EBT:The Crutch That Keeps On Crippling

I’m hesitant to write this, because it’s a bit embarrassing. Especially considering my position on the State in general.

We are on food stamps.

There, I said it.

One of the reasons I started doing all those odd jobs and writing a series on them is that through several life choices and bad financial decisions we found ourselves in debt and falling behind. Not necessarily insurmountable amounts, but enough that food became something we skimped on.

After several years of stretching a food budget of $100/week to feed a family of seven, we decided that instead of continuing to be hungry a lot, we would rather get into the very system we hate and use the money saved to try to dig out of this debt. It wasn’t an easy choice. Once the card got to us it wasn’t easy to go into the store and face the cashier with it. Being fed with someone else’s money is embarrassing.

But we didn’t intend to stay on SNAP. We intended to improve our situation.

However, now that we have used the system, I am convinced it is not there to help people out of a bad situation. I am convinced that it is merely a system to shovel money into people’s laps whether they need it or not. It is hoped that by dumping this money into the hands of needy people the State will come out looking like a benevolent nanny, leading people out of poverty and somehow stimulatong the economy with money that it removed from the economy in the first place.

Why am I convinced of this?

Well, for one, the whole setup disincentivises work. Just like my experience with unemployment, SNAP reduces its benefits commensurate with any increase in income. That increase in income could be as simple as a few extra overtime hours, or a bonus for working harder. This adjustment is of course intended to make sure benefits only go to those who truly need it. Obviously anyone who works hard and makes more money doesn’t need the help. The obvious unintended consequence of this is that people only work as much as they have to to ensure they keep the maximum benefit. Why work more when one knows one will lose a certain amount of “free” money?

The other interesting effect of having our SNAP benefit reduced commensurate with an increase (even temporarily) in pay is that now we have less money to pay back debts and dig ourselves out of the hole. Sure, our monthly income increased by $600 for that month, but instead of having that money available for reducing debt and pulling ourselves out of the hole, we have to spend that extra on groceries instead. And since that increase was only temporary, once a normal paycheck comes in, we are back to our original $100/week budget, and square one.

SNAP is a crutch, but instead of being a crutch that helps families heal from financial difficulties, this crutch just keeps them crippled by reducing incentives to work and reducing the ability to make any headway in paying down debts.

I have a few suggestions for this program, not that anyone with any power will listen.

The first is this: hire financial advisors. Ask SNAP applicants about their debt, ask them about their income, ask them about their monthly food budget. Find out what they are going to do with the money they save on food. Are they going to pay down debt? Are they going to get an education? What are they doing with their subsidy? Help them formulate a plan to improve their situation so they can get off of the system.

The second: don’t reduce benefits because of overtime, bonuses, or temporary increases in earnings. Instead, track what the SNAP user is doing with that extra income. If they squander it, perhaps there is a reason to reduce benefits. If they are using it to better themselves, don’t knock their legs out from under them by reducing their food allowance.

Third: base benefits off of base income. This goes hand in hand with the last one. If benefits are based on base salary the incentive to work overtime remains the same.

Fourth: eliminate the system altogether. This may be the least politically correct way to handle the problem but it would force local communities to do something about hungry people in their midst. It may also create an incentive to form insurance type food programs. Members pay a monthly fee to a “food insurance” type program which pays them back a weekly stipend for times when money is tight.

Personally I long for the day when I am debt free and financially stable. We thought SNAP would help with that goal, we couldn’t have been more wrong.

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