Profiting From More Food Stamps

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How Food Stamps Used To Look In The Good Old Days!
How Food Stamps Used To Look In The Good Old Days! | Source

Taxpayers Money Redistibuted to Banks...Again!

Food stamp usage in the United States has surged during the steep economic downturn. The number of Americans using food stamps in 2007, was 26 million. The most recent reports show that 43 million people are in the food stamp program. That's a 65% increase in less than 5 years. This is of course one of the terrible ramifications of the financial crisis and it's a losing situation for all Americans. Obviously most food stamp users are enrolled in the program because of financial hardship (although there is also sure to be some fraud too) and it's the other taxpayers who have to foot the bill. But wait, is everybody really losing from this situation? In fact there is actually a beneficiary from the rising food stamp usage. A really big beneficiary. It turns out that mega bank JP Morgan has been cashing in on this national tragedy. They have become the largest processor of food stamp transactions, with contracts in 26 states and the District of Columbia. To understand how it came to be, that JP Morgan is reaping the biggest rewards from the jump in food stamps, you would need to review some history.

Food Stamps Have Transformed Into Government Funded Debit Cards

In 1996 the U.S. Congress mandated that states begin to transition from the paper stamps to an electronic system of delivery for food stamp benefits. This new plan was fully completed in 2004 under the Bush administration. Paper food stamps or coupon booklets have been fully done away with in favor of tax payer backed food debit cards, commonly referred to as Electronic Benefit Transfer (EBT). Once this mandate took effect, the states, which are responsible for issuing food stamps, they found it to be cheaper to outsource the processing of these Electronic Benefit Transfers to JP Morgan and others. Morgan, it seems, has been able to capitalize on this new mandate more than others, though. The banks collect a fee for each food stamp case they handle. They also charge fees for various other services in relation to using the cards and processing payments. It's certainly a profitable program for the big banks who have contracts and especially JP Morgan. Let's just look at Indiana as an example. JP Morgan gets 62 to 64 cents for each case. So if you take the 296,245 cases in Indiana right now, you come to $183,673 a month. And remember that's not counting the other fees for card replacements, etc. that JP Morgan is collecting. In this video JP Morgan executive Christopher Paton describes their processing for the food stamp benefits as "A very important business for JP Morgan". He also mentions the surprising fact that 40% of people receiving food stamp benefits are employed.

Check Out The Video Here

They and other banks are also contracting to provide these same type of processing services for other government welfare programs like unemployment insurance, and Medicare.

Wall Street Profiteering From Welfare Expansion Equals Trouble!

As usual when concerning issues of ever evolving government programs, there are a number of things wrong. One of these things is the entire reasoning behind why our government decided to shift from the paper stamps. As this New York Times article explains, part of the government's strategy in changing to debit cards, was to actually Encourage as many eligible people as possible to participate. Using debit cards in the program helps to facilitate this by taking away the stigma and embarrassment that went along with using the stamps to purchase food. In an astounding part of the article it is stated that "The government has been encouraging eligible people to participate, emphasizing that the program is not welfare but nutrition assistance." Isn't that just incredible! The government was actually trying to expand the tax payer funded food stamp program on purpose for the absurd reason that they feel they need to provide nutrition assistance!? And this was before the economy even got really bad. That brings me to another problem. As the food stamp program and even the rest of the welfare system expands it turns out that big Wall Street banking powerhouses like JP Morgan now stand to profit from that expansion. Now I'm not against businesses making a profit at all, but when a bank like JP Morgan who received billions in bailout money is turning around and profiting from increased taxpayer expenses on the always expanding entitlement system..... Well there is just something seriously wrong with that picture!

Corruption, Entitlements, and Government Lunacy Are Damaging Our Country Everyday!

This of course is just one of the many situations were individual taxpayers are being hosed at the expense of more powerful and connected interests. Entitlement for various groups of people in need, privilege and welfare for corporate and banking interests, along with our misguided attempt to police planet earth, are quickly leading our country towards possible ruin. Where it ends I don't know, but I don't think it's looking very good.

Some Links To My Other Hubs On Out of Control Government

Researching And Impacting Government Using The Internet

Homeland Security Is Now Policing Afghanistan

Car Czar = Bush

How To Legally Trade On Insider Information: The Government's Secret

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Comments 10 comments

Mr Tindle profile image

Mr Tindle 5 years ago Author

T.Y. Hudson,

Yeah, the public having the power to veto legislation through a popular vote, could actually keep government in its place to some degree. Doubt that change would ever be made though.

I did write a hub in regard to how the average person can easily and efficiently use the internet to research, track, and even mobilize to change government legislative agendas. If you havn't already, you may find it useful. It's definitely an up-hill battle though.

https://hubpages.com/hub/Staying-Vigilant-About-Go...


T.Y._Hudson profile image

T.Y._Hudson 5 years ago from Pennsylvania

The only way that "more government" would appeal to me, is if that ends up meaning that, "we the people", will be given the option to vote, on every single bill or law that is passed.

