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The U.S. Economic Recovery Is Still On Food Stamps

The commentary below is for the benefit of our readers from opinion makers and writers not associated with Euro Pacific. We do not guarantee the accuracy and completeness of third-party authored content. Opinions expressed are those of the writer, and may or may not reflect those held by Euro Pacific, or its CEO, Peter Schiff.
By: 
Robert Doar
October 16, 2014

Something peculiar is happening to our nation's food assistance program. The recently renamed food stamp program - now called the Supplemental Nutrition Assistance Program or SNAP - is supposed to respond to difficult economic conditions by providing financial assistance to purchase food to poor Americans. As bad times hit and more people need assistance, SNAP caseloads should go up. And as the economy strengthens, the number of SNAP recipients should decline - at least in theory.

For most of the history of the program, that is what happened. As the accompanying chart shows, from 1969 until 2003, SNAP has been very responsive to changes in the unemployment rate with the number of recipients rising as unemployment rises and declining as unemployment declines.

But that seems to have changed. As unemployment declined between 2003 and 2007, the number of SNAP recipients marched steadily higher. Then, as the Great Recession hit, the SNAP caseload went even higher. The recovery after the 2001 recession did little to interrupt SNAP growth and now-as the economy has strengthened with unemployment declining and jobs growing (although slowly)-the number of SNAP recipients has barely come off its all-time peak of 47.8 million recipients hit in December 2012. Since then, the number of SNAP recipients has only declined by 2.7% -- and oddly ticked up in the months of April and June 2014.

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Robert Doar is the Morgridge Fellow in Poverty Studies at the American Enterprise Institute. From 2007 to 2013, he was the commissioner of the New York City Human Resources Administration, the city agency responsible for the cash welfare, food stamp and Medicaid programs.

Neither Robert Doar nor the American Enterpirise Institue is affiliated with Euro Pacific Capital.

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