As the economy has weakened, getting lower-income families food stamps and other payments that they can spend quickly emerged as a key way to stimulate the economy. FRAC believes that putting more resources quickly into the hands of the people most likely to turn around and spend it can both boost the economy and cushion the hardships on vulnerable people who face a constant struggle against hunger.
Just one dollar of SNAP/Food Stamp benefits creates a “ripple effect” through the economy. A study by industry research firm Moody’s Economy.com looked at the potential impact of each stimulus dollar. According to economist Mark Zandi, “some provide a lot of bang for the buck to the economy. Others … don’t.” Zandi said that the study shows the fastest way to infuse money into the economy is through expanding the SNAP/Food Stamp program. “If someone who is literally living paycheck to paycheck gets an extra dollar, it’s very likely that they will spend that dollar immediately on whatever they need – groceries, to pay the telephone bill, to pay the electric bill,” he said. That single dollar helps to pay the salaries of the grocery clerks, pays the truckers who haul the food and produce cross-country, and finally goes to the farmer who grows the crops.
Plus, USDA research shows that each $5 of federal SNAP/Food Stamp benefits generates nearly twice that in economic activity.
In 2009, FRAC led the charge to include a SNAP/Food Stamp boost in the American Recovery and Reinvestment Act of 2009 (ARRA). The Act: