[FONT=times new roman, times, serif]I was watching CNBC and a union official stated that every $1 of food stamps generates $1.74 of economic activity. What do you think? [/FONT]
Was the point of the report to say that food stamp usage is good? Seams like the typical garbage argument you would hear from a Statist-Friendly channel like NBC. Wealth (or food stamps for that matter) doesn't come out of thin air. If the tax spent by the taxpayer for the food stamp was retained by the taxpayer, would the taxpayer not spend the money on something producing "economic activity"?
If this were true then the economically depressed areas where food stamp usage is more prevalent would be the most economically active and vibrant yet reality shows that this is not the case.Demand side solutions like food stamps yield a lot more economic activity than their preferred means of tax cuts.
If this were true then the economically depressed areas where food stamp usage is more prevalent would be the most economically active and vibrant yet reality shows that this is not the case.
That argument doesn't follow from any of the premises involved.
The argument is that a dollar spent on food stamps yields 1.7 ex in economic activity. Either it does or it doesn't and these things can be tracked.
I don't question that this is true, My point is that I don't believe this necessarily a good thing. If I steal a $1000 from my neighbor, and spend it, I will have caused economic activity, possibly $1700 worth. That doesnt mean it was a good thing.
The money comes from people who most likely wouldn't spend it...
This is pure fallacious reasoning. You are logically saying that everybody who pays tax would not have spent the money unless they were taxed.
If I didn't have to pay tax, I would most definitely be spending a lot of that money on goods and services I would like to purchase.
And again, doing this may be "wrong" in your ethical estimation, but that doesn't mean that the economics do not work out that way.
You would be wrong.
Demand side solutions like food stamps yield a lot more economic activity than their preferred means of tax cuts.
Understanding that you subscribe to the Keynesian school of thought brings some light to my understanding of your position.
I do not think that Demand-side solutions creates more economic activity, but I do think Food Stamps do provide a proper "Redistribution of Wealth" to people who are in need.
The only way that one dollar's worth of (food stamp purchased) food can generate $1.70 in economic activity is for the same food, when replaced onto the store shelf, to be sold for $1.70. That's a lot of inflation.
Economic 'activity' can be stimulated and food stamps are a way of temporarily redistributing existing wealth. So I'll concede the 'stimulation' factor of 1.73, not to be confused with true economic 'growth', however.
The only way that one dollar's worth of (food stamp purchased) food can generate $1.70 in economic activity is for the same food, when replaced onto the store shelf, to be sold for $1.70. That's a lot of inflation.
Nonsense! The money that is used to employ and pay the kid in the baseball cap comes from either available or expected funds. The money the kid uses to pay for the chewing gum and sunflower seeds comes from money he already has. No more, no less.Not at all. You have to remember what happens after the dollar is spent on a pack of Hebrew Nationals. The grocery store, seeing an increased demand for their products, will find it necessary to employ some kid with a baseball cap. He therefore receives a paycheck and spends it on chewing gum and sunflower seeds. This is additional economic activity that would not have taken place were it not for the food stamp. The $1.74 figure mentioned in the OP comes from economic studies designed to gauge the strength of this effect.
Nonsense! The money that is used to employ and pay the kid in the baseball cap comes from either available or expected funds. The money the kid uses to pay for the chewing gum and sunflower seeds comes from money he already has. No more, no less.