Our problem usually ends up being politicians, who we elect to serve for us, and vote on these laws for us. We hardly ever see changes in the system that we actually want, much less, ones that will actually benefit us.

These days it seems like we have no clear choice on people who will represent us. None of the candidates end up being what we ultimately want to vote for. In that sense, we are forced to vote for the less of two evils.

I now understand the phrase, "Give America back to the people". It sounds like a great concept. But considering that "we the people" don't actually own America anymore, and a handful of government officials, along with a select group of rich folk, do... How on earth are we ever gonna get it back, when they make all the rules, and they tell us that THEY are in charge?


Mr Tindle profile image

Mr Tindle 5 years ago Author

T.Y. Hudson,

Thanks allot for reading and commenting. You are absolutely right, the food stamp and other welfare programs are filled with all kinds of corruption. Unfortunately this will be the very nature of any government program. Once the money becomes available, many, including corporations like JP Morgan, will line up to get a piece of the action. Also like you mention individuals who don't really need it will apply and far too often they get it. The government will never do a good job of determining who deserves what. Unfortunately many don't get this and actually think we need more government instead of less. Sad, but true!


T.Y._Hudson profile image

T.Y._Hudson 5 years ago from Pennsylvania

This article upsets me! Then again, lots of things involving the government, upset me.

Without going into one of my future hubs too deeply, there are others, who benefit from food stamps. They are the ones who lie on their applications, to receive them. I can name at least ten people who are currently doing this. I won't reveal how they get away with it, but they are all living large, on mediocre incomes, in fat houses, decked out with flat screen TV's, and surround sound. They drive brand new cars, and continuously work the system.

There are plenty of people out there, who really do need the help of welfare. The decision to give, or not to give, is completely ridiculous. More than half of the decision, is based on gender and race alone. In the end, people who actually do need it, end up getting the "good luck" pat on the back, as they are ushered out the door with nothing. The food stamp system from top to bottom, is completely corrupt. Then again, so is EVERY one of the state and government handout programs.


Mr Tindle profile image

Mr Tindle 5 years ago Author

Mrs. J.B.

Thanks for commenting. I'm glad you found the info useful.


Mrs. J. B. profile image

Mrs. J. B. 5 years ago from Southern California

WOW... This is certainly something to think about. Thanks for the info.


Mr Tindle profile image

Mr Tindle 5 years ago Author

Lxxy,

Thanks for the positive feedback. Glad you approve of the changes:). It is our responsibility to eat healthy, not the government. It's hard to stay disciplined, but I plan on writing some hubs about healthy eating and living, so stay tuned.


lxxy profile image

lxxy 5 years ago from Beneath, Between, Beyond

Hey Mr. Tindle!

I will agree, there is a "personal responsibility." I've seen some place with great, healthy food, for cheap. But I do believe that "overall" we're just not generating any sort of behaviors to really encourage a healthy appetite.

That said, it certainly isn't the government's job to do it! Not sure who is going to come along and convince me to eat more healthily (Actually, I don't eat much at all.) other than blipverts. But I don't watch enough television, for fear of having my head blown up. ;) (OK, dropping the Max Headroom.)

Anyway, appreciate your response and cleaning up the paper. Glad to see it prim and proper. ;) I may have missed some things, and still may have, but it's excellent material that needs to be read. :)


Mr Tindle profile image

Mr Tindle 5 years ago Author

Hey Lxxy,

Thanks for chiming in with your questions

I have fixed some of the errors that I overlooked when I first published. I wrote this one kind of quick. Thanks for pointing me in the right direction :).

Is everybody really losing was question meant to provoke the readers to think about who benefits from welfare expansion. I just forgot to include the all important ? mark.

Also I fixed Where.

Yes, unfortunately its not surprising that JP Morgan is benefitting along with others on Wall Street. Welfare has always carried the un-intended consequence of making the poor, poorer and the rich, richer. As far as nutrition there are many healthy options that are actually more economical than the junk that many people put into their systems (including those on welfare). Of course many fail to take the personal responsiblity and initiative to make the healthy decisions, myself included.

Anyway, thanks for commenting, its always good to have your view.


lxxy profile image

lxxy 5 years ago from Beneath, Between, Beyond

Hey Mr. Tindle!

A couple of things to note: "But wait, is everybody really losing from this situation." Is that a statement, question, or rhetorical statement? :)

Also..this sentence "It's certainly a profitable the big banks who have contracts and especially JP Morgan." what's profitable?

And lastly, "Were it ends I don't know, but I don't think it's looking very good."

Were..where? :)

Okay, now to the actual nitty. Really JP Morgan? But, more so, really USA? I'm not surprised. Nutrition is actually a very vital part to all humans, and today, if you're on the poverty line, you aren't eating healthy. Granted, better than eating *at all*, but you're not getting the required amounts of sustenance.

Then again, I doubt many of us actually are. Good food tastes horrible! Thank you for spending the time to pen this out. :)

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