Why You Hatin’ on Food Stamps?
Newt Gingrich is dissin’ Democrats by trying to make them “the party of food stamps.”
“Most Americans would like to get a paycheck,” Gingrich said. “Most Americans would not like to be forced to have food stamps handed out by liberal Democrats.”
Funny thing about that “paycheck.” Kinda hard to get one when companies aren’t hiring. The Washington Post reports today that companies are not creating the jobs that opponents of social programs say they would create if we cut their taxes – even though many are sitting on record profits.
For months, companies have been sitting on the sidelines with record piles of cash, too nervous to spend. Now they’re starting to deploy some of that money – not to hire workers or build factories, but to prop up their share prices.
Sitting on these unprecedented levels of cash, U.S. companies are buying back their own stock in droves. So far this year, firms have announced they will purchase $273 billion of their own shares, more than five times as much compared with this time last year, according to Birinyi Associates, a stock market research firm. But the rise in buybacks signals that many companies are still hesitant to spend their cash on the job-generating activities that could produce economic growth.
Some companies are buying back shares partly because they don’t want to invest in developing new products or services while consumer demand remains weak, analysts said.
So, if companies are understandably concerned that the economy hasn’t fully recovered and, as a result, are not going to create jobs, what exactly are low-income and unemployed people supposed to do in the meantime?
And here’s what people probably don’t know — food stamps are good for the economy. From a January 2008 CNN story on a study conducted by economist Mark Zandi of Moody’s:
The industry research firm Moody’s Economy.com tracked the potential impact of each stimulus dollar, looking at tax rebates, tax incentives for business, food stamps and expanding unemployment benefits.
The report found that “some provide a lot of bang for the buck to the economy. Others … don’t,” said economist Mark Zandi.
In findings echoed by other economists and studies, he said the study shows the fastest way to infuse money into the economy is through expanding the food-stamp program. For every dollar spent on that program $1.73 is generated throughout the economy, he said.
To recap: food stamps help people who are poor when companies aren’t creating jobs and stimulate the economy so that…companies can feel stable enough to create jobs that people won’t need food stamps.
So food stamps are both good social policy and good economic policy. Shouldn’t we get behind them then?