Why do we even have food stamps and farm support? Here’s a brief, over-simplified history. During the Great Depression, with unemployment at historic levels and mom-and-pop farms failing at a high rate (not enough income from not enough sales of produce to an unemployed population), Franklin Roosevelt pushed through Congress a pair of bills that had negative impacts on the unemployed and on those farms (and that prolonged the Depression, but that’s for a different post).
Those two bills were wage controls in the form of a mandated minimum wage that an employer could pay—or that a prospective employee could accept—and a mandated minimum price at which a farmer was allowed to sell his produce (thus, farm supports). Think about that: in a time of enormous unemployment (Obama’s 10% unemployment in 2009 was full employment, and today’s 7.2% is Phat City compared to Depression levels), Americans were priced out of the labor market. And at the time those Americans couldn’t get work, they had no income from which to pay those artificially inflated farm prices.
Roosevelt thought about that, and the light went off in his head: he pushed through Congress a mechanism for giving subsidies to the poor (read: unemployed) so they could afford to buy food (thus, food stamps). (It didn’t occur to this Progressive to rescind his minimum wage and price support programs so the markets could clear, folks could get work, and they could buy their own food.)
That’s the long and short of it: food stamps and farm supports are Depression-era attempts fix a failing economy. Today, Americans pay over $14 billion annually in the form of farm support tax money transfers, and we pay nearly $80 billion per year in the form of food stamp tax money transfers (to a near-record 47 million Americans).
What to do about this? Much has been made, especially by conservatives and by Conservatives, of States’ Rights—the 10th Amendment, and all that. What too often gets overlooked, though, is the dual of that: States’ Obligations. The States should be taking care of themselves on this, not taking money from the taxpayers of other States’ citizens.
My solution is in two parts. One part is to take all money the Feds currently send to the States for farm support and food stamps and convert the funds to block grants, making the year of conversion the baseline year. Every year after that, reduce the size of each block grant by 10% (let’s say) of the baseline amount until the money being sent to each state for each program is $0. This gradual, but steady, forced reduction gives the States time to break their addiction to OPM and to adapt to relying solely on internal State funds for what are essentially internal State problems. Aside from that, the good citizens of nearly bankrupt New York or nearly bankrupt Illinois have no business being forced to send their tax money to a nearly bankrupt California or a flush Texas.
The other part is to get rid of the ethanol mandates. American refineries are required by the EPA to blend over 18 billion gallons of ethanol into their gasoline. The primary source of that ethanol is corn, and as recently as 2011, 40% of US corn production went to ethanol rather than to food. That elevates the price of a broad range of food, and not just corn-based food, at that. Food that eats corn—beef and chickens, for instance, and the eggs from corn-fed chickens, get elevated prices from that diversion. It spreads further: the prices of corn substitutes, like wheat, soya beans, and so on, are also elevated by this diversion. The States’ problems funding their own food stamp programs (to the extent any of these programs persist when the States discover they can’t fund them with OPM) will be greatly reduced by the increase in food affordability due to the elimination of this pernicious mandate.