> While the value of the balance wasn’t literally cash, it was equivalent because I was spending at least that much on groceries anyway. You can also carry a balance forward from month-to-month so there’s never a need to spend it down wastefully. It’s only about $100/person/month so it’s never too much for just food.
This is kind of the point. In all the cases where the person is spending that amount on eligible food regardless, it's already equivalent to cash so it might as well be cash without the administrative overhead. They'll spend the food stamps on food and the cash they would have spent on food on whatever they want.
The only time it matters is when the person wouldn't be spending that much, i.e. they have an alternative source of food that doesn't take food stamps. In which case it only produces inefficiency. If you're content to eat free stale bagels and ugly produce every day so you can use the money for something else, you can't without breaking the law. Nor does it help you to try to stretch the money past the limit of the benefit amount.
So people go to the grocery store and spend all the money, because a fresh bagel tastes better than a stale one if you have to spend the money on that. And if you have a consistent way to get by on $80/month in groceries, accumulating an extra $20/month in food stamp balance every month still doesn't put gas in your car.
The same dynamic plays out in all the other assistance programs. There is money for low income housing assistance, but the natural thing to do there is to get together with multiple other hard off people, pool your resources and share housing. Which is not allowed. The programs generally prohibit methods of improving efficiency or stretching money.
Even if you're dead set on not letting people spend the money on vices, why is there a whitelist instead of a blacklist? You can't spend assistance money on alcohol or cigarettes, fine. But if there is food assistance and housing assistance then why can't you spend excess food money on housing or excess housing money on food? Why is there a ban on business cards and brake pads?