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Speaker 1: And that's why I'm going to sound like a good

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Speaker 1: old nineteen eighties Republican.

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Speaker 2: We should actually try to make.

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Speaker 1: Them a little easier to work with, not a little

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Speaker 1: harder to work with.

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Speaker 3: I'm Megan Connors.

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Speaker 1: I'm justin Wilfus. This is the professor is in. Think

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Speaker 1: of this as office hours. Megan is here to ask

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Speaker 1: me your questions.

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Speaker 3: Last week, you released a video about what you called

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Speaker 3: the biggest economic story no one's talking about, and that's

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Speaker 3: the recent cuts and administrative changes to SNAP. We've got

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Speaker 3: some follow up questions and comments to discuss today, and

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Speaker 3: before we start with the questions, I just wanted to

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Speaker 3: see if there was anything that kind of stood out

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Speaker 3: to you in the comments section this week from our audience.

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Speaker 1: This is actually one of the most powerful weeks for

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Speaker 1: me reading comments. So we released a video that was

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Speaker 1: about SNAP. Some people call it food assistance food stamps,

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Speaker 1: and it wasn't questions. It was personal testimony from people

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Speaker 1: who the program had helped and people who are struggling

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Speaker 1: to get by. There are folks who remember when they

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Speaker 1: were kids. There was an elderly disabled couple who'd recently

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Speaker 1: seen their food stamp persistence cart and story after story

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Speaker 1: like that, and I've got to tell you, it's very

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Speaker 1: rare to read the comments section on the Internet these

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Speaker 1: days and feel it here in the heart quite as much.

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Speaker 2: So at one level, I just want.

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Speaker 1: To say thank you to people for sharing, and another

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Speaker 1: I'm struck how invisible the policy debate is about these issues,

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Speaker 1: and I just want to say I've seen you and

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Speaker 1: I know that Megan, I know we both worked hard

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Speaker 1: on that video, and honestly we're proud to put a

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Speaker 1: little bit of light on what I really genuinely, profoundly,

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Speaker 1: this is not a political statement. It's an economic and

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Speaker 1: it's a personal it's an ethical statement. Is one of

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Speaker 1: the biggest untold stories. People who are getting assistance of

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Speaker 1: six dollars a day from the government, four million of

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Speaker 1: them have had that assistance cut over the past year.

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Speaker 1: I feel like as a society and economists, we haven't

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Speaker 1: really noticed when we haven't told that story.

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Speaker 2: This is Harry tempted to a bit better job.

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Speaker 3: So I think a big takeaway from the episode is

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Speaker 3: that the new system for administering the benefits has become

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Speaker 3: a lot more strict, and because of that, in many states,

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Speaker 3: it's caused many more people than were even intended to

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Speaker 3: lose their benefits, people that should qualify for them even

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Speaker 3: under the new rules. And I'm wondering if you could

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Speaker 3: say a bit more about which groups of people are

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Speaker 3: most disadvantage when these sorts of administrative burdens increase.

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Speaker 1: So let me start with what the policy was meant

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Speaker 1: to do. It did things like extend work requirements so

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Speaker 1: that it used to be that prime age folks I

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Speaker 1: think it was twenty five to fifty five used to

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Speaker 1: have to be working in order to get food stamps

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Speaker 1: for more than three months over a three year period.

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Speaker 1: They've increased that all the way to age sixty four.

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Speaker 1: So there was a sense from the people who designed

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Speaker 1: the policy this was the one big, beautiful bill that

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Speaker 1: we should ask a little more from a few more groups.

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Speaker 1: Their sense of who was able to support themselves was

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Speaker 1: a little broader than previous administrations.

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Speaker 2: There's a genuine debate there. That's fine.

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Speaker 1: The thing that has actually happened is the number of

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Speaker 1: kids who are receiving food stamps has fallen by one

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Speaker 1: and a half million. The number of elderly people has fallen,

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Speaker 1: the number of disabled people has fallen. So it was

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Speaker 1: a policy that, at least on paper, was finally crafted

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Speaker 1: to sort of expand contract the group who we thought

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Speaker 1: needed special help, But actually it's contracted it across the board,

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Speaker 1: including some of those groups you might naturally think of

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Speaker 1: as being quite obviously needy. So some of this is

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Speaker 1: actually just you increase administrative burdens, and the person in

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Speaker 1: the office whose jobs to where they hit except or

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Speaker 1: reject now has a trigger finger on the reject button

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Speaker 1: that's going to be across the board.

