Peter Schiff: Subsidies Don’t Help Affordability

On Fat Tuesday’s episode of The Peter Schiff Show, Peter walks listeners through a simple but underappreciated truth: government subsidies distort prices and consumer behavior. He uses a recent push to limit what SNAP recipients can buy as a launching point to explain how subsidies raise costs across sectors — from junk food to college tuition to housing credit — and why those distortions contribute to policy-driven unaffordability.

He starts with a local policy fight over SNAP (Supplemental Nutrition Assistance Program) benefits and how lawmakers tried to restrict purchases to keep government dollars out of junk food sales:

Kennedy was pushing to have states no longer allow your SNAP benefits to be called food stamps, but to make it so that you can’t spend your SNAP benefits on junk food. And that’s the kind of stuff that Pepsi is selling. And that’s where they [Pepsi] cut their prices. So I think about 15 or so states went along with it. And so now people who get these SNAP benefits can’t use that money to buy, you know, chips.

Peter then points out the predictable market response when a subsidy-driven demand drop hits a company like Pepsi: prices fall. He frames this as a basic free-market mechanism and as evidence that subsidies had been allowing higher prices in the first place: