Sunday, September 9, 2012

Does Explosion in Food Stamp Spending Contribute to Higher Food Prices?

It seems whenever the government injects money into a specific industry, prices climb quickly and a bubble of some sort ensues.

We had the real estate bubble which was aided by government guaranteeing the risky loans that banks made to unqualified buyers. Likewise, we're still in the midst of an unprecedented college bubble which is inflating costs far beyond the official rate of inflation due to the government's monopoly and loose requirements on student loans. And, predictably, the mandates of the Affordable Care Act (sic) are already driving up healthcare costs even faster than quasi-monopolies were afforded before the law passed.

This government spending has, for all intents and purposes, created a false demand that would not have naturally existed in the marketplace. Could the same thing now be happening to food prices due to an infusion of government money?

As food prices are already skyrocketing from the pressures of record droughts, biofuel mandates, commodity speculation, and good old fashioned currency debasement, there is certainly enough blame to go around. But should government spending on food stamps be added to this list of culprits?

A new report from last week showed food stamps hit another record of 46.7 million recipients in June, an increase of 173,000 from the previous month. That's nearly 1 in 7 Americans now dependent on government food aid.

Read more: http://www.activistpost.com/2012/09/does-explosion-in-food-stamp-spending.html#more

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