Supplemental Nutrition Assistance Program

Supplemental Nutrition Assistance Program

Analyze the arguments for government intervention as opposed to arguments for market-based solutions. Hint: See the information about market failures.

Supplemental Nutrition Assistance Program (SNAP), popularly known as the food stamp program, was created to assist individuals who cannot purchase food, which is a necessity. In 2000, at least 17 million citizens participated in SNAP. During this period, its cost was less than $18 billion. Today, the social welfare program costs taxpayers at least $78 billion annually and benefits at least 48 million citizens. Regardless of the increased number of beneficiaries, 18 million households lack food security (Tanner, 2013). This situation raises questions regarding the efficiency of the program. The main concerns revolve around SNAP’s high costs of administration and fraud/abuse. The main challenge that the program faces is insufficient resources to make food purchases. In terms of the market system, SNAP provides beneficiaries with the right to purchase food at any store of their choice. Its reliance on the private sector has led to its significant success. Additional restrictions on food purchases would result in additional administrative costs. Thus, it is recommended that the current regulations remain operational. However, the eligibility of candidates is determined by numerous factors expanding the number of beneficiaries as well as administrative costs.

Examine who has been helped and who has been hurt by the selected government intervention.

SNAP has been found to assist individuals who live in poverty, especially children. In 2014, more than 4 million individuals accessed food through the program. The current numbers are considered understated as food security has been reduced by 30 percent. At least 530,000 homes have attained food security through the program. Low birth weight has reduced by at least 5 to 23 percent as pregnant women access food stamps. Several studies show that more households have greater access to nutrients, especially for preschoolers. The improved nutrition is a sign of improvement resulting from the program. Children that benefit from the program perform better at school. Most importantly, families can access preventive care easily as money is not held up by nutritional needs (Long-Term Benefits Of The Supplemental Nutrition Assistance Program, 2015). Undoubtedly, SNAP is a beneficial program to the participants.

Assets are part of the factors that determine the participant’s eligibility. Thus, families may choose to avoid an accumulation of assets to retain their eligibility (Ratcliffe, McKernan, Wheaton, & Kalish, 2016). Such is the case for individuals who do not understand the role of assets in the determination of eligibility. The need to document the assets of applicants increases administrative costs significantly. Due to the program’s expansion, taxpayers pay at least $78 billion every year to support the program (Tanner, 2013). In addition, since the program is intended to help those in dire need, most choose to avoid participating in the financial sector as bank account owners or setting aside significant savings. Thus, the program loses some eligibility due to its inability to create food security or encourage financial improvement among participants permanently.

The initial food stamp program began in 1939 and ended in 1943. The government incurred $262 million during this period to provide low-income families with food. The number of participants was at least 4 million. Fraud cases and lack of surplus food brought the program to an end. The Food Stamp Act of 1964 initiated today’s food stamp program. The program’s mission was two-pronged; improving nutritional levels, strengthening agriculture, and increasing economic benefits. President George W. Bush and Barrack Obama’s leadership saw increasing participation. Between 2000 and 2006, the number of participants increased to 26 million individuals. By 2009, the number of participants was 48 million. This explosive growth has raised concerns about eligibility determination. As the number of participants swells, the consumption of revenue increases as well.

Analyze whether cost of the intervention you selected as a share of GDP or the number of participants is increasing, decreasing, or varies with the state of the economy, based on the cost trend(or number of participants) since its inception or since 2000.

According to Nischan (2012), the food stamps program has been beneficial to the economy and participants. It does not strain the economy, as most proponents of SNAP funding cuts argue. SNAP generates at least $1.84 as Gross Domestic Product. Every SNAP dollar generates at least a $1.73 GDP increment. Likewise, it benefits the low-income families who need the funds most. The participants use the food stamps for the intended purpose instead of other individuals who fraudulently stash away wealth. Most importantly, it has successfully made access to fruits and vegetables easier for Americans, improving their nutrition. Thus, the program should continue to receive federal funding to maximize its benefits.

Recommend whether the program should be continued as is, discontinued, or modified based on your conclusions. Defend your recommendation.

The food stamp program should continue with little modifications. The program currently benefits millions of citizens. Today, more people can easily access food and nutritional benefits, increasing food security. Thus, the country’s future generations are secured. However, extending these benefits to other families that still grapple with food insecurity is important. Limiting the number of years a family can benefit from the program is necessary. This should encourage individuals to find employment and increase their assets significantly before the stated period lapses. The limit can be determined by the level of assets when the beneficiary begins to access food stamps. This should counter the relaxed eligibility, which is the current concern.

References

(2015). Long-Term Benefits Of The Supplemental Nutrition Assistance Program. Retrieved from https://obamawhitehouse.archives.gov/sites/whitehouse.gov/files/documents/SNAP_report_final_nonembargo.pdf

Nischan, M. (2012, July). The Economic Case for Food Stamps. The Atlantic.

Ratcliffe, C., McKernan, S.-M., Wheaton, L., & Kalish, E. (2016). The Unintended Consequences of SNAP Asset Limits. Retrieved from https://www.urban.org/sites/default/files/publication/82886/2000872-The-Unintended-Consequences-of-SNAP-Asset-Limits.pdf

Tanner, M. (2013). SNAP Failure of The Food Stamp Program Needs Reform. Policy Analysis(738). Retrieved from https://www.cato.org/sites/cato.org/files/pubs/pdf/pa738_web.pdf

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Government Intervention analysis

Analyze 1 of the following government intervention programs:

Supplemental Nutrition Assistance Program

• Countercyclical fiscal policies (countering economic disruptions such as the housing bubble and the Great Recession)
• US agriculture support programs
• Assistance for Low Income Families (choose 1)
• Housing vouchers
• Earned Income Tax Credit (including Child Tax Credit)
• Supplemental Nutrition Assistance Program (SNAP)
• Low income healthcare (choose 1)
• Medicaid (including Children’s Health Insurance Program).
• Affordable Care Act expansion
• Social insurance programs (choose 1)
• Old Age, Survivors, and Disability Insurance (OASDI)
• Medicare
• Unemployment insurance

Write a 700- to 1,050-word summary of your analysis. Identify the intervention and the market failure leading up to the intervention. Complete the following in your paper:

1. Analyze the arguments for government intervention as opposed to arguments for market-based solutions. Hint: See the information about market failures.
2. Examine who has been helped and who has been hurt by the selected government intervention.
3. Examine externalities and unintended consequences of such intervention. For example, consider whether the SNAP program and health coverage for low-income families result in higher future tax revenues because low-income children grow up healthier and produce higher incomes over their lifetimes.
4. Analyze whether cost of the intervention you selected as a share of GDP or the number of participants is increasing, decreasing, or varies with the state of the economy, based on the cost trend(or number of participants) since its inception or since 2000.
5. Analyze credible economists’ opinions on the success or failure of the intervention that you chose in achieving its objectives.
6. Recommend whether the program should be continued as is, discontinued, or modified based on your conclusions. Defend your recommendation.

Note: Use of charts and graphs is encouraged with appropriate citations. Any charts or graphs retrieved from the Federal Reserve Bank of St. Louis FRED website may only be included when the data sources used by FRED are US government sources such as the Bureau of Economic Analysis or the Bureau of Labor Statistics.

Cite at least 2 academically credible sources.

Format your assignment according to APA guidelines.