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Speaker 2: Then there's the.

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Speaker 1: Question if you get rejected, do you appeal, do you

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Speaker 1: go back, do you bring in more paperwork, or if

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Speaker 1: the whole process becomes harder, how do you deal with it.

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Speaker 1: There's a lot of evidence that seems to suggest that

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Speaker 1: when you erect these barriers, you might erect them so

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Speaker 1: that people who don't need the barriers don't climb over them.

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Speaker 1: There's actually a a set of theories in public finance

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Speaker 1: that you want to make it a little bit painful

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Speaker 1: to get benefits, otherwise everyone will get them. Some people

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Speaker 1: might say we want to maintain dignity. That's a counter argument.

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Speaker 1: There's views on both sides there, but it turns out

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Speaker 1: that often the people who don't climb over those barriers

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Speaker 1: are people who can't. If you don't have a car,

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Speaker 1: you can't get to the office, if you are not

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Speaker 1: confident in front of government officials, and if, for instance,

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Speaker 1: you'd spent time in jail, if your family has a

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Speaker 1: check in immigration history, if you don't do well with authority,

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Speaker 1: and so in the end, what this ends up doing

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Speaker 1: is it makes life harder for the very folks who

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Speaker 1: already find thriving in our system to be difficult. And

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Speaker 1: that's why I'm going to sound like a good old

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Speaker 1: nine en eighties Republican. We should actually try to make

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Speaker 1: them a little easier to work with, not a little

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Speaker 1: harder to work with, because whenever we require you to

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Speaker 1: fill in a form, many of the folks who don't

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Speaker 1: do it, and maybe the folks who really do need

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Speaker 1: to help.

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Speaker 3: For the next couple questions, I'm going to play a

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Speaker 3: little bit of Devil's advocate here. You mentioned, you know,

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Speaker 3: or of your argument was that these benefits were helping

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Speaker 3: pay for tax cuts for the wealthy. However, we had

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Speaker 3: some people note that there were also tax cuts geared

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Speaker 3: toward the middle class and the one big beautiful bill

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Speaker 3: and that those tax cuts for the wealthy were mostly

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Speaker 3: an extension of what was already in place. How would

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Speaker 3: you respond to those claims when we can.

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Speaker 1: Found economics with politics. I think it melts our brains

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Speaker 1: a little bit. And so saying something's an extension if

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Speaker 1: something else doesn't answer the question is something a good idea?

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Speaker 2: So if I give you a couple.

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Speaker 1: Hundred billion dollars to make the world a better place,

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Speaker 1: who would you give them to?

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Speaker 2: And how?

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Speaker 1: My guess is you wouldn't say. You know who's struggling

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Speaker 1: right now is people in the highest tax brackets.

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Speaker 2: Let's reduce their tax rates.

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Speaker 1: My guess is you wouldn't say the American working class,

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Speaker 1: who've seen very little rise in reel incomes literally for

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Speaker 1: decades while everyone else is pulled ahead. We should tighten

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Speaker 1: up on their eligibility for food stamps or for health insurance.

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Speaker 1: I'm not here to preach to anyone what their ideology

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Speaker 1: should or shouldn't be. These questions of British combution fundamentally

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Speaker 1: are questions of values. I can't tell your values, and

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Speaker 1: I respect your values. What I want you to do,

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Speaker 1: then is sit down in the room and think about

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Speaker 1: what policy needs to look like in order to live

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Speaker 1: up to your values. It's not a long answer, but

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Speaker 1: when you do surveys of Americans, they typically say they

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Speaker 1: wish that the United States were more equal, not more unequal.

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Speaker 1: They typically underestimate the extent of inequality, and so they're

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Speaker 1: ignorant of the extent of inequality and they want less

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Speaker 1: of it. Which seems to suggest that funding tax cuts

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Speaker 1: for the rich out of cuts to health insurance in

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Speaker 1: food assistance moves us in the direction which if most

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Speaker 1: Americans fully understood it, they would be against.

