Without by any means endorsing every word of it, let me recommend to you Kevin Williamson’s National Review feature on poverty in Appalachia. One part that I really liked was the description of the underground market in cases of soda.
There are lots of things you can’t buy with Supplemental Nutrition Assistance Program vouchers (“food stamps”), but you can buy soda. Then you can trade the soda for cigarettes or booze or oxy or whatever. And since there are a lot of people getting SNAP benefits, the cases of soda actually circulate as a kind of ersatz currency all on their own terms.
This is the kind of thing that makes me so convinced that we should replace SNAP with cash. Whatever paternalistic goals people think they’re advancing by restricting what people can do with their SNAP benefits are not in fact being advanced. Proposals to make SNAP more paternalistic by banning the purchase of soda are further missing the point. Canned beans or whatever will become the new swapped commodity. For SNAP to help people, it has to be useful, and as long as it’s useful, you can’t eradicate the fungibility.
But here’s what using vouchers instead of cash does accomplish. It makes it much much harder to try to be as frugal as possible and save up some of your benefit money to move away to someplace where you’d have better prospects. If you save up some cash, that’ll spend in Charlotte, N.C., and it’ll spend in the gas station on route to Charlotte, N.C. Your boxes of soda keep you tied to local black markets, becoming one more thing that keeps people stuck in a place that’s never been prosperous and doesn’t have any real prospects for becoming prosperous in the foreseeable future.