Issues in Food Assistance-Effects of Changes in Food Stamp Expenditures Across the U.S. Economy

by Kenneth Hanson and Elise Golan

The Food Stamp Program (FSP) provides assistance to more households during recessions and to fewer households during times of economic expansion. These changes in FSP expenditures can have stabilizing effects on the economy, stimulating economic activity during recessions and slowing demand during expansions. This issues brief shows that the FSP provides an economic stimulus during recessions only if the Government funds the increase in program expenditures through emergency financing, rather than through increased taxes or other budget-neutral means.

Keywords: Food Stamp Program expenditures, Food Stamp Program linkages to the farm sector, input-output multiplier, countercyclical government programs, automatic stabilizer, Budget Enforcement Act

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