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Speaker 3: Okay, shifting gears a little bit, you know, one of

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Speaker 3: the changes is that the states are now paying for

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Speaker 3: more of the administration of these benefits, as well as

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Speaker 3: a portion of the benefits themselves. Is there any economic

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Speaker 3: logic to this? What are the pros and cons of

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Speaker 3: that reach of having states pay part of something that

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Speaker 3: used to be covered by the federal government.

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Speaker 1: So the whole thing's run out of the Department of Agriculture.

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Speaker 2: That's weird.

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Speaker 1: The federal government used to pay for all of it,

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Speaker 1: but the federal government never actually mailed out the checks

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Speaker 1: because it decided it wasn't very good at mailing out checks.

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Speaker 1: So it subcontracted to the states. Now, that's actually really

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Speaker 1: helpful because most of us at home have thought about

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Speaker 1: subcontractors before. Sometimes when you subcontract something, the subcontractor does

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Speaker 1: a crappy job, and you don't want to keep paying

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Speaker 1: them a lot of money for doing a crappy job. Now,

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Speaker 1: if I'm talking about subcontracting finishing my basement, luckily there's

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Speaker 1: a lot of construction workers out there who I could hire.

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Speaker 1: The problem is, if I want to subcontract sending checks

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Speaker 1: to people in Missouri, there's only one Missouri state government.

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Speaker 1: There's no competition. It's not a particularly effective bureaucracy. After all,

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Speaker 1: they're a monopolist getting paid by someone else. So the

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Speaker 1: FEDS saying hey, you know what, I'm not happy with

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Speaker 1: the error rate actually seems kind of okay. I need

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Speaker 1: you to pay a little more attention and screw up

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Speaker 1: a little less often. If I'm going to be paying

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Speaker 1: for you to do this, that seems fine. The problem

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Speaker 1: here is an old one, which is when you ask

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Speaker 1: for something, you get more of that thing. And so

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Speaker 1: what they did is they said what we want to

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Speaker 1: do is reduce under payments and over payments. But they

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Speaker 1: didn't say anything at all about not giving people payments

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Speaker 1: at all. And so now the incentive at the state

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Speaker 1: level is be really careful and if you're not sure,

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Speaker 1: just boot the person off, because that's not counted as

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Speaker 1: an error. So the idea is an idea. We want

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Speaker 1: more accountability from states officers, and we want to give

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Speaker 1: them skin in the game of making mistakes. Is good,

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Speaker 1: but if you define mistakes narrowly and you leave out

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Speaker 1: big mistakes, you may actually get more of those other

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Speaker 1: kinds of mistakes.

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Speaker 2: And that's what's happened.

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Speaker 1: We're effectively kicked millions of people off food stamps by

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Speaker 1: making states more reluctant to do anything. There's actually a

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Speaker 1: separate economic problem here.

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Speaker 2: So you know, I just go there.

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Speaker 1: I think there's something useful here. I think they just

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Speaker 1: implemented it wrongly. Let me tell you a different thing

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Speaker 1: that doesn't work, which is then are asking the states

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Speaker 1: to pay for part of the actual food stamps. Here's

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Speaker 1: the problem with that. States have what's called a balanced

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Speaker 1: budget rule. Most states have to always have this revenues

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Speaker 1: ecal their expenditures. A recession hits, their revenues go down

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Speaker 1: because sales tax is lower, land tax is lower, blah

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Speaker 1: blah blah. Well, that then means they're going to have

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Speaker 1: to cut their spending. But this is exactly the moment

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Speaker 1: where more people are unemployed, more people are in need,

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Speaker 1: and more people need food stamps. So that's why we

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Speaker 1: call programs like this an automatic stabilizer. The good thing

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Speaker 1: about food stamps is when the economy goes south, need

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Speaker 1: goes up and spending goes up, and that helps stabilize

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Speaker 1: the economy. But the problem is states can't do automatic

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Speaker 1: stabilizing because they've got a balanced budget rule.

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Speaker 2: And so what this is actually going to lead to.

