Yes, We Could Be Having A Serious Deficit Reduction Discussion?

At some point in the ongoing discussion about federal debts and budget deficits everyone needs to get serious.  Serious, that is, about doing that which will reduce our federal deficit spending.  Really serious, not as in “let’s wave a Debt Crisis Flag every three months to advance an agenda including the privatization of Social Security and the voucherization of the Medicare program.”

Let’s start with the obvious.  Social Security doesn’t add a dime to the national debt.  If the words of a progressive blogger won’t suffice, how about listening to former President Ronald Reagan?  (video here)  So, discussing “reforms” to the self funded Social Security program as a means to reduce the national debt is extraneous to any serious deficit reduction discussion.

One way to approach the privatization of Social Security is to change the frame of reference, such as altering the connotation of “entitlement” from some earned benefit to which we are entitled because we paid for it, to one which has a tinge of “welfare” about it.  Social Security is not a welfare program — it is an earned benefit.  People who have paid into it all their working lives have every right to expect to be getting something back.  Social Security is not a retirement program.  It is a program which seeks to prevent abject poverty for elders.   Nothing in the Social Security program prevents anyone from maintaining a self-contributory retirement account of any shape or form.   Indeed, the benefits from Social Security are low enough that retirement to the Gated Golf Paradise Of Your Choice can only happen if you have a self-contributory retirement savings program. Anyone suggesting that “entitlements” such as Social Security “have to be reformed” to ease the burden on the federal debt (1) doesn’t have a clue what they are talking about, and (2) is regurgitating anti-safety net talking points from radicals who want to privatize all retirement income programs to the benefit of Wall Street investment firms.

Medicare does have some issues.  The first, and most readily apparent, is that the Medicare Part D (prescription drug) segment is, and always has been, underfunded.  However, the really big monster under the Medicare bed is the increasing cost of health care in America.  When private health care corporations started buying up religious organization/private, state, and locally supported hospitals the profit motive surged in the sector.  Health care must now generate a profit.  Savings, which were once achieved for the purpose of reducing costs for local tax payers or donors to religiously based institutions, now accrue to the corporate bottom line — not to taxpayers, donors, or patients.

The second factor is technology.  We do have the best medical treatment providers in the world.  However, best often translates into “most expensive.” We have all manner of devices and gadgets and equipment and gear to save or sustain lives.  Our hospitals take it as their mission to save or sustain life, which is all well and good until the emotional meets the economical.  There are “death panels” in this country, but they aren’t governmental — they are familial, with families making ‘end of life’ decisions which horrifically in some instances are based on what the family can afford.   Frankly speaking, we don’t do a very good job of educating our citizens about advance directives.  Some conservatives set up a howl when they noticed the Affordable Care Act provided for paying physicians or other medical professionals who provided ‘end of life’ counseling for their patients — however, a little counseling might go a long way toward reducing the anxiety of hospital personnel and the trepidations of family members.  It could also provide some savings in the long run.

Returning to the Big Problem — the Medicare Part D component; we knew in 2003 that the Part D segment would  cost approximately $534 billion.  [Foster pdf] Simply put, “the drug benefit had no dedicated financing, no offsets and no revenue-raisers; 100% of the cost simply added to the federal budget deficit,..” [Forbes]  The part about “dedicated financing” is important.  While the Social Security trust funds have dedicated financing (payroll taxes) there were no provisions to increase the revenues available to finance the Part D enhancement.   There is something unappealingly ironic about the current GOP insistence on “entitlement reform” because “Medicare is broken,” when it was the GOP majority in 2003 that Broke the Program.

Ways to ‘reform’ the Medicare program have been suggested which do not require “voucherizing” the entire thing and sending seniors back to pounding pavement in order to find affordable health insurance plans.  We could consider means testing for the prescription drug benefit.  We might take under advisement lifting the earnings cap for payroll taxes from the current $110,000 level and dedicating a portion of the revenues toward the Part D program.  We could allow the Department of Health and Human Services to negotiate for prescription drug prices the way the Veterans Administration bargains for prescription drugs for VA hospitals and clinics.

If we are REALLY REALLY SERIOUS about ‘reforming’ Medicare then it would be helpful to get past the silly voucherization proposals, referred to as “structural reform” in Speaker Boehner’s response to the President, [Boehner pdf]  and get to the core of what makes health care expensive — we could talk about health care cost containment, dedicated financing for Medicare, and lifting the earnings cap.   We might also want to take a deep breath and see if the Affordable Care Act’s provisions, such as eliminating tax payer subsidies for profitable private Medicare Advantage insurance policies, could achieve some savings over the next decade.

However, it’s getting relatively obvious that the Republicans aren’t terribly serious about deficit (debt) reduction when their offers are strictly ideological (privatize and voucherize) and the proposals don’t address the monster of their own creation — the lack of financing for Medicare Part D.

Buzz Words and Generalities.   Speaker Boehner is offering (pdf) “pro-growth tax reform that closes loopholes and deductions while lowering rates.”   This phrasing is coming perilously close to the older verbiage: Waste, Fraud, and Abuse.  As if we could make up any gaps in program funding by simply cutting out the WFA.  Most anti-tax advocates cite the WFA as some massive potential figure which if reduced could cure all our fiscal woes.  When pressed to provide total figures associated with the largely mythical WFA these advocates provide outlier examples of welfare fraud, some particularly egregious Pentagon payments to contractors, and perhaps a bit of information from Internet e-mail chain letters.  The WFA numbers have yet to yield up the level of financing needed to close budget gaps in the Pentagon or any other government activity.

The arithmetic from “loopholes and deductions” doesn’t add up either.  The same sort of fantastical thinking is required to equate the WFA savings and the L&D revenues.  These mythological creatures are based on the same gossamer upon which anti-tax advocates conjure up the notion that an inordinate amount of the U.S. budget is allocated to foreign aid.  The average American has come to believe that foreign aid takes up 10% of the federal budget, when if fact it consumes only 1%. [NYM]

The Republicans also appear to be consuming their own rhetoric on savings associated with reductions in federal employee compensation.

“Cutting pensions and benefits for government workers is popular, but once again most Americans overestimate how much that costs the government. On average, Americans think the federal government spent 10 percent of its 2010 budget on pensions and retiree benefits; the OMB figures indicate the real number is about 3.5 percent.” [CNN]

The moral of this story is that if the amounts of spending on pensions and benefits, or the amounts that can be retrieved by closing loopholes and eliminating deductions, are grossly inflated, then the resulting policy and budget decisions will be widely off the mark.

Unfortunately, the same type of ideologically based proposals which are the core of Speaker Boehner’s “structural reforms” i.e. voucherization and privatization of Medicare appear to inform his suggestions about federal employee compensation, and another favorite GOP target, SNAP (food stamps.)

The program is already under assault from all sides, considering the appropriations being entertained in the agriculture bill.

The Senate’s version of the farm bill would reduce overall funding by $23 billion, with a reduction in food stamps of $4.5 billion over five years. The House Agriculture Committee is proposing to cut funding by $35 billion — with nearly half the overall cut coming from reductions in food stamps by $16 billion over five years. [Atlantic]

But there’s a problem here.  Food stamps have a beneficial effect on the national economy.

“Those who believe in cutting SNAP funding as a cost-saving measure should know that food stamps boost the economy — not put a strain on it. Supporters of federal food benefits programs including President George W. Bush understood this, and proved the economic value of SNAP by sanctioning a USDA study that found that $1 in SNAP benefits generates $1.84 in gross domestic product (GDP). Mark Zandi, of Moody’s Economy.com, confirmed the economic boost in an independent study that found that every SNAP dollar spent generates $1.73 in real GDP increase. “Expanding food stamps,” the study read, “is the most effective way to prime the economy’s pump.” [Atlantic]

If the object of the game is to increase federal revenues by generating a higher GDP along the formula proposing that a growing economy produces jobs, and more jobs yield more taxable income, and more taxable income means more revenue — then the GOP has the SNAP portion of the argument exactly backwards.  They are proposing to cut a program which actually generates more economic growth.   If one seriously believes that economic growth means more revenue and hence less indebtedness, then one can’t seriously advocate cutting programs which elevate levels of economic growth.

All Pain and No Gain.  The two sides don’t seem to be speaking to the same fiscal slope, cliff, gully, whatever.  From the Republican perspective the damage to the economy might be done by The Specter of Rising Taxes.  Those legendary Job Creators — who are now seeing record corporate profits while wages continue to stagnate — might not invest, and hence there will be no economic growth.  This is fundamental Supply Side Hoax thinking.  That it has been, and still is, a hoax is demonstrated neatly by this graph from the Federal Reserve Bank of St. Louis:

The blue line represents wages, the red line corporate profits.  If corporate well being were the driver of overall economic growth and  well being then why has the blue line been trending downward since 1970?  The answer is simplicity itself: Supply Side Economics is a Hoax of the First Water.

