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By Ezra Klein  |  July 21, 2010; 10:57 AM ET
 
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The question follows the introduction. Yesterday, Food Stamps were demonstrated to be an effective form of economic stimulus and I actually wonder if the stimulus value might be underestimated.

Consider the case where a Food Stamp recipient (let's call her Bambi) goes to the store and purchases a jar of pickles. Rather than actually taking the pickles home, Bambi makes a deal with the retailer, allowing him to keep the jar of pickles if he'll give her 25 cents on the dollar. The retailer agrees, gives Bambi the 25 cents, keeps the pickles, and ultimately resells them at a discounted price, keeping the profit. Bambi uses the money she received to buy crack, and her crack dealer uses the received funds to buy a condom and yet another jar of pickles. Everybody's happy... including the unsuspecting consumer who bought the discounted pickles sold twice by the retailer.

Now the question: leaving aside all moral arguments, is there any study that shows how much added economic stimulation results from the waste, fraud, and abuse present in the federal Food Stamp program?

Posted by: rmgregory | July 21, 2010 11:11 AM | Report abuse

How many senate filibusters/cloture votes have taken place during 111th Congress?

What were the motions being filibustered and on what dates did they take place?

Posted by: bswainbank | July 21, 2010 11:28 AM | Report abuse

Whenever the latest job creation numbers are discussed, there is always a comment that "the US economy needs X number of new jobs created to keep pace with population growth." That number is typically estimated between 100k and 200k. Whether the number quoted is 120k or 150k seems to depend on who you are and which party you belong to.

Where do these numbers come from?

Posted by: Klug | July 21, 2010 11:32 AM | Report abuse

What I haven't seen in a while are the latest estimates of the magnitude of the Gulf oil disaster. How does it compare to historic oil spills in the world? Also, how are the estimates made, and what are the assumptions made?

Thank you!

Posted by: hb21 | July 21, 2010 11:36 AM | Report abuse

Another thing to consider, along the lines of rmgregory's comment:

Suppose the following:

Bambi can purchase three goods: housing, food and crack. She currently has $1,000/mo in income, to which she devote $500/mo to housing, $300/mo to food, and $200/mo to crack. Let's increase her income by giving her $100/mo in food stamps.

It's entirely possible that her utility maximizing bundle is $500/mo to housing, $300/mo to food, and $300/mo in crack. She merely has to reallocate existing food money towards crack and fill in the gap with the food stamps.

If her income is low enough, Bambi can indeed use the trading strategy in order to obtain more crack if need be, at the cost of total purchasing power.

In sum, the whole idea of food stamps is a farce. Keep it simple and just give people cash if you give them anything at all. All EBT does is make the process more complicated and expensive while keeping naive taxpayers happy as they 'know' the proceeds don't go to anything other than food.

Posted by: justin84 | July 21, 2010 11:38 AM | Report abuse

Klug,

You can find raw data here at this link, using the detailed data files. There's a lot of excess data but once you clear it out, you can have population projections by year and age.

http://www.census.gov/population/www/projections/usinterimproj/

I see the population of age 16-67 growing by about 190-200k/mo in the 2000s, 170k/mo in 2010 and 140k/mo for 2011-2013. These numbers are probably knocked down somewhat for labor force participation rates, and then probably increased some with the assumption that some in the 68+ crowd will continue to work.

The numbers cited depend on the year, data source and assumptions by whoever made the estimate. Note that some estimates tossed around could easily be quite stale.

Posted by: justin84 | July 21, 2010 11:47 AM | Report abuse

@rmg & justin84: A much more realistic scenario and certainly a much more costly kind of fraud are no-bid, cost-plus contracts, massive cost overruns, the web of govt contractors that skim money while parsing out the actual work to subcontractors, etc. which cost 10 of billions of dollars every year.

Instead you focus on some hypothetical poor person who is abusing the food stamp system for a few bucks.

I also notice the stereotyping of a SNAP recipient as a crack addict. Very subtle, one might almost not notice the classist notion that all poor people are drug addicts out to swindle the govt.

How come you guys don't take your brilliant and insightful journalistic talents over to Breibart's site where your true genius can be fully appreciated. This is just the kind of hard hitting journalism he specializes in.

@justin84: I suggest you take that giving cash idea up with republicans, since they are the folks constantly putting arcane restrictions (like not giving poor people money), about what kind of aid the government provides to the least among us.

Posted by: srw3 | July 21, 2010 11:54 AM | Report abuse

The deficit went from $161B in 2007 to $1.5T in 2009. Do you have a summary of all the increases in expenses/decreases in revenue that caused this?