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Speaker 1: The more that you move food stamps to the states,

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Speaker 1: you're going to see the economy go down, need go up,

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Speaker 1: and spending go down, which is the exact opposite of

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Speaker 1: what we need and what we want. A quick word

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Speaker 3: Okay, Now I want to pan back and talk about

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Speaker 3: the bigger picture. What do you expect to be some

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Speaker 3: of the longer term economic costs and human costs of

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Speaker 3: these cuts.

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Speaker 1: I think it's as simple as holes in the safety net.

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Speaker 1: The American safety net's always been a very unusual patchwork.

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Speaker 1: Other countries have, you know, for instance, a fairly across

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Speaker 1: the board unemployment insurance system. So if you don't have

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Speaker 1: a job and you're playing by the rules, you get

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Speaker 1: enough money to get buy for as long as you

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Speaker 1: don't have a job.

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Speaker 2: It was when I was growing up in Australia.

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Speaker 1: It could be more generous, I accept, but also you

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Speaker 1: want to keep an incentive for people to really look

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Speaker 1: hard for work.

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Speaker 2: Now the United.

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Speaker 1: States has this art patch work which is inflected with

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Speaker 1: people's conflicted views about helping their neighbors. For instance, food stamps.

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Speaker 1: We don't give people money, we give them groceries or

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Speaker 1: the ability to buy groceries. Now, are you actually better

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Speaker 1: off with money or with something that buys less than

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Speaker 1: money does? Most would say people would prefer money than

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Speaker 1: food stamps, but we are less forgiving of people in

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Speaker 1: this country for being without work, and we are somewhat

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Speaker 1: paternalistic and say no, no, we will give you food

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Speaker 1: because we don't want you to spend that money on

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Speaker 1: things other than the things we want.

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Speaker 2: To give you.

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Speaker 1: To qualify for food stamps, I mean you have to.

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Speaker 1: You can only get it for three months out of

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Speaker 1: three years unless you're working. But guess what, sometimes it's

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Speaker 1: really hard to find work. It used to be that

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Speaker 1: whenever the unemployment rate rose a bit that a state

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Speaker 1: could relax on that rule, and one of the reforms

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Speaker 1: under the Trump budget is now unemployment in the state

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Speaker 1: has to hit a massive ten percent before they recognize

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Speaker 1: the reality that in some states there are more people

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Speaker 1: than jobs. And when there's more people than jobs, something's

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Speaker 1: got to give, and it's that people go without work.

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Speaker 2: If people are without.

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Speaker 1: Work, they don't always have unemployment insurance. That depends on

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Speaker 1: their employment history, it depends on the reason for their

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Speaker 1: last job separation, it depends what sector the economy they're in,

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Speaker 1: and so none of these systems are truly universal. As

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Speaker 1: a result, it's possible in this country to I think

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Speaker 1: an unconscionable degree. But that's a question of your own

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Speaker 1: ethics to fall through the safety in it and end

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Speaker 1: up literally hungry. And it's possible with this food stamp program.

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Speaker 1: And I think actually a lot of the four million

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Speaker 1: people who were just kicked off food stamps are going

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Speaker 1: to be going hungry. And that might sound dramatic or

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Speaker 1: melodramatic if you're living an upper middle class life and

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Speaker 1: hunger is not something that's naturally around you, But if so,

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Speaker 1: I would urge you to read the national statistics on

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Speaker 1: people going hungry. It is a reality for many families.

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Speaker 1: It may not be on your street, but it is

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Speaker 1: a reality. So were you to design a social safety

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Speaker 1: net from scratch that was designed more around making sure

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Speaker 1: people go what they need, it wouldn't look like this.

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Speaker 1: This is what happens as a result of a series

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Speaker 1: of compromises in a country in which we feel quite

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Speaker 1: uncomfortable with social assistance.

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Speaker 3: I think it's devastating. I think, in particular, when I

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Speaker 3: think about, you know, students, something I think about as

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Speaker 3: a teacher is like kids can't learn if their basic

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Speaker 3: needs aren't met, and so thinking of just like the

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Speaker 3: very long term consequences of that, and how that can

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Speaker 3: really affect someone's whole life trajectory. Right if kids are

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Speaker 3: coming to school hungry, or they're not making it to school,

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Speaker 3: they're not learning how to read, they're constantly concerned about

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Speaker 3: where their next meal is. Like, It's just it sets

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Speaker 3: in motion a whole series of consequences that I don't

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Speaker 3: think we've grappled with as a country.