A deficit reduction plan predicated on ideology, urban legends, misunderstandings, and economic illiteracy isn’t SERIOUS.   That conclusion further advances the argument that the Republicans aren’t really serious about debt or deficit reduction, but merely see the issue as a flag to be waved in the van of their attack on the social safety net, a banner of privatization signaling their allegiance to Tea Party politics.

What’s A Small Business?

Small businesses are defined in the eyes of the beholder.  A small business seen through the eyes of a large commercial bank any enterprise with less than $20 million revenue is “small.”   The FDIC defines a “small business loan” as one for $1 million or less. The Small Business Administration uses the FDIC definition for its reporting.   [HuffPo]  Programs for small business lending in the Treasury Department are based on different criteria.

The Treasury Department identifies criteria for a small business in two programs.  The one-shot State Small Business Credit Initiative provides for loans not exceeding $5 million to businesses with less than 500 employees. [Treasury pdf] The second program is the Small Business Lending Fund, ” Enacted into law as part of the Small Business Jobs Act of 2010 (the Jobs Act), the Small Business Lending Fund (SBLF) is a dedicated investment fund that encourages lending to small businesses by providing capital to qualified community banks¹ and community development loan funds (CDLFs) with assets of less than $10 billion. ” [Treasury]

This is the point at which the IRS definitions can be inserted because for the purposes of implementing the Small Business Jobs Act of 2010 the IRS defines a small business as including a corporation which is not publicly traded, and the owner must have  $50,000,000 or less in average annual gross receipts over the three preceding tax years. [IRS] Those who would like to plow further into these weeds should see IRS publication 334. (pdf)

Just to make matters more complicated the Small Business Administration splits out its definition of a small business into sectors.  The agency makes its determinations based on the average number of employees over the previous 12 months, or on the sales volume averaged from the previous 3 years.   A manufacturing firm can have as many as 1500 employees depending on the product, and wholesaling operations from 100 to 500.   Services are based on revenue, the maximum ranging from receipts of $2.5 to $21.5 million depending on the service; the maximum range for retailing is $5 million to $21 million; construction company receipts are a maximum of $13.5 to $17 depending on the type of construction, special trade construction receipts ‘max out’ at $7 million.  An agricultural small business may be eligible if its receipts are under $500,000 to $9 million depending on the product.

What’s the point?  One point is that both political parties are overly fond of helping Small Business — and no one appears to have determined what that means.

As demonstrated in the opening section of this post, the definition of a small business can easily range from the Bechtel Corporation company to Barney’s Barber Shop.

What matters is how policies are shaped to assist economic growth, and how they define small business operations in terms of economic expansion.   The popular notion of a small business as exemplified by Barney’s Barber Shop, Charlie’s Catering, or Delilah’s Home Designs, is  perfectly acceptable if the policy objective is to promote local economic growth.

If our objective is to encourage the manufacturing of solar panels in the United States of America, then a “small” manufacturing business employing 450 meets the criteria for receiving assistance in lines of credit and in terms of tax breaks for a small business.

If the objective is to encourage financial transactions hedging risk and other financial manipulations, then a 499 person hedge fund can be classified as a small business.

What we have not had to date is a serious public discussion of What small business enterprises we want to encourage.

If our purpose is to promote economic growth in the manufacturing sector, then our public discourse should include proposals for the development of innovative products and technologies.  Merely propounding, for example, that the Trans Pacific Partnership will help small manufacturers find export opportunities isn’t enough.  We’ll need to talk about how to promote small business sales opportunities without having the outcome hijacked by multi-national corporate behemoths who are more interested in facilitating the flow of capital than they are about whether New Tech Innovations, Inc. can find buyers.

If our purpose is to promote small contractors and sub-contractors in their sector of the economy, then we need to ask if we are encouraging such infrastructure projects as will be of interest to and are attainable for those small contractors and subcontractors.  If there is still a surplus of unsold inventory in the single family housing sector, then why promote this kind of contracting when there is a need for affordable multi-family commercial properties?   Perhaps we should be asking questions like: What will be the economic  impact be of the (Fill in the Blank) project for our local contractors and subcontractors? Instead of obsessing on the project costs?

