Thursday, May 17, 2012

SYSTEMOLOGY / SNAP PHDs

My friend Amy from Slope of Hope wrote the following excellent comment that I knew someone would state, and she is right on.  So instead of posting the comment in the comment section that would never be read, I wanted to respond right here and give Amy her due.  Thanks for making a great point Amy.

AMY'S COMMENT
"I think we need to be careful about blaming "those damned bums on welfare". Most of them want to work. It's not their fault that we're in this mess. We're watching the biggest rip-off in history and many of those 46 million are victims who don't have a clue what's happening."

Amy, you are so right of course.  I don't want to paint the picture that most of these folks are not needing it.  Although with 46,000,000 on the roles, I'm going to guess at least 2% to 5% just aren't deserving like the recent story where the million dollar lottery winner was a participant or the report that 20,000 Wisconsin university students had to be kicked off last year.

My post really is lamenting that we are seriously saying that 15% of our entire nation's population is receiving benefits that help to feed themselves.  15% of people aren't earning enough to buy groceries!  That is really why I track this data each month, I'm of the mindset that this is awful and I completely understand that all of them would probably trade places with Mark Zuckerberg or even Goatmug in a heartbeat.

SYSTEMOLGY PHDS
Going deeper, I'm in fact not blaming any of the people that would actually be enticed to go get some aid and benefit for free, in fact it is a natural by-product of what they been told and sold.  I actually blame our entire system as it is removing the notion that self reliance at any cost is better than taking a hand-out.  Once the stigma is removed for these things you almost create an entire class of people willing to live at that standard of living in order to not have to do anything.  Just think about New Orleans prior to Katrina where you had literally generations of families "working the system".  Was it a good living, no, not one bit.  Could they be blamed, perhaps a bit, but it is what they knew and is where they were trapped.  Could the government system be blamed?  Heck yes, as it was easier and better for the government to give them just enough to keep them in control rather than have to face them, deal with them, teach them, and actually raise them up to be people that could stand on their own.  Essentially the entire system created entire classes of PHDs in systemology or the science of working the system to maximize benefits with little or no work.

This is the vision for government in our day, get funding, provide services, advertise services, grow the budget, provide services, and grow the program.  In this set up, SNAP or CALFresh government employees have misaligned incentives as their success depends on the programs growing bigger and bigger.  What motivation does the Director of SNAP have to get people to be self sufficient and get on to real productive lives?  None!  If they do get financially healthy, the Director of SNAP has less power, reduced funding, and less prestige.

A MINDSET SHIFT
In closing, I also lament the shift in mindset this entire country has begun to undergo.  Would you ever have imagined that a large part of the population in the USA would demand forgiving their student loans and demanding this as some right like the OWS movement?  The government and socialists and Democrats and Republicans have grown government so large that we've begun to see government and regulation as the answer to every problem.  In this country we used to do things without government, now it seems no matter how ineffective government is, we need more government to fix the problems created by the government.  Just ask Congress.


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 at http://www.goatmug.blogspot.com/

HOW MUCH DOES $6 BILLION BUY? - FOOD STAMPS


ONLY 46 MILLION ARE NEEDY, 270 MILLION TO GO!
The release of the SNAP data for February highlights that we are still near record usage for foodstamps here in the US.   The month of February panned out with the following details.

46,326,352 of your fellow citizens are using your tax dollars to feed themselves and their families.
The cost to feed these folks was right at $6.160 Billion.  The average family receives about $278 a month.

YTD, actual participation is down 27bps!! ALRIGHT!  Year-over-year usage is still up 4.8%.


SNAP DATA - http://www.fns.usda.gov/pd/34SNAPmonthly.htm




NO REASON NOT TO, GIVE ME MORE!
The improvement in the data is slight, but I am hopeful that this trend continues.  When we examine the growth of the program it is not hard to see how it came about as the economic times have been tough.  At the same time, we have forces within the system attempting to create and increase dependency  on the government.  In 2010, California renamed their foodstamp program to CALFRESH in an attempt to remove the "stigma" of receiving foodstamps.  Is it any wonder we have citizens demanding services and saying that they deserve to be taken care of?  No, we have officials that tell users of programs that it is their right to be served and cared for, that the role of government is to make sure everyone is healthy, full of food, happy, and catered to.  The notion that government is the benefactor of course is a lie.  Government simply crowds out those people that would naturally step in and care for the needy.  Government also is only the middleman that doles out services by taking funds and spewing them out in an inefficient manner.

I don't want government programs to advertise on radio, tv, and print that they have all this "free stuff" and it is very acceptable to receive benefits.  I WANT there to be a stigma associated with living for free, for receiving free food, for having medical care that someone else provides and pays for.  When there is no stigma there is not any attribution that the services are scarce and that there is an expectation that they will only be provided for a short time.  When advertisements scream that the government wants to provide these resources it suddenly conveys that there is no limit to the amount of benefit that can be received and it costs people nothing.  By having a massive entity taking in taxes and distributing services we create an impersonal situation where recipients never see the real cost of the benefits and feel as though they need to maximize the amount they receive in any way.  (Think about having an insurance company pay your medical bills - you have no real idea about the cost, so you use the benefits as much as possible).

The promotion of dependency must stop for the good of our nation, it's poor, and for the ones that are seen as the producers in our country.  If the target continues to be placed on our most successful, we can bet that the incentive to earn and gain will be less great.


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 at http://www.goatmug.blogspot.com/