The rate of the food stamp spending increase and demand in 2020 was alarming. Excuse me, it is still quite alarming and shows severe weakness in the economy.
Over 40 million Americans rely on SNAP to sustain themselves, and that number increase if the economy does get better.
Recent data shows that more Americans are relying on the United States government through the SNAP initiative to afford food and meals. The government had to dish out over $85 billion in SNAP benefits in 2020, up from over $50 billion in 2019. Why did the government have to intervene and increase funding to this program? The simple and short answer is because the government stepped in during COVID-19 and imposed shutdowns. If the government places shutdowns, and stop people from going to work, the government becomes responsible for providing them with the essentials to live.
Of course, the essentials include food, money, rent forbearance, loan forbearance, and eviction bans, among other types of fiscal aid to the American people.
Does Food Stamp Spending Reflect Structural Economic Weakness in the United States?
The rise of the need for food stamps does not only show the economic weakness prevalent in American households due to the pandemic, but rather, it reveals something far more sinister.
Indeed, the rise of food stamp demand shows that households need quite a bit of help and shows structural economic issues that spilled over since the great financial crisis.
The COVID-19 shutdowns, which many have mixed feelings over in regard to its effectiveness, were able to shine a light on economic weakness. For instance, if one year of work can place a moderate to a substantial portion of Americans in a state requiring food stamps from the government, that shows genuine fragility.
Make no mistake, this is far from the roaring twenties. The roaring twenties do not start with transparent and hidden inflation expectations, high levels of debt, and regular government stimulus funded by debasing the national currency. There is this continuous narrative of 2021 being the start of turning point in COVID-19. But the truth is that the scars of COVID-19 still lingers and will likely linger for quite sometime.
Remember that many places in the United States are slowly re-opening. Key economic areas within Europe are still under varying stages of lockdown. As such, institutions such as the European Central Bank are still intervening and supporting economies in various ways. The more intervention in this present requires something from the people later on.
Remember that the need for intervention is never a positive sign and reflects weakness.
There is no such thing as a free lunch not even with unlimited food stamp spending