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Secretary of Agriculture Tom Vilsack talked to MSNBC yesterday and made a point about the Supplemental Nutrition Assistance Program (SNAP) program the right really didn’t like.
“I should point out that when you talk about the SNAP program, or the food stamp program, you have to recognize that it’s also an economic stimulus,” Vilsack noted. “Every dollar of SNAP benefits generates $1.84 in the economy in terms of economic activity. If people are able to buy a little bit more in the grocery store, then someone has got to stock it, shelve it, package it, process it, ship it. All of those are jobs. It’s the most direct stimulus you can get into the economy during tough times.”
The cast of “Fox & Friends” was incensed by the very idea, telling viewers as part of their coverage this morning:
GRETCHEN CARLSON: Did you know that the food stamp program in America is actually an economic stimulus? We have spent more on food stamp program [sic] in the last couple of years than ever before in American history. More and more people are, unfortunately, using this program. But the spin of this program now is that actually people who are on food stamps stimulate the economy because every dollar generates $1.84 into the economy. You buy more groceries if you’re on food stamps. Do you buy that? Do you buy that as a stimulating part of the economy? […]
BRIAN KILMEADE: So if you give people money that they didn’t earn, and you tell them to go spend it on stuff they normally couldn’t afford, everyone is better off.
ERIC BOLLING: Can I say something very quickly? Jay Carney earlier this week or last week came out and said unemployment benefits are stimulus as well. This is — this is an administration that just doesn’t get it. It’s really — it’s socialism. They’re pointing right to being socialist. The more you give, the more you stimulate? No. Sorry.
I don’t understand why Republicans don’t understand. It’s true that Jay Carney said that unemployment benefits are an effective stimulus, but that’s only because unemployment benefits are an effective stimulus.
It’s tempting to take up a collection and offer remedial economic lessons to GOP media personalities.
Food stamps are an excellent stimulus. When it comes to bang for the buck — the amount of economic activity generated for every public dollar spent — they’re arguably one of the single most effective forms of government stimulus available, and are vastly more beneficial than tax cuts.
This isn’t just some pie-in-the-sky liberal rhetoric; this has been repeatedly documented. A March analysis from the Center on Budget and Policy Priorities explained, “SNAP benefits are one of the fastest, most effective forms of economic stimulus because they get money into the economy quickly.” The director of the Congressional Budget Office agrees.
It just requires a little thought. People who receive food stamps aren’t sticking the money in a mattress or a money-market fund; they’re spending it and doing so immediately because — you guessed it — they want to eat This injects demand and capital into the economy quickly, helping the beneficiaries and stimulating the economy.
The “Fox & Friends” personalities heard the argument from Vilsack, but instead of responding with substance, they responded with incredulity — as if reality couldn’t possibly be true because it sounded weird to them.
There’s a very good reason Fox viewers seem so terribly confused so often; they get their “news” from folks who struggle with the basics of current events.

























Objective Dem on August 17, 2011 3:47 PM:
I don't know why but Vilsack left out one of the main beneficiaries of food stamps...farmers who have a larger market for their food.
taritac on August 17, 2011 3:50 PM:
Yes, it's more important that food stamps not be socialism than it is for people not to starve to death.
Do people eat more on food stamps? Yes, more than they wpuld digging through the trash. Then, yes, I guess Gretchen and friends have got a point there.
sick-n-effn-tired. on August 17, 2011 3:54 PM:
I do believe that they are all working for comedy Central , writing Jon Stewart's and Steven Colbert's scripts for them .
You couldn't make this shit up . Faux Nooze - Trying to put the Onion out of business everyday.
DJ on August 17, 2011 3:55 PM:
Reminds me of Molly Ivins recounting a Texas politician's telling a particularly stupid colleague, "I can explain it to you, but I can't understand it for you." The question is whether the simpletons on Fox and Friends are naturally stupid, or willfully obtuse.
fourlegsgood on August 17, 2011 3:56 PM:
Forget that food stamps and unemployment assistant are stimulative for a second. Serious, WTF. People have lost their jobs and many are long-term unemployed with really dire prospects of finding another.
They're broke and hungry. WE SHOULD HELP BECAUSE THEY FREAKING NEED HELP. Ahem. Sorry to shout. Can't we just say, "women and children are going hungry. WE ARE GOING TO HELP."
