On page 119, of his budget, President Trump recommends abolition of the terrible Progress Food Aid program. This is sensible. With this program, we load up ships with good American food and send it off to poor places. When it is sold, the money is used to fund good works.
The problem — or at least one of them — is that the food is sold for less than it costs the government. There’s a 42 percent, on average, loss built into the system. The world’s poor would be much better off if we simply spent the original money on good works and left the food out of it. Alternatively, we could achieve the same thing by sending 42 percent less cash.
But then, on page 129 we get the administration’s suggestions for SNAP, which we more commonly know as the food stamp program. Here’s Trump’s idea: Instead of receiving a credit on an electronic benefits card to buy food, the poor should instead be sent a box of government milk and cereal each month.
This would be a huge step backward in welfare policy, and it would be to make exactly the same mistake we want to correct by abolishing Progress Food Aid.
There are also devils in the details, of course. The most absurd idea of Trump’s food delivery proposal is that states would have to set up entire logistics divisions to distribute the food while it’s still good. Think about that — the entire country is stacked high with food distribution centers, better known as grocery stores. Government now wants to take on the task of duplicating them, when an easy, efficient alternative exists of simply giving the poor vouchers or credits to get their food from the grocery store.
Even more fundamentally, though, we know from studies that people place less value on things they are given than they do on gifts of cash. We even know how much more they value it. When food stamps are illegally traded for real money (usually not for drugs but for diapers, the most common item bought this way) it’s 50 cents cash for $1 on the card. This problem will only become worse when we start distributing food, not cards to buy food. What will be the exchange rate of government-canned vegetables to diapers?
We probably should reform SNAP. The right way would be to give people cash. The wrong way is to give them food.
Shipping the edibles to people will make them poorer at higher cost to ourselves. Instead we should make them richer at less cost.
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