MARKETING WORKS - FOODSTAMP UPDATE

SNAP IS AWESOME!  GET YA SOME!
The government's Supplemental Nutrition Assistance Program has been a powerful success by any measure.  While hard economic times have certainly driven participation in the program in recent years due to the "Great Recession", longer term trends suggest that the foodstamp initiative is amazingly effective at adding to its roles.

The government released June data this month and highlighted that more than 46.67 million Americans are now receiving food assistance.  The new figures show that we have erased the recent drops in participation in February and April and have pushed to new record highs.  We are 3.3% higher than a year ago and 1/2% greater than last month.

DIFFERENT WORLDS?
Stock markets would have us believe that things are better and the outlook much more positive, how can we justify equity index gains and the record participation in government food programs?  We must look only to a massive effort by the last two administrations to drive up enrollment.  The USDA under the leadership of George Bush and President Obama have emphasized participation in the program and we've even had tremendous marketing efforts on television and radio to get the word out that free food is available.  The USDA is spending almost $3 million dollars to get eligible participants to apply for the service in California, Texas, Ohio, and New York.  They are specifically targeting the elderly, working poor, unemployed, and of course.....hispanics (why this group is singled out I have no idea, as if they wouldn't fit in the other highlighted groups??).

TERRIBLE STORIES
The USDA has stepped up its efforts saying that there are more than 1 in 4 eligible people in the US that still haven't applied for the benefits they are eligible to obtain!  Take a look at the video from CNN below.  As I watch this I am simply mortified for this family that they have endured 4 years of struggle.  The frustration they must feel and the shame they obviously feel is terrible as they wouldn't agree to show their faces on camera.  As much as I can empathize with them,  I am also disturbed by the lack of creative thought and noticeable lack of initiative their entire family has shown.  I can guarantee you that the father could start his own small cleaning business or janitorial supply business and earn more than the $18,000 annually the family has made as he labors as an hourly worker.  In addition, I find it hard to believe that the wife isn't working too.

After four years, I would hope that they had improved their situation and I am sure that they do too.  I just almost believe that these "safety nets" have created a group of people that are incapable of being self-reliant and creating their own success.  Clearly they didn't have significant savings as they said they were broke immediately and clearly they have some situation that prevents them from undertaking heroic measures to address their situation (possibly some health issue?).  While I am sorry that the son cannot go to college, I am left wondering why he isn't working and contributing his earnings to his family?  The family has had food assistance, free living (not paying their mortgage), and obviously other benefits too, the question is how will they get out of this mess?  Will they just continue to hope for a corporate job, or will they endeavor to try something new?  My guess is that Obama or Romney won't be able to help someone that clearly hopes to be restored to his previous position and station in life.

SAFETY NETS ARE TRAPS - GOVERNMENTS CREATING DEPENDENCY
Instead of ramping up food program expenditures, I would rather see the government get out of the business of trying to serve more folks.  If a government program must be created, make it mandatory that recipients enter a technical job training co-operative as we continually hear that America lacks skilled labor and jobs at specialized manufacturing plants are plentiful.  I am choking as I'm writing this as it sounds like I'm advocating more government, but it seems as though it is inevitable that the government is going to spend, spend, spend, perhaps it is more reasonable to demand where they are going to allocate it.

The USDA sees lots of new candidates out there and we've seen how effective they are at using marketing to reduce the stigma associated with the lack of desire or inability to provide for basic needs for a family.  I guess we can only predict that we'll see increased role size and more than $80 Billion in annual program expenditures in the near future.  One has to wonder what is wrong with the 85% of the population that isn't using foodstamps, I'm guessing it won't be long till some are enticed to join the program.

GOATMUG

Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments athttp://www.goatmug.blogspot.com/