Posted by: pemlewis | July 21, 2010 12:19 PM | Report abuse

rmgregory,

you saw that cnn piece too? Shameful.

And yes srw3 if you watched the piece on CNN you'd see the person they were going after first and foremost were not the recipient of the food stamps but the RETAILER. In their second wave they go after the consumer selling their food stamps to buy condoms, beer etc.


srw3,

you're right they should go after everything you suggest but they absolutely should still go after everything rmgregory and justin84 suggest as well.

Posted by: visionbrkr | July 21, 2010 12:26 PM | Report abuse

I remember the housing bubble years in the mid-2000s, and there was an impression I had that led me to say that the housing market was overheated even then, having to do with unemployment.

The theory is this: When you take out the added employment from the construction and real estate boom of the 2000s, we actually didn't add many jobs from the end of the dot-com crash. As a side effect, there was also increased spending and employment in the homeland security sector.

Is there any way to break out the "extra" jobs in the construction, real estate and finance sectors (this would include increased employment at Home Depot, Lowes and similar stores) along with lingering U6 unemployment through the 2000s? Seeing increases based on Homeland Security spending might be useful, but it almost guaranteed had less of an impact than the construction and real estate spending and employment.

Posted by: khadjair | July 21, 2010 12:34 PM | Report abuse

Can you explain what the "retirement age" means for Social Security?

If I understand Social Security correctly, people can choose when to retire and start receiving benefits, and the amount they receive is based on the age when they retire according to an actuarial formula. So what, specifically, depends on the fact that 67 is the current retirement age? What exactly would happen differently if the retirement age gets changed?

Posted by: vince432 | July 21, 2010 12:38 PM | Report abuse

@justin84: That's really helpful. Thanks.

Posted by: Klug | July 21, 2010 1:14 PM | Report abuse

"@rmg & justin84: A much more realistic scenario and certainly a much more costly kind of fraud are no-bid, cost-plus contracts, massive cost overruns, the web of govt contractors that skim money while parsing out the actual work to subcontractors, etc. which cost 10 of billions of dollars every year."

Srw3, I oppose wasting money. I'm in agreement here.

"I also notice the stereotyping of a SNAP recipient as a crack addict. Very subtle, one might almost not notice the classist notion that all poor people are drug addicts out to swindle the govt."

My point is that if someone really wants to buy something other than food using the purchasing power from food stamps, they will buy something other than food. I took crack from rmgregory's comment as crack is something most people don't want recipients to buy. I don't care if people in bad situations want to spend their limited resources other than as I would direct. As you say, most of the problem is elsewhere.

Posted by: justin84 | July 21, 2010 1:29 PM | Report abuse

@visionbrkr: I just read rmg's post and I think I caught the implication correctly.

Poor people are portrayed as evil drug addicts that are out to swindle the govt in the post. How can you read rmg's post and reach any other conclusion?

rmg didn't reference any CNN story in the post.

Well given limited resources (which I assume you approve of as a small govt person), what should have the priority, low level SNAP fraud or massively more expensive (to the govt) and systemic fraud in govt contracting? Don't all these things come down to priorities? This all comes down to the basic and long standing repiglican meme that those damm poor (brown) people are living high of the hog like cadallic driving welfare queens on the benefits we provide them. Since republicans believe in biblical law, Isn't there something in the Bible about removing the log in one's own eye (that would be corporate welfare for republicans) before removing the mote in your companions eye (problems with allocating aid to the poorest among us).

Its like IRS auditing...Do you spend your time auditing folks making 50K/yr for $500 in errors or someone making 50,000K/ year for 5,000K in "errors" (probably they are intentional since the 50,000K person has a raft of tax lawyers doing his filing)?

Posted by: srw3 | July 21, 2010 1:36 PM | Report abuse

I'm wondering if there are any statistics on the percentage of conservatives who choose to focus their primordial angst on lowly, wacked-out drug addicts compared to the percentage of liberals who choose to focus theirs on people who actually have money and power.

Posted by: slag | July 21, 2010 1:44 PM | Report abuse

i think it's important to note -- even at this late date -- R hypocrisy on health reform. Specifically, on death panels. The bottom line is that Sen Isakson proposed the most far reaching federal legislation on end of life planning. As i've emailed ezra about before, isakson's amdt #1 to the HELP bill during markup was much more extensive -- of a completely different character, really -- than what was the house bill, or ANYTHING that Ds have proposed in this area. To be clear -- Ds were death-mongered based on a provision in the bill that allowed medicare to reimburse docs for time spent talking to beneficiaries about living wills/advance directives.