And yes, the fact that the two programs are effective stimulus as well is just the cherry on the cake. kaithxbai.
lou on August 17, 2011 3:57 PM:
Few of the many Republican owners of groceries would call it socialism.
And like Dick "Halliburton" Cheney, all of these FOX folks are self made men.
Grumpy on August 17, 2011 3:58 PM:
They seem to have misunderstood Vilsack's point about downstream economic multipliers. They heard him say SNAP shoppers are buying extra groceries, which means they don't need assistance and they're freeloading.
I only mention this to congratulate myself for understanding Vilsack. It's not like the Friendly Friends read this blog.
apm on August 17, 2011 4:04 PM:
I wonder if Fox & Friends has advertisers that sell food stamp eligible products?
DAY on August 17, 2011 4:07 PM:
Let's not fall into the too easy trap of calling these louts "stupid". They are not; they are crafty, devious, and dedicated to furthering the agenda of their masters.
But they are evidently not bright enough to realize that food stamps and unemployment are the ONLY things keeping the mob at bay.
("Let them eat cake" didn't work out so well, did it?")
bardgal on August 17, 2011 4:14 PM:
I'll bet most people who are on the SNAP program watch Faux.
And everyone at Faux are too stupid and out of touch with actual PEOPLE who don't make their Koch salaries to realize it.
Wonder how that went down in the heartland?
Then again, they probably know it all too well..... and will do anything to fill their audience with more self-loathing so they can blame THAT GUY for all the problems on Earth since the beginning of time.
slappy magoo on August 17, 2011 4:22 PM:
DJ, they are neither stupid or obtuse. What they are, are scumbags. Their aim is to make their viewers confused and angry, enough so to influence elections, and keep them coming back to Fox for more "news." A large chunk of their viewers are incensed that they pay taxes in the first place, let alone see it go to who (they assume) are the lazy and shiftless sponges who don't wanna work. A nation of Archie Bunkers, pissed off at the nation of Meatheads they're feeding and housing, at times paying for their medical care, without ever for once thinking about how much worse the nation would be if we DIDN'T do the kind, neighborly, "Christian" thing by helping out so many in their time of need. For Fox News this is a no-brainer: "You work hard to put food in YOUR mouths, now Barack Hussein Obama wants to take that money and pay for food to go into OTHER PEOPLE'S mouths!" Never mind that the GOP won't allow us to raise taxes any other way. Never mind that their deficit reduction demands results in more people out of work. Just be angry and all the money you're spending to feed some lazy jerk's kids, they shouldn't be allowed to have kids! (But they're not allowed to have abortions and we're not allowed to pay for their birth control, and we don't want to pay for foster care, either).
Fox News: It's all the Rage.
Bobby C on August 17, 2011 4:25 PM:
If you go a little further into the interview Pat Buchanan asks the Secretary about the program and it's costs. The Secretary answered that only 10% using food stamps are cash welfare recipients. The rest are retired people, the working poor, etc. Yes, there are many more people out there using the program, but they are using it because they have to.
kevo on August 17, 2011 4:30 PM:
It is very difficult to reason with people who lead with bigotry and emotionalism!
The entire Murdoch empire has made its dime on stirring ignorance, while spewing one-sided information immersed in suspicion, disparaged with not-so-subtle prejudice, and all rolled up into a happy-face with blonde hair!
Bertrand Gross had a term for outlets like FOXNEWS. He'd call FOX productions Friendly Fascism! -Kevo
Peter C on August 17, 2011 4:31 PM:
"ERIC BOLLING: Can I say something very quickly? Jay Carney earlier this week or last week came out and said unemployment benefits are stimulus as well. This is — this is an administration that just doesn’t get it. It’s really — it’s socialism."
No, you a$$hole, SOCIALISM would be seizing and nationalizing the farms and grocery stores and feeding all the hungry. What SNAP does is feed some of the hungry by giving them money which they give to the farmers and grocery store owners. The difference is, with SNAP, the store owners and farmers get cash whereas with socialism they get killed.
June on August 17, 2011 4:35 PM:
Sociopaths have found a home in today's GOP. That's just about all there is to it.
tamiasmin on August 17, 2011 4:37 PM:
BRIAN KILMEADE: So if you give people money that they didn’t earn, and you tell them to go spend it on stuff they normally couldn’t afford, everyone is better off.