If our purpose is to promote the efforts of retailers, then do our tax policies and other public pronouncements, benefit small family owned enterprises, or can those enterprises benefit only as a segment of a sector dominated by big box corporations?   Worse still, are we creating a system in which the big box operations are given artificial advantages as they compete with smaller family owned enterprises?  Are we supporting the customers of those grocery, clothing, and other purveyors with “automatic stabilizers’  (food stamps, unemployment insurance benefits) during periods of economic volatility or contraction?

Singing the praises of Mom and Pop companies while promoting policies which give global corporations a leg up, is neither honest nor helpful.  Lauding the efforts of small business owners in 4th of July stump speech rhetoric isn’t productive unless it is backed up with proposals to encourage investment in new economic endeavors, and solicit assistance for local business activities.

We can dream that during this campaign season of specific plans to address equally specific needs in our local economies.   Small business owners are the first to feel the volatility in an economy. They are the first to feel it and too often are the last to recover from it.  They deserve more than to be told “It will all trickle back down on them…someday,” because they may have to make payroll tomorrow.

In The Reading Room

   Information concerning the relationship of Medicare to the Patient Protection and Affordable Care Act is bountiful, albeit not always accurate or informative.   Perrspectives explains “The Return of Republican Medicare Frauds” with clarity and fact based analysis.   Perrs quotes Jackie Calmes’ article in the New York Times; and, those wanting to place the issue in a political framework will want to read Calmes’ summary of why the Medicare messaging from the Republicans has become such a muddle.

*****

Politicususa highlights a Republican provision concerning SNAP (food stamps) in the House version of the Farm Bill which is as draconian as it is nonsensical.   “The Republican plan eliminates “categorical eligibility” which means that a family living at or below the poverty line that owns a dependable car will be cut off of food assistance. According to Republicans, a dependable automobile will be figured in to the family’s income and when they are near the eligibility cut-off point, even a moderately-priced used car sends them over the limit.”   (emphasis added)   Think about this for a minute, or think back to the time in your early life when you need the car to get work and the work to keep paying for the car.

If a family doesn’t own a “dependable automobile” then they will be eligible for food stamps, thus in order to qualify for food assistance the family has to part with the means to get to work!  Precisely how this is supposed to incentivize people to find jobs escapes any logic, especially if they are required to give up the means to get TO a job in order to eat.  If one has an undefined “undependable automobile,” then must a person only be able to accept work from an employer who doesn’t care when or if he or she can show up?  Seen any of those recently?

*****

This pathological perseveration about someone receiving any form of public assistance, lest they become “dependent,” leads right wing members of Congress into such silly statements as Rep. Allen West’s comment that Social Security is a 21st century version of slavery. [Think Progress]   Rep. West seems to have missed the obvious point wherein individuals receive Social Security benefits — because they paid into the system during their working lives.

*****

Apparently pointing out that someone is very rich is now a “character assault?”   “In a statement, Romney spokesperson Andrea Saul said “The Obama campaign’s latest unfounded character assault on Mitt Romney is unseemly and disgusting.”  [WashMonthly]  ICYMI, Vanity Fair’s “Where The Money Lives” approaches being a primer on how the ultra-rich avail themselves of tax loopholes and other accounting treatments to avoid paying taxes.  Governor Romney is quite precise about it — stating he pays just what the law requires and not at dollar more.   And… about those arguments predicated on the assumption that Governor Romney can’t be blamed for any actions taken by Bain Capital since he left?

“Because of his retirement deal with Bain Capital, his finances are still deeply entangled with the private-equity firm that he founded and spun off from Bain and Co. in 1984. Though he left the firm in 1999, Romney has continued to receive large payments from it—in early June he revealed more than $2 million in new Bain income. The firm today has at least 138 funds organized in the Cayman Islands, and Romney himself has personal interests in at least 12, worth as much as $30 million, hidden behind controversial confidentiality disclaimers. Again, the Romney campaign insists he saves no tax by using them, but there is no way to check this.”

Americablog observes that Governor Romney needs to answer some basic questions about his tax returns.

*****

The Chart of the Day:  What would a graph of the Real GDP look like using data from January 1, 2009 to Q3 2012?  This:

Probably not something the Republicans are going to post on their campaign web pages?

*****

More LIBOR.  Robert Reich calls it “a mammoth violation of public trust.” [BusInsider] The Guardian (UK) reports a Barclays whistleblower alleges Bob Diamond would have to have known about the rate rigging.   The BBC reports that the Serious Fraud Office has launched a criminal investigation. From the Telegraph, “Vince Cable: Banks are throttling UK recovery,” (Cable is the UK Business Secretary.) On Friday authorities said external audits were being conducted to see if Deutsche Bank was involved in the LIBOR rigging scandal, today it’s reported two bank employees have been suspended. [Reuters]

ZeroHedge has been following the story, and has several interesting analytical posts on the subject.  Pragmatic Capitalism yawns and tells us that the LIBOR scandal doesn’t tell us anything we didn’t already know. The main bit of evidence is the fact that the LIBOR and Effective Federal Funds rates are closely aligned — which is good, BUT it’s the little spaces in which the Big money can be gleaned.   And lost.

Ripping the Safety Net: The Conservative Welfare Mythology

One of the cherished myths of conservative ideology is the comfortable welfare recipient cashing in checks which amount to “more” than a poorly paid job. This isn’t the real picture in Nevada.  Or, anywhere else for that matter.  Consider the following chart for a moment:

Life gets a little more complicated when eligibility or need calculations are added.

Liquid and non-liquid resources are evaluated to determine whether or not they are countable. Countable resources cannot exceed $2,000 per TANF household. When resources exceed this limit the case is ineligible.

“Types of countable resources are cash on hand, stocks, bonds, mortgages, deeds of trust, bank accounts, real property, etc. There are certain types or resource amounts which are not counted when determining eligibility such as:

• One automobile.
• The home, including any contiguous land, which is the usual residence of the assistance unit that the household owns or is buying.
• One burial plot for each member of the household.
• Burial funds up to $1,500 equity value for each household member
• Household goods and personal items.”

Let’s go back to the “countable resources” for a moment.  In the FAQ section the Nevada Department of Welfare describes some assets that count against eligibility or need:

“However, these are some of the items counted as assets: checking and savings accounts, Individual Retirement Accounts (IRAs), certificates of deposit, stocks and bonds. Recreational vehicles and property other than that listed above.”

Here’s the Catch 22.  One vehicle, probably needed to get to work, doesn’t count against the recipients, nor do the clothes on their backs, or the furniture and appliances, or the burial funds and plots.  Or the house with the roof over their heads.  BUT keeping these items is another matter.  While conservatives bemoan the lack of “savings” evidenced by the poorest among us, the rules of the game are rigged so that if a person does manage to put some money away for retirement, educating children, paying for medical services (like a Health Savings Account) — THEN those are countable assets which diminish the support for the family because Heaven forefend! They’d be Welfare Queens.  In short, damned if they do and damned if they don’t.

Gee, if “those people” would “just save” then they wouldn’t need public assistance, but if they are eligible for public assistance and DO save they are penalized. If, of course, they don’t save then they can get the help they need to keep the family afloat for the month.

Quite recently a Republican candidate for the presidency of the United States said he wasn’t worried about the very poor because they have a “social safety net.”  This would be former Governor Romney’s classic: “We have a safety net there. If it needs a repair, I’ll fix it,” Romney said. “We have food stamps, we have Medicaid, we have housing vouchers, we have programs to help the poor.” [HuffPo]

Yes, as we’ve seen we do have TANF. We have nutrition assistance programs.  What used to be called food stamps is now the SNAP program.  The chart for SNAP benefits looks like this:

Getting out the calculator and punching in the numbers yields an average SNAP benefit of about $4.40 per day in FY 2011. [CBPP]  The latest reports compiled by the Bureau of Labor Statistics [pdf Table 723] show food prices for FY 2010, and demonstrate rather quickly that the $4.40 isn’t going too far too fast.  Apples? $1.20 per pound. Oranges? $1.02 per pound, up from $0.62 in 2000.  Bread? $1.39/loaf, up from $0.99 in 2000.  Milk? $3.32 per gallon, up from $3.11 the year before.  Meat? Bringing home the bacon isn’t what it used to be. It was $4.06 per pound in FY 2010, up from $3.57 in 2009.

Thus far we have people living in poverty, who are admonished to be thrifty savers — but find their monthly benefits reduced (or eliminated) if they do, being asked to feed family members for $4.40 per day.

