• Who made us king over other people’s time, talents, treasures. By holding this view we simply want to be gods over others. This invariably leads to social dysfunction as outlined in my freedom reason post.




5. Innocent will suffer
1. Concern: 
1. In the absence of public assistance, innocent victims who may be dependent upon others for the majority of their care (children, elderly, etc.) will disproportionately suffer.
2. Rebuttal
1. We already have child protection and elder abuse services for similar cases.
2. Giving, as with more impoverished areas, may be directly specifically towards children and elders
3. Private charities could choose to proactively seek out such individuals rather than waiting for them to come to ask for assistance.

I do want to acknowledge I do not believe I have profound insight or intelligence. Private charities may not be able to accomplish many, if any, of the work public assistance programs do. I would however say if public assistance programs are continued they would benefit from being managed by state/local governments rather than the federal government. This would allow citizens to move to those areas where they agree with the level of public assistance provided.

All things considered, I believe the potential advantages of private charities outweigh the potential risks. In addition, with our massive debt, our country may not have a choice but to scale back on public assistance programs. It may be wise to voluntarily transfer to a private charity system rather than haphazardly doing it under financial pressure and a high degree of urgency.

I invite and encourage readers to read Tragedy of American Compassion by Marvin Olasky and provide comments below or email me additional questions/concerns/thoughts.

Next Post Topic: Food Assistance Part II: Specifics

Private Charities Part IV: The Freedom Reason

Freedom or security? Which do you value more?

I believe most would agree they value both the freedom to make their own decisions, and the security of knowing the fruits of their labor will not be illegitimately taken from them whether through violence, theft, judicial dishonesty, catastrophic events, or even heavy taxation. Unfortunately as ideal as it would be to maximize both freedom and security, these two ideals are often inversely correlated. Stated another way, in order to obtain greater security, some freedom must be relinquished or sacrificed and vice versa.

A case and point of sacrificing freedom on the altar of security is public assistance programs. In order to increase security of basic provisions through means of government welfare, taxpayers are forced to relinquish freedom of choosing where and how to spend the fruits of their labor secondary to increased taxes. The forced infringement of freedoms is another reason I favor an increased role of private charities. 

Freedom Reasons:

1. Preface

I want to reiterate I am not against all forms of government managed charity. As detailed in my Basic Needs Part I post, I do believe the wealthiest nation in history has an obligation to meet the basic needs of its citizens. I do, however, support maximum limits, repayment plans, and other disincentives for utilizing public funds.

Furthermore, I see a role for government managed charity above and beyond the meeting the most basic of needs through taxation. If citizens are all about giving to government charity, by all means allow them to do so, but do not force those who do not believe in the grandeur of government assistance programs to financially support them. I believe governmental charity above and beyond the meeting of the most basic needs for a limited time period should abide by the same rules as all other charities. Specifically, the need to raise their own support through donations, and the limitation of only being able to distribute what they have brought in.

2. Citizens should have the freedom to pursue our own ends by our own means. 

• Flowing from my belief in small government (see Voting Issues post), government should strive to stay out of both defining individual ends and the individual’s means to their chosen ends.

I acknowledge some freedom must be surrendered in order to achieve a degree of security. However, I believe it is primarily the role of government to establish and preserve freedom and secondarily to protect its citizen’s freedom (security). For without established freedoms what is the government truly protecting?

Centrally planned systems appear designed for failure. When citizens are forced to support centralized systems, we lose our freedom of choice which frequently leads to resentment and distrust amongst each other and against the centrally planned system. For the larger the system becomes, the greater the likelihood individuals will disagree with certain provisions, yet continue to be forced to support it. Taking a few mainstream social issues as examples:

• What if one does not agree with providing disability to alcoholics?
• What if one does not agree with providing health care for ________?
• Such as pain medications for drug addicts.
• What if one does not desire to fund abortions?
• What if one disagree with subsidizing special interest groups?
• Farmers, dairy industry, oil, green energy, etc.

The oft resulting (and logical) outcome are citizens organizing and demonstrating against those parts they are for or against, hoping some political figure or potentially even more effective, some celebrity will listen. According to the Center for Responsive Politics, $3.28 billion and >12,000 lobbyists were accounted for in 2012. It may be better for all if the time, effort, and energy invested in lobbying and demonstrations would be used towards promoting individual freedom of choice rather than attempting to change public policy. 

While I do acknowledge democratic election of representatives is superior to numerous other forms of government, I fear democracy can lead to suppression of minority groups and incentivizes the formation of political and economical alliances, leading to further conflict. I would suggest a more libertarian approach would serve the interests of citizens, especially citizens of a minority (not in race but in issues), to a much greater extent. A libertarian philosophy also lessens the problem of attempting to answer the impossible question of how to redistribute wealth

(Who is wealth taken from? How is it taken? How much is taken? Who is it given to? For what purpose is it given/spent?)

by increasing individual choice through decreased government intervention.

3. Private means of increasing security are available, it’s called insurance.

• Health care, property damage (mortgage, auto, crop, etc.), disability, unemployment, life, malpractice (sorry I work in the medical field...), travel, and many more.
• While a person may not be pleased with the price of security, an insurance product may be individual designed for any desire.
• However, recognizing the true cost of security via increase transparency rather than clouded behind governmental bureaucracy should be celebrated.

Insurance is the private market’s answer to increasing security. Insurance allows individuals to determine their own optimal level of security. Outside of a national military, domestic law enforcement, and judicial system, most all other securities may be achieved through insurance.

4. If private charities are underfunded, it seems the public has spoken. In effect saying: “No, we choose not to fund assistance programs designed to _________.”

As already mentioned, I do see a role of the federal government to provide for the most basic of needs. However, if we truly wish to boast we are a country built on freedom, we must also be a country willing to accept the collective sum of individual choices, even if we do not agree with our companions’ self-determined ends and the means they pursue to achieve their chosen ends.

5. Social Dysfunction

Loss of freedom and forced support of ideals one may not adhere to also increases the risk of social dysfunction. Rather than a system of community, cohesiveness, compassion, generosity, and gratefulness founded on freedom, we have largely adopted a public assistance system founded on force and impersonal handouts. I fear forced support of any project, regardless of its perceived “good” for the “whole of society”, will produce a harvest of resentment, distrust, and division (defined as “class warfare” when applied to income redistribution programs). 

While I recognize a certain degree of security is needed for a well-functioning society, I believe it is the role of government to first and foremost establish the freedoms of all individuals and secondarily protect these freedoms. Unfortunately, through reckless spending on subsidies, favors to special interest groups (often not for the good of the people but rather garnering votes), unwise foreign aid, and other pet projects, I fear our freedoms will continue to be eroded under the banner of security and protectionism.

As cited in my post: Private Charities Part II: The Economic Reason, public assistance programs currently account for 60% of our national revenue (92% if you include social security). There is little doubt in my mind the American people will become slave to the lender secondary to federal assistance programs, various state programs, and a $16 trillion federal deficit. I encourage all to read Economics in One Lesson by Henry Hazlitt to further understand how economic freedom and all other freedoms are intricately linked. 

Although I do not believe an increase in the role of private charities is the magic bullet for solving welfare and social issues, I do believe it achieves better outcomes, lowers cost, promotes individual freedom and choice, and dissipates social dysfunction. 

Next Post’s Topic: Private Charities Part V: Common Objections