Hey, that Brian! He got it exactly right. He just thinks it's exactly wrong.
matt on August 17, 2011 4:39 PM:
it's something that poor people use, so it must be bad for the economy. Poor people are the result of economic badness, and the way to make the economy good is to punish poor people for being poor.
Lolly on August 17, 2011 4:40 PM:
I have a relative who cut-n-pasted one of those pass it on status updates on Facebook. Don't remember the exact words, but it was something about how frustrating it was to work all day to get the money to buy food when other people just took our tax money to buy food.
The guy works at Wal Mart.
Not sure how much of Wal Mart's grocery clientele pays with food stamps; I'm guessing without those customers, Big Wally would be having big layoffs.
So, yeah. Even when you think they'd realize that it's a direct economic stimulus, they just don't.
Anonymous on August 17, 2011 4:43 PM:
What Matt said especially. And what everyone else said, too.
ERIC BOLLING: Can I say something very quickly? Jay Carney earlier this week or last week came out and said unemployment benefits are stimulus as well. This is — this is an administration that just doesn’t get it. It’s really — it’s socialism. They’re pointing right to being socialist. The more you give, the more you stimulate? No. Sorry.
Notice how cleverly he managed to work in the word "socialist." I have to give him credit for that.
As others have noted in the same vein recently, I feel like I just lost 40 IQ points reading the excerpt. Either these people are so stupid they're lucky their autonomous nervous system breathes for them--else they'd forget how--or they are brazen liars. It's one or the other.
stormskies on August 17, 2011 4:43 PM:
Within all this is the fact that the snap program, food stamps, maximum monthly allotment for a family of four is $540.00 ..... that's it. I wonder if any of the evil fucking buffoon at Fox Propaganda would like to try to feed their families on this amount of socialized generosity ?
And yet they go to their churches, and cross themselves, every Sunday pretending to be good Christians while all the while ignoring that Christ taught about all of need and obligation to help the poor.
They should indeed be stoned to death ... for they are not 'good Christians'....... they are in fact urchins of Evil ......
jonas on August 17, 2011 4:46 PM:
Is there some way to get an Obama administration official to go around saying that breathing oxygen redistributes income?
Fox and Friends would immediately counsel their viewers to put plastic bags over their faces lest they swallow this socialist tripe.
Mark on August 17, 2011 4:58 PM:
Is there no limit to the economic illiteracy here? All you liberals try to focus your brains here for a moment. There's only a fixed pie. If you take money from some people and give it other people to spend on food, then whoever has money taken away from them will spend less by the same amount so overall spending is not increased. And the people who you are taking money from will not just keep doing the same thing and continue working just as hard. If what they earn is taken away from then, they won't bother earning it to begin with. That's what is happening right now. Your funds to run the welfare state are drying up and it's in the process of collapsing.
Ashamed of being a Kansan on August 17, 2011 5:10 PM:
"Liberal"= pejorative
"Global Warming"=insult
"stimulus"=slur
How many other words can you add to the list?
nodak on August 17, 2011 5:17 PM:
How can these people on Fox and their zombi followers call themselves Christians when their EVERY utterance is 110% UNCHRISTIAN. Wish they would remember "What so ever you do". Oh well, Fox and Friends would just nail Him up if he came down again since He was such a solcialist!
stormskies on August 17, 2011 5:20 PM:
Mark on August 17, 2011 4:58 PM:
It's collapsing asshole because of pigs like you who justify in any way you can personal greed, and all must live for themself, and themself alone. Take your Ann Rand crap and shove it up your asshole.
This economy is not collapsing because of poor people, and those in legitimate need. It is collapsing because of the very greed you advocate. That's why in this system of capitalism that you worship on your false alter of god has created a reality in this country in which less than 1 percent of the population controls almost the entire wealth of this country. It is the fucking out of control bands, the hedge fund managers, Wall St that has turned this economy into nothing more that giant fucking casino to service their unending greed. And all the bets they have made lead to the economic disaster that Obama inherited from the pigs like you.
And yet here you are pretending to be economically 'literate'. You are nothing more than yet another deluded asshole defined by your own self interest, and fuck anyone else.
Cha on August 17, 2011 5:20 PM:
Billionaires are going to miss their food money? Really?They pay their fair share of taxes, don't they?
Certainly the Koch bros teabaggers don't use foodstamps..that would be against their principles, right?