“If it needs a repair, I’ll fix it,…”

After trying mightily to get Governor Romney on record supporting the Ryan Plan the Democrats watched as the Romney campaign did it for them last December.  [WashMonthly]

And, what would the Ryan Budget Plan do to SNAP recipients?  Slash approximately $127 billion from the program for the next ten years.  [CBPP]

And more, what would the Republican Budget Plan do to TANF (Temporary Assistance to Needy Families)?  This program has already stagnated, tied as it is to block grants which in turn are linked to out-of-date levels: “basic federal TANF block grant funding has eroded substantially in inflation-adjusted terms over the years available.  The value of the TANF block grant has declined about 30 percent in real value since 1996. “  [CBPP] (emphasis added)  In Nevada, the value of TANF benefits for a single parent with three children declined by 22.7% since 1996.

Rep. Ryan was pleased to call this state of affairs an “unprecedented success.” [MC]  Here’s a picture of what he was speaking to:

Quite simply, it doesn’t do to describe the block grant TANF program as an unqualified success if it is insufficiently funded to meet the current needs of families faced with reduced circumstances, and worse still to contemplate it as the “model” for further reducing federal expenditures for SNAP.

Therefore, convinced as Governor Romney may be that the poor are secure, that ephemeral security means severely limited resources for daily living, indexed to long out of date base numbers (TANF) supposedly supplemented by SNAP funding which requires recipients to limit their expenditures for food to $4.40 per day.

Anyone with a $4.00 plastic calculator and 6th grade arithmetical skills can determine that the Romney/Ryan prescription for the social safety net is more likely to shred the net than secure it.

Eating Our Own: Food Stamps in Food Deserts

Don’t miss this insightful piece in the Las Vegas Sun, “Experiencing hunger in Las Vegas.”  The article is especially useful for those who think food stamps are a giveaway to lazy people — try feeding your family on $3.39 per day, or about $105.09 per month. It’s also time to debunk some common myths and urban legends about the food stamp program.

Myth:  Food Stamps cause obesity.   Right wing news outlets jumped on a study by a University of Maryland researcher which purported to connect the rate of obesity in the United States with food stamps.   What should have been a red flag were the researcher’s initial assumptions that (1) “In a time of mass obesity, encouraging the poor to consume more food makes no sense at all,” said the researcher, University of Maryland Professor Douglas Besharov.”  And, (2)  “Food stamps and other federal meal programs, he said, were launched at a time when hunger was a serious threat to the underprivileged. Today most of the poor have no problem getting enough to eat, according to Besharov.” [Fox]

The first and most obvious problem is that Correlation Is Not Causation.  Arguing that food stamps cause obesity is like proposing that gasoline purchases cause automobile accidents.  More credible research suggests that women participating in food stamp programs are at greater risk for obesity than men or children, and this hints at possible factors not attended to in the anti-food stamp arguments.  For example, are there genetic factors involved? Are there dissimilar levels of daily exercise?  Eating patterns?  Level of nutritional information in the home?

Another line of attack says that since food stamps can only be used for food the recipients are encouraged to purchase more groceries and therefore are at greater risk for obesity.  Stop. Think.  Expenditure doesn’t necessarily equate to Over Consumption.  There is a better explanation:

“But even if receiving food stamp benefits leads participants to spend more on food, it does not mean that the additional spending results in overconsumption and obesity. It is possible that food stamp benefits allow people to choose a different bundle of foods than they otherwise would. For example, participants may shift spending toward relatively more expensive foods that were previously out of reach (e.g., fresh meats versus canned beans or fresh fruit and vegetables instead of canned items). Or, since food stamps can be redeemed for food only in grocery stores, participation in the program may shift a household’s food spending toward foods prepared and consumed at home, as opposed to food away from home. In either case, an increase in food expenditures would not necessarily lead to overconsumption of calories or a poorer diet.”  [ERS usda]

Myth: Poor people can get plenty to eat. Lets make the same “deal” proposed by the initial article [LVSun] and make the logical assumption that food insecurity in the United States isn’t comparable to food insecurity in the Southern Sudan.  Those unwilling to make such a “deal” are in essence proposing that SNAP be available only to the 5% of Americans who, without assistance, could not put food on the table.  [TDB] To check for a bit of numerical bias, let’s rephrase that and say the advocates of profound cuts to SNAP assistance are saying that we need only provide assistance to a putative 16,500,000 people.   Now which number sounds like greater evidence for severe food insecurity in the U.S?  That 5% of our population is very severely food insecure? Or, that 16,500,000 Americans are very severely food insecure?

As the chart illustrates, there are three levels of food security definitions.  Food secure is obvious. We can drill down on other categorizations.  In general, “Food insecure” means that at some point during the year a household could not obtain enough food because of insufficient resources.  “Low food security” is defined as: “These food-insecure households obtained enough food to avoid substantially disrupting their eating patterns or reducing food intake by using a variety of coping strategies, such as eating less varied diets, participating in Federal food assistance programs, or getting emergency food from community food pantries.” [USDA]

The severity of the situation informs the Very Low categorical definition: “In these food-insecure households, normal eating patterns of one or more household members were disrupted and food intake was reduced at times during the year because they had insufficient money or other resources for food.” [USDA] In short, someone (or everyone) in the household went to bed hungry.

If 5.4% of the American population (or 17,820,000) is experiencing ‘hunger’ then it’s readily apparent that not all poor people can get “plenty to eat.”

Myth: All supermarkets are created equal.  Those comfortably ensconced in high income suburbs probably aren’t familiar with grocery stores in which you can find any kind of lettuce you want as long as it’s Iceberg.  Access to a variety of nutritious food is an important, but often overlooked factor.

Avoiding  a ‘food desert’ requires thinking in 3D:  There has to be a supermarket with a substantial offering of nutritious foods, and there has to be a way to get to it.  Of all U.S. households, 2.3 million (2.2%) live more than one mile from a supermarket, and do not have access to a vehicle to get there. Another 3.4% live within one half a mile or one mile from a market, and don’t have access to a vehicle to get there. [ERS pdf] It doesn’t help to have a grocery store in the area if you can’t get there.   However, most SNAP participants are making the effort, 86% redeem SNAP benefits at supermarkets or large grocery chain stores, which are an average of 4.9 miles from home. [ERS pdf]

Those unsure that “food deserts” exist may wish to consult the Food Environment Atlas,  Google Earth it isn’t but a couple of clicks on the interactive map will tell us that in Clark County as of 2006 there were 5,766 households with no car and with the nearest grocery over a mile away.  In Washoe County there were 1,402 families in the same straits.  Nye County had 506 families in that category, Humboldt had 152, and Elko had 302.

Perhaps if we’re serious about promoting better eating habits it might do to think equally seriously about our public transportation systems?  Or, how we  encourage the placement of full service food marketers in urban areas?

We do need to be careful that some in our current over-heated political environment don’t take satirist Jonathan Swift’s 1729 Modest Proposal too seriously: “I have been assured by a very knowing American of my acquaintance in London, that a young healthy child well nursed, is, at a year old, a most delicious nourishing and wholesome food, whether stewed, roasted, baked, or boiled; and I make no doubt that it will equally serve in a fricasie, or a ragoust. ” [Gutenberg]

 

Recommended reading:  “Food Stamps and Obesity,” Amber Waves, ERS USDA, June 2008.  Steven Cuellar, “Do food stamps cause overconsumption?” Sonoma State University, March 2003. (pdf)  FNS/USDA “Supplemental Nutrition Assistance Program, “Obesity, Poverty, and Participation,” February 2005. (pdf) VerPleog, Mancino, Lin, “Food Stamps and Obesity,” Amber Waves, ERS USDA, February 2006.  Shari Roan, “Obesity Rates in US…leveling off,” LA Times, January 17, 2012.  Drenowski & Specter, “Poverty and Obesity: The role of energy density, energy costs,” American Journal of Clinical Nutrition, January 2004.

Claudia Kalb, “Food Insecurity Rising in America,” The Daily Beast (Newsweek), August 2010.   USDA, “Food Security in the U.S. – Statistics and Graphics,” September 7, 2011.   ChildStats.gov, “America’s Children: Key National Indicators of Well Being,” Forum on Child and Family Statistics, 2011.   CDC, “Food Deserts,” feature article links.  Economic Research Service, “Access to affordable and nutritious food,” USDA, June 2009. (pdf) Chapter 5: “Food Access and Its Relationship to Food Choice,” ERS, USDA, June 2009. (pdf)  Chapter 6: The Economics of Supermarket and Grocery Store Locations,” ERS, USDA, June 2009. (pdf)  ERS Maps, “Food Environment Atlas,” USDA.