Some 42 million people will miss food assistance payments this weekend due to the Democratic Party‘s federal government shutdown. There is no reason for this to happen. Senate Republicans have voted to prevent it more than a dozen times. They have also always been willing to discuss extending expiring Affordable Care Act bonus subsidies in exchange for reforms to the program.
But this shutdown isn’t really about making healthcare insurance affordable. It’s about Senate Minority Leader Chuck Schumer’s (D-NY) inability to offer coherent or effective opposition to President Donald Trump, and the need that arose from this failure for him to show his activist base that he is fighting. If millions of people go hungry, Schumer may conclude that showtime is over. Although it must be said that if food stamps are not paid out, no one can seriously believe that 42 million people will go hungry.
As the shutdown continues to drain funds from the Supplemental Nutrition Assistance Program, one Democratic argument in support of SNAP deserves special attention for its absurdity. Gov. Tim Walz (D-MN), the man former Vice President Kamala Harris chose to be her White House running mate last year, posted this on social media: “Every $1 invested in SNAP generates $1.80 in economic activity. It’s not about the money, Trump just wants Americans to go hungry.”
This statement, from a man who certainly does not look like he ever went hungry, is ludicrously false. If every $1 spent by the federal government on food stamps generated $1.80 of economic activity, the federal government could borrow and spend its way out of debt to infinite prosperity. That hasn’t happened, as we already know, and many succeeding generations will come to find out. Instead, former President Joe Biden’s massive spending spree led to generationally high inflation, causing the real wages of workers to fall. It was an economic disaster.
So, where did Walz’s absurd claim come from? It came from former President Barack Obama, of course, than whom no politician of the past generation has been so smoothly plausible and so wrong on nearly every issue.
After the 2008 financial crisis, the Department of Agriculture produced an economic model showing that for every $1 spent by the federal government on SNAP benefits, the U.S. economy grew by $1.79. The macroeconomic theory behind this magic is that during a recession, people spend less money than they did before because they have less, which means businesses have unused factories and unemployed workers doing nothing. By giving consumers more money to spend, the theory suggests, there will be increased economic activity, allowing businesses to ramp up production without raising prices, and new income will circulate throughout the economy.
The SNAP multiplier theory rests on an oversimplification of economics. America is no one giant widget factory that can instantly produce more goods whenever Washington, D.C., hands out cash. Government spending doesn’t create new wealth; it merely reallocates resources from the private sector to politically favored uses. Every dollar taxed or borrowed to fund SNAP is a dollar that can’t be invested in future productivity. The Keynesian model overlooks incentives, entrepreneurship, and capital formation — the real drivers of growth — and assumes that bureaucrats can outsmart the millions of individual choices that make markets efficient.
But even assuming, for the sake of debate, that the Keynesian model is correct, it works only during a recession, when factories supposedly sit idle. We are not currently in a recession. There is no multiplier. Walz appears to think government spending always magically increases GDP.
His governance of Minnesota shows it. Public sector spending has grown by more than 200% since Walz became governor, rising from $20.5 billion in 2018 to $69.7 billion today. That spending was driven by huge increases in healthcare spending, including free care for illegal immigrants and free meals for all Minnesota students.
According to Walz, with all this government spending, Minnesota’s economy should be booming! But it is not. It is underperforming other states. Since Walz became governor, Minnesota’s real GDP has grown by 6.5% cumulatively, which is below the U.S. average of 10.2%. Meanwhile, Minnesota’s per capita income has grown 2.9% in real terms, which is less than half the U.S. rate of 4.8%.
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Walz’s faith in government spending as a perpetual motion machine of prosperity is pure fantasy. The SNAP multiplier he has cited was a one-time recession gimmick, not an economic law. Today, with inflation still high and growth lagging, pumping more borrowed money into the system won’t make Minnesotans richer; it will just make Washington, D.C., bigger.
Walz’s record proves it: massive new entitlements, sluggish growth, and falling competitiveness. The federal government cannot spend its way to wealth any more than Minnesota can tax its way to success. It’s time for leaders who understand that prosperity comes from work, savings, and investment, not welfare multipliers.