The Rising Cost of Food Stamps

A recent article in the Economist discusses the rising costs of food stamps in recent years. As the chart (right) indicates, costs have risen from $35 billion in 2008 to $65 billion last year. Participation has also increased, as nearly 45 million (or one in seven) Americans were recipients of food stamps in April 2011. With budget debates continuing, Republican leaders in the House of Representatives have proposed a 20% reduction in spending on the program by 2015 in their budget outline for next year. The author of this article points out, however, that benefits are "far from lavish," the average being $133 a month, and the recipients are the neediest portion of the population. About half of recipients are children and 18% are elderly. To be eligible, recipients must be receiving an income of 130% or less of the poverty line, but 41% of recipients earn half of that amount or less and 18% earn no income at all. The author also discusses the economic benefits of the food stamps program, quoting Jim Weill of the Food Research and Action Centre, who argues that food stamps stimulate the economy more than other forms of government spending because the money is typically spent immediately due to the low income of recipients.
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