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Food Assistance Program Snap Has a Ripple Effect on GDP

According to an economist from the Center for Community Solutions in Cleveland the federally funded food assistant program like SNAP, are excellent economic investments, looking at the impact they create in the national economic activity.

A survey conducted by the Centre where they analyzed over 22,000 requests for one food assistance program of Cleveland alone, reflects that food is the single most difficult challenge the majority of the people, living under or close to the poverty line, face. Around 33 percent of the residents studied, said they have had a serious issue with having money to purchase sufficient food in 2018.

Food is a basic need and agreed primary universal right for all and provision of assistance can be attributed as an investment. Fortunately there exist many public and private programs to assist households to get the required nutrition. The reduced-price lunch programs for students, meals offered to gatherings of the poor at mass lunches/ dinners, home-delivered food for seniors, the Women, Infants and Children program (WIC) for moms and babies, the Supplemental Nutrition Assistance Program (SNAP) for low-income households, and food pantries and food distribution sites are a few examples of nutrition assistance programs. Although these programs had partially achieved the desired goal and many people are said to have reported that through these programs they have received sufficient nutrition support. But there is still room for more on State to State level as a large number of Americans still face this crisis.

Challenges to SNAP & Food Assistance programs

Nonetheless, policy suggestions at the state and federal levels pressure these vital programs. For example, recently a bill before the state of Ohio legislature — House Bill 200 – aimed to reduce the ability of some unemployed state residents to receive SNAP benefits. This is in addition to the changes, already made, in the administrative procedures of the SNAP application causing hours’ long wait for telephonic inquiries and increase rate of denials due to red-tape-ism.


The current administration under President Trump is also proposing an infamous cut on the nation’s food stamp program would affect a large number of families stressed to pay for monthly groceries and ripple through other areas of the US economy including supermarkets and discounters. The administration has also suggested changing the formulae for the measurement of poverty, which would also get hundreds of thousands of Americans to lose their food assistance with zero expansion of their financial situation.

There is another proposal under consideration to have an approximately 30 percent decrease in the federal budget for SNAP. Although the proposal is not received any warm response. The proposal also suggests mounting work requirements for SNAP beneficiaries and demands states should both contribute to the program funding and agree on the level of benefits they offer. This clause could further lead to a smaller number of recipients in the program or could reduce the size of assistance.

Negative Economic Impact of SNAP cuts

  • The federal government’s SNAP funding decreases when the economy improves and fewer people depend on the assistance. It’s a state which can be termed as the “best possible outcome,” said, vice president of food assistance policy at the liberal-leaning Center on Budget and Policy Priorities.
  • According to the vice president of the center, reducing benefits at a time when people’s monetary situations are not improving could result that they are using their savings for clothing or even health to buy essential foodstuff which will have some un-estimated negative impact of the economy in general.
  • This is in addition to the lesser purchases of other materials at superstores or separate retailers.
  • An earlier report by the USDA also held that increasing SNAP benefits during economic recession starts a “multiplier process” in economic activity through improves transactions and spending. It calculated that by raising $1 billion in SNAP spending was could increase economic activity by $1.79 billion.
  • The experts believe that shifting costs partially to states would be extraordinary and likely lead to further decrease assistance as states may maintain they can’t afford to fund this food assistance during the depression or choose to cut benefits for other reasons.

How SNAP is supporting Economy

The effect of the SNAP on the national economy is studied using a general balance model and comparing initiatives of the economy from 2010 to a simulation of that economy without SNAP. In the absence of this assistance, the overall size of the economy hardly changes- only a slight increase in demand for labor. On the other hand, SNAP-eligible families would surely experience a net loss with a 5.5 percent less income while there would be approximately 1 percent more income for the ineligible households without SNAP but the output of products eligible for purchase with SNAP benefits declines approximately one billion dollars.

Assisting low-income Americans to get sufficient, nutritious diet has generated long-term benefits on the economy in more than one way. A fresh study published in the American Economic Review verified that participation in safety-net programs like SNAP increases a woman’s self-reliance in maturity. Women who had been SNAP beneficiaries proved to have superior educational attainment, better income with less reduced dependence on public assistance. On the contrary, food insecurity in the early years has also been associated with costly chronic diseases in many adults.


A majority of researchers have established a ripple effect when poor American families obtain assistance to buy groceries, it is commonly accepted that every single dollar paid in SNAP benefits raises the GDP by around$1.79. Improving millions of people’s access to nutritious food can also have additional long term public health advantages. According to the Centers for Disease Control and Prevention, a balanced and nutritious diet can help keep lead out of the human body especially in the localities where lead-poisoning has become a crisis like situation for example city of Cleveland.

When SNAP benefits are spent, multiple businesses benefit from these dollars. Despite critics’ focus on the costs of SNAP, research has verified that these dollars are amongst the best types of government incentives. SNAP spending causes local financial activity creates jobs in the agriculture and retail sectors and beyond along with helping millions of Americans to come out of poverty and hunger.

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