USDA has strong guidelines about goods that may or may not be bought using the Supplemental Nutrition Assistance Program (SNAP), commonly referred to as food stamp. For details, see the guidelines at https://www.fns.usda.gov/snap/eligible-food-items.
CBS News recently reported that tens of millions of people are the risk of getting their SNAP assistance getting reduced. You can read that story at https://www.cbsnews.com/news/food-stamps-snap-benefits-cut-in-32-states-emergency-allotments-march-2023/.
Some critics argue that SNAP benefits encourage the consumption of Sugar-Sweetened Beverages that are linked to obesity, diabetes, heart disease etc. and cutting SNAP benefits will reduce the consumption of such unhealthy beverages by forcing people to make a more healthy and inexpensive choice like plain water. They believe reduced SNAP benefits might reduce population obesity, diabetes, heart diseases, etc. USDA is quite aware of the many nuances of the conversation, and for more on USDA’s summary of the emerging knowledge in this field, read https://www.ers.usda.gov/amber-waves/2015/march/restricting-sugar-sweetened-beverages-from-snap-purchases-not-likely-to-lower-consumption.
However, supporters of SNAP argue that SNAP is linked with improved health outcomes and lower health care costs, and you can read all about their position by reading the article located at https://www.cbpp.org/research/food-assistance/snap-is-linked-with-improved-health-outcomes-and-lower-health-care-costs.
Imagine that your Senator hires you as an economic policy consultant. She is considering authoring a bill replacing the SNAP program with direct cash transfers. She argues that Sugar-Sweetened Beverages are inferior goods anyway, and an increase in income (via direct cash transfer) will reduce their consumption. But she is worried that direct cash transfers might lead to increased consumption of some competing goods like alcohol, fruit juices, and vegetable juices which may not be health promoting either.
How would you advise your Senator? (For a comprehensive answer, focus on the ideas of normal good, inferior goods, complements, and substitutes).