In stark contrast, the original version of Isakson #1 would have made having an advance directive a PREREQUISITE to getting medicare benefits. to repeat -- if i'm 65, if isakson amdt #1 had passed, i can't get medicare if i don't fill out an adv directive.

It's right here in the markup video at 11:23

http://www.c-span.org/Watch/Media/2009/06/18/HP/A/19888/Senate+HELP+Cmte+Markup+of+Health+Care+Legislation+Day+2.aspx

so as you'll see, Ds objected, isakson argued on behalf of his original amdt, then behind the scenes they worked out a compromise and isakson agreed to a much watered down version. Ezra Klein covers the watered down version here (http://voices.washingtonpost.com/ezra-klein/2009/08/more_on_isakson_and_end-of-lif.html) but the part he misses is that the isakson amdt that was eventually passed (and to which he links in this post) was modified -- his original amdt is much more draconian.

and whether or not you agree with it, the fact remains that the most coercive legislation involving end of life issues and advance directives was an amdt to the HELP reform bill -- by a republican.

Posted by: emk1975 | July 21, 2010 2:29 PM | Report abuse

@pemlewis : Mostly the difference is the result of Bush keeping the Afghan and Iraq invasions off budget, obfuscating hundreds of billions of spending from showing up in the deficit. The other big driver of the difference is the stimulus ~800 billion, that is (unfortunately) a one time expense.

Posted by: srw3 | July 21, 2010 3:07 PM | Report abuse

"Its like IRS auditing...Do you spend your time auditing folks making 50K/yr for $500 in errors or someone making 50,000K/ year for 5,000K in "errors" (probably they are intentional since the 50,000K person has a raft of tax lawyers doing his filing)?"

Srw3, I think you simplify taxes so that the guy pulling in $50k/yr doesn't make any errors and go after evasion by the big guys.

Likewise, just make assistance to the poor cash and at the same time cut waste elsewhere.

Posted by: justin84 | July 21, 2010 3:19 PM | Report abuse

@j84: Sure, in a world where government has unlimited resources and time, go after both, but where should the emphasis be? What should get the priority given limited resources, low level small change problems with food assistance or massive contracting fraud costing 10 of billions? It seems like a pretty easy answer...

Again, it was republicans that put the arcane restrictions on how assistance to the poor is structureed, so take your paying cash idea to them.

On the tax code, easier and simpler is definitely better, AS LONG AS THE SIMPLIFICATION MAKES THE TAX SYSTEM MORE PROGRESSIVE! Most "tax reform" proposals make the system more regressive (flat tax, consumption tax, etc.)

Posted by: srw3 | July 21, 2010 3:51 PM | Report abuse

Well given limited resources (which I assume you approve of as a small govt person), what should have the priority, low level SNAP fraud or massively more expensive (to the govt) and systemic fraud in govt contracting? Don't all these things come down to priorities? This all comes down to the basic and long standing repiglican meme that those damm poor (brown) people are living high of the hog like cadallic driving welfare queens on the benefits we provide them.

Posted by: srw3 | July 21, 2010 1:36 PM | Report abuse


You see that's where you lose me. I'm for small government but the size of the fraud detection is WAY TOO SMALL. Go ahead and increase that (IMO) to reasonable levels. Go after ALL fraud. Sure they should focus on the biggest fish. That includes UNION fraud btw.

You wouldn't be painting ALL Republicans and in turn I assume me as a racist would you? that's right out of Spencer Ackerman's playbook, no?

Posted by: visionbrkr | July 21, 2010 4:18 PM | Report abuse

Two questions on the ACA.
1) Section 9003(f) is being sited by my insurance provider as reason to limit the purchase of over the counter drugs with my FSA. As far as I can tell this is a legit reading of this section. Can you tell me when that will take effect and why that provision was put in the bill?
2) We were told that we "dodged a bullet" in that our insurance renews for the year before 9/23 when some provisions go into effect and would raise our premiums. I can't find anything that starts on 9/23 that will increase premiums, can you tell me what they are talking about?

Posted by: chrynoble | July 22, 2010 1:02 PM | Report abuse

Chrynoble,

Things like the dep to age 26 is an example of what they are talking about. its nice that dependents can stay covered now but that coverage increases cost. Some insurers that i've spoken to give it about 1.5-2% increase.

here's a good link that details your first point.

http://www.shrm.org/LegalIssues/FederalResources/Pages/ReformFlexibleBenefits.aspx


Its simply is a revenue generator no matter how small it may seem.

Posted by: visionbrkr | July 22, 2010 9:37 PM | Report abuse

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