Get on the Waiting List For our No.1 Stock Suggestion!

    Two years ago, President Trump’s approval rating hit a subterranean 35%. Fast forward to today and the approval rating isn’t exactly great at 45%. Still, his approval rating is moving in the right direction. If the economy holds, he’ll probably win his reelection bid. However, a worrying trend in food stamps may unexpectedly haunt his efforts.

    At first glance, mentioning food stamps may come off as rather unusual. After all, unemployment metrics are near all-time lows and have sustained their “positive” momentum. Additionally, investor sentiment has pushed stock market valuations to all-time highs. Naturally, the usage of food stamps broadly has declined. With more people apparently finding work, the demand for government assistance declines.

    However, a Newsweek article in 2017 pointed out that while food assistance program (officially known as Supplemental Nutrition Assistance Program) usage has declined, several reasons may exist for this supposedly positive dynamic; namely, state governments have started enforcing three-month time limits on these subsidies.

    Under longstanding federal guidelines, working-age adults without children can receive food stamps for three months in three years. Immediately following the 2008 financial crisis, though, many states waived this time requirement. Now that the economy has improved (at least on paper), these same states are now instituting the original time limitations.

    This has created the illusion that more people are off government dole. In reality, the situation may be far grim than most people realize.


    Food Stamps Expose an Economic Illusion

    Under normal circumstances, a bull market, combined with a rising economy should result in reduced government assistance applications. In this environment, Republicans are more than right in criticizing food stamps as a form of addiction: government assistance creates dependency rather than promoting capitalistic drive.

    But what we’re seeing is a fresh plateau in SNAP distributions. Although the number of people using food stamps is declining, the rate is falling from almost absurd peak levels.

    For example, consider the case of Colorado SNAP benefits recipients. Prior to the wake of the 2008 financial crisis and the Great Recession, the highest number of SNAP recipients was just under 280,000 people in 1993. But the latest record is now 513,483 people, set in March 2013.

    True, over the years, Colorado has gained more residents in the past three decades. But even accounting for the population increase, the percentage gain in food stamps usage is worrying. And if this keeps up, the economy simply cannot keep up pretenses.

    For the Republicans, they better hope that if the economy collapses, it does so after November 2020.