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Speaker 1: I what I love about that, Megan, One, you have

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Speaker 1: a big hut, You'll love a big hat.

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Speaker 2: The two.

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Speaker 1: Actually, you just redefine the problem very American terms.

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Speaker 2: You defined it a question of investment. Right, give the

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Speaker 2: kid enough food and.

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Speaker 1: They can focus at school and pull themselves up by

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Speaker 1: their bootstraps. My goodness, this sounds very American now I

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Speaker 1: is far more European or Australian language. I described this

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Speaker 1: problem in terms of fairness, in terms of equity, in

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Speaker 1: terms of need, in terms of doing without.

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Speaker 3: And I agree with that as well. I want the

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Speaker 3: director tradition.

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Speaker 1: More successful than I am, which is you've also said,

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Speaker 1: hey man, there's an investment dimension to this. There's actually

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Speaker 1: reason to believe that investments in feeding kids has a

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Speaker 1: very real and important payoff fantastic.

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Speaker 2: That's a yes end. I love it.

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Speaker 3: Okay, So I guess, on that note, what do you

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Speaker 3: think can be done here? How can we as individuals,

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Speaker 3: communities politically engage citizens, either push back against some of

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Speaker 3: these policies, better inform ourselves about them, or mitigate their fallout.

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Speaker 1: So, Megan, I understand the question that I understand your

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Speaker 1: channeling it from our viewers. I also so I'm going

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Speaker 1: to stick in my lane. I am not an activist

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Speaker 1: domina educator at an economist. What I want to do

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Speaker 1: is just make sure that people understand that's it right.

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Speaker 1: You're then going to sit at home around the dinner table,

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Speaker 1: You'll take a walk with your partner, you'll meet a

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Speaker 1: friend for coffee, and you get to decide how you

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Speaker 1: feel about it. But I simply, for now my job

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Speaker 1: is just to point out did you know that four

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Speaker 1: million Americans have lost access to food assistance, including one

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Speaker 1: and a half million kids. Did you know that this

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Speaker 1: was a central part of America's economic policy over the

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Speaker 1: last twelve months. Did you know that there is need

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Speaker 1: around your need.

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Speaker 2: And your community.

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Speaker 1: I've now done my job, obviously, I wish that we

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Speaker 1: could just say it over and over again that every

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Speaker 1: economics reporter in Washington understood that this was a central

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Speaker 1: part of the modern labor market. And it's now up

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Speaker 1: to you, know, do you want to My daughter works

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Speaker 1: for a food pantry where she helps feed the homeless,

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Speaker 1: and I love and admire for that. I know folks

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Speaker 1: at home, their church may run a food pantry. Realize

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Speaker 1: that food pantry might need a little more help. Right now,

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Speaker 1: look out for the people around you. A friend who's

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Speaker 1: going through a divorce may be the person who's just

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Speaker 1: seen their income plument, and they're not going to talk

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Speaker 1: to you necessarily about food stamps because there's so much

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Speaker 1: shame engaged in America. But there's not shame. They paid taxes.

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Speaker 1: They're our brothers and our sisters, and they deserve our

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Speaker 1: love and respect and help as much as anyone else.

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Speaker 1: And you know, if this, if you work in state government,

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Speaker 1: you can think about what your state can do, and

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Speaker 1: if you vote, you can think about what you want

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Speaker 1: your federal government can do. But I am going to

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Speaker 1: say I report you decide. It's a funny headline in

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Speaker 1: these days, but I just want to equip each of

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Speaker 1: you to make the changes that you want to make

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Speaker 1: in your communities.

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Speaker 3: Thank you to our audience for your questions and especially

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Speaker 3: for sharing your stories this week. We hope you enjoyed

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Speaker 3: this episode or the professor is in you'd like Justin

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Speaker 3: to answer your question address your comment in the future,

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Speaker 3: Just leave a comment wherever you're watching or listening to

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Speaker 3: this and make sure to like and subscribe to Justin

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Speaker 3: Wookers and part of us Economics YouTube on subsac and

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Speaker 3: wherever you can find us on social media.

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Speaker 1: And until I'll see you next time, stay curious.

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Speaker 3: H