Vilsack's point that it helps to stimulate the economy is right. As usual the idiots miss the point.
stormskies on August 17, 2011 5:25 PM:
This is what out of control greed defined by an out of control capitalism is ......... just one sad example within too many to count
August 17, 2011 01:00 PM
Verizon Punishes Striking Workers By Canceling Benefits
By Kenneth Quinnell
Laura Clawson at Daily Kos reports:
Members recently received letters from Verizon announcing that it is canceling group benefit plans for striking workers. This is an action which employers often take in strike situations to try unsettle the resolve of the strikers.
At CWA, we have faced this issue many times in the past and always protected our members and their families so that no one is harmed as a result of management’s ruthless act. This will be true for this strike as well.
Rather than attempting to negotiate a fair settlement with the workers, Verizon has decided to go the punitive route, trying to break the striking workers. Verizon has never attempted to approach this situation in good faith and this is another example of that. The Communications Workers of America say they are familiar with the tactic, though, and that they will make sure to take care of the working families affected by this move.
Doctor Whom on August 17, 2011 5:27 PM:
And yet they go to their churches, and cross themselves, every Sunday pretending to be good Christians while all the while ignoring that Christ taught about all of need and obligation to help the poor.
You have to remember, that for conservative Protestants, "Christianity" is about nothing other than each person "accepting" Jesus Christ as their "personal savior." That's it. For conservative Roman Catholics (as exemplified by EWTN programming) it involves strict adherence to the myriad rules and regulations of the Church, and not much else (they used to run some programming - from The Chrisophers for example - that had some bearing on social justice. But once they severed their official Vatican ties, they ditched all that stuff.
Daniel Kim on August 17, 2011 5:29 PM:
@Mark: (at 4:58 pm)
Is there really 'only a fixed pie?' Is this a zero-sum game? There is a term called "creating wealth" that comes to mind here. Your captains of industry are not just mining value from a finite pile of money, they actually are part of a system that *creates* value. The potato that sells for pennies a pound out of the ground becomes a food product that sells for dollars a pound off the grocery shelf. The added difference is not the same amount as the inputs of the workers and materials that went into converting it into a boxed food product, there is an actual additional value generated. That's why there is $1.84 put into the economy for every $1 sent to families in need.
Will the millionaire actually curtail his spending by the amount he is taxed? Does this millionaire live hand-to-mouth on such a narrow margin? That sounds like very poor money management to me. How about someone like me, who has a lot less than a million dollars? Do I pass up a box of potato-food-thing because an unemployed worker next door is buying it with my taxed money? Not really. I actually have enough of a buffer that slightly higher taxes don't change my behavior at all. It is true that I won't be buying that second or third house, but I wouldn't do it even if I had no taxes at all, because it is out of my range. A box of food product is pretty much always within my price range, and I am very glad that my neighbor can still eat with some dignity.
At this time, the world is in an economic crisis. Conditions are quite unlike the prosperous and optimistic days of . . . the Clinton administration. In the late '90s, when unemployment was reaching its theoretical minimum, and CBO projections indicated that we'd be paying off the national debt in a decade or so (by today, if not sooner), it would not have been a problem for those who were prosperous to buy luxuries and accumulate wealth. But we are in a crisis. One that was brought on in part by redistributing created wealth to the top 0.1 percent of our population while everyone else's wages stagnated.
If there were ever a time for the well-off to not buy a new house or new yacht or new island, this is it. If those millions of dollars are diverted to buying boxes of potato-based food products for millions of hungry children, that is a good thing. That is the best thing to be done with that money. It should be an obvious moral imperative for any wealthy human being in America to make a sacrifice that would benefit so many of their own neighbors. Those boxes on the grocery shelves, when purchased, will cascade into a pyramid of wealth that reaches as wide as dirt farmers in Idaho and as high as the CEO of Cargill, Inc.
ameshall on August 17, 2011 5:51 PM:
Don't kid yourself. These propagandists know they are spewing BS. They are merely reinforcing the narrative that holds the GOP together and keeps GOP voters rolling to the polls in their scooters. What unites Fox viewers is their firm belief, despite all evidence to the contrary, that Democrats (especially the black socialist president) want to take money from hard-working, family-values Republicans and give it to lazy, unemployed minorities. Every story on Fox is designed to keep that narrative alive and gin up anger in their looney base.
Anonymous on August 17, 2011 5:53 PM:
Mark seems to have a BIG problem understanding basic macroeconomics. To quote Molly "I can explain it to you, but I can't understand it for you." (Thanks, DJ. I hadn't heard that one.)
Here's the explanation: The amount of money in the economy is fairly irrelevant. The economy depends on the speed that money circulates. For instance, I give you a five dollar bill and your wife a twenty. You go out and spend it on a hamburger and fries while your wife sticks hers in her pocketbook and forgets about it. The five now goes to pay some peon at McDonalds who then spends it on rice and beans for his family whereupon it goes to the checkout girl who spends it on ice cream cones for her kids and the guy running the ice cream stand pays for gas for his car and the gas station owner pays a kid to mow his lawn and the kid now can buy more rice and beans... And all this happens over the weekend. Meanwhile the twenty is still in your wife's pocketbook. Now which one of those bills did more for the economy?
The same thing happens when you give a tax break to a millionaire. That money never circulates. It gets hidden in a moneymarket account in the Bahamas, so it doesn't do the economy any good since he had no intention of spending it anyhow. But if you give an unemployment check to someone with a family, it gets spent. See example above. The basic mistake you and others like you make is the zero sum game. That's not the way an economy works, and unless you understand that, you'll never do any good in politics.
Texas Aggie on August 17, 2011 5:57 PM:
Anonymous is Texas Aggie, sorry.
RosiesDad on August 17, 2011 6:01 PM:
Here's what I don't get:
Gretchen Carlson graduated cum laude from Stanford. How much does she have to dumb herself down to appear to be on level with Kilmeade and Doocy? And she does this for money?
(The rest of it is typical Fox News propagandist bullshit that really doesn't warrant much further discussion.)
Josef K on August 17, 2011 6:13 PM:
Is "Mark" (@ 4:58pm) for real? I honestly can't tell if that comment was intended to be satire (which succeeds marvelously) or serious (which fails miserably).
Rick B on August 17, 2011 6:42 PM:
Steve,
The food stamp program was passed to replace the earlier program where counties directly provided food to the poor hungry. The reason was that grocery stores which supplied areas of high unemployment were going out of business. The food stamp program was specifically designed to support agricultural and food producers.
Want to guess why the food stamp program is operated by the Department of Agriculture while other welfare type programs were and are administered by Health and Human Services??
Food stamps support agribusiness. That's why.
Mark on August 17, 2011 7:00 PM:
Josef K doesn't respond to what I say because he can't. You can ignore reality but you can't ignore the consequences of ignoring reality. In fifty years the liberals will have done to this country what they did to cities like Detroit. Daniel Kim, at least you attempted to respond to what I said. If you take a thousand dollars from a millionaire he may not immediately cut his spending by that amount. But he will have a thousand dollars less and at some point in the future he will spend less. So you are stimulating the economy now but causing less money to be spent in the future. So you are merely pushing the recession now off into the future. The only problem with that is the future eventually arrives. We pushed the recession following the internet stock bubble bursting a few years into the future until we had the mortgage bubble recession and then we pushed that a few years into the future. Each time we do that the next recession will be worse. We need to stop being shortsighted and think about the long term effects of what we do. Do you disagree with that?
Old Uncle Dave on August 17, 2011 7:06 PM:
So according to Foxnooz...
Giving money to Americans so they can buy food they otherwise couldn't afford is bad.
But
Giving money to Israel so they can buy weapons without having to use their own money is good.
yellowdog on August 17, 2011 8:31 PM:
You want to talk about tax cuts? Why don't we start by cutting taxes on food and medicine? Most states have a state sales tax on consumer goods. While many states exempt food and medicine, some do not, or not in full. Thus, Alabama has a state sales tax of 4% - with no exemption for food. Local and county governments can add on, so in Montgomery, Alabama, for example, the total sales tax is 10% - that is 4% for the state plus 3.5% for the city plus 2.5% for the county. Alabama's state income tax is 5% for those making over $5,000 per year. Mississippi's sales tax is 7%, with no exemption for food. Illinois charges a sales tax of 1% on food and prescription medicine, which is less than the state's general sales tax of 6.25%, but still... Among other big food-taxing states: Utah, Virginia, Oklahoma, Missouri, West Virginia, and the big one, Tennessee.
If you want to cut taxes, start with these.
Daniel Kim on August 17, 2011 8:41 PM:
@Mark (at 7:00 pm)
Thank you for your response. You are being quite reasonable in your dialog, compared to some, and deserve to be treated with respect.
Our millionaire sure is in a fix, isn't he? He's got to chafe at being misunderstood, since he probably earned his money in business, and doesn't buy yachts and islands, etc. He shops at Walmart, drives an older car, and wears suits off the rack. A thousand dollars would hurt him almost as much as it would hurt me.
Well, maybe not. Still, he's not lighting cigars with a burning C-note. He's a pretty middle-class looking guy who works every day, and works hard. He _has_ a million, he doesn't _make_ a million every year. The typical American millionaire has the money by accumulating it from a good-though-modest income through thrift and careful planning, with a bit of luck. I can respect that.
But, I am sure that a thousand dollars to that millionaire, or to me, is not the same as a thousand dollars to someone hitting their third month of unemployment. While he is not buying a yacht or a new house, he isn't buying several hundred boxes of potato-based-food-substance retail, either. Some of the real difference in the use of that one grand is in where and on what it is spent. A 2008 article by Mark Zandi at economy.com is often referred to by this blog. In it Zandi said:
[quote]
The President's [Bush] favored tax rebate plan would provide a quick, measurable boost to the economy. Based on simulations of the Moody's Economy.com macroeconomic model, every dollar lost to the Treasury from the rebate would generate slightly more than $1 in GDP within one year (see table). . . .
Extending unemployment insurance and expanding food stamps are the most effective ways to prime the economy's pump. A $1 increase in UI benefits generates an estimated $1.64 in near-term GDP; increasing food stamp payments by $1 boosts GDP by $1.73 (see table). People who receive these benefits are very hard-pressed and will spend any financial aid they receive within a few weeks.
(http://www.economy.com/dismal/article_free.asp?cid=102598)
[endquote]
So, for stimulative effect, money given as tax breaks will generate "slightly more" in GDP in a year, contrasted with the 60% to 70% increase that food stamps and unemployment benefits could generate within weeks. This money will change hands repeatedly in the cascade of wealth that I mentioned in my previous comment. When the future arrives, as you say it must, that money will not have disappeared. Just as bread cast upon the waters will return after a time, the same is true of money spent to benefit the poor. It will be there in the future, increased many fold as it changes hands time and again.
mcc on August 17, 2011 9:26 PM:
If it's true, then that just makes it all the more important for the Republicans to push back against it
Old Uncle Dave on August 17, 2011 9:29 PM:
An excellent article which explains why Fox is the way it is.
http://www.alternet.org/teaparty/151980/how_the_head_of_fox_news_is_making_americans_more_right-wing%2C_more_ignorant_and_ever_more_terrified/?page=entire
LL on August 18, 2011 12:10 AM:
You see, we fail to understand what is all too clear to Faux News: rich people deserve more, because they're rich.
Poor people deserve nothing, because they're poor.
Those assholes might as well have said this, since that's what they meant. It's what they always mean.
Jeff Meredith on August 18, 2011 10:34 AM:
Mark writes: "There's only a fixed pie. If you take money from some people and give it other people to spend on food, then whoever has money taken away from them will spend less by the same amount so overall spending is not increased."
This is economic illiteracy, Mark. From you, not us.
We have to look at the central question: Why are government transfer payments more effective for the overall economy than tax cuts for the wealthy?
The problem with your theory is that you ignore the fact that the Bush tax cuts - which have been putting extra money in people's pockets for a decade, particularly the affluent - are often saved rather than spent. Read this:
http://www.businessweek.com/news/2010-09-14/america-s-wealthy-save-tax-cuts-rather-than-spend-moody-s-says.html
The tax cuts almost immediately produced an increase in the savings rate among the rich. Why would this happen? Because a rich person already has more than enough money on hand to spend on their desires ... if you drop the top bracket's income tax burden from 39.6 percent to 35 percent, a great deal of the extra money will be saved rather than reinfused into the economy. Similarly, if you raise the tax rate to 39.6 percent from 35 percent, it's not going to affect their consumption much. As Doug Elendorf once said, "Policies that temporarily increased the after-tax income of people who are relatively well off would probably have little effect on their spending because they generally would be able finance their consumption out of their income or assets without such a change."
Contrast that with food stamps where 80% of the funds are redeemed within TWO WEEKS of receipts and 97% are redeemed within ONE MONTH. Why? Households with low incomes - think sub $30k for the year although SNAP eligibility requirements are more precise than that - use almost all of their resources to meet daily needs.
To recap: If the government gives a wealthy person a tax break, that dollar will more often be saved and not prop up demand or create jobs. If the government increases food stamp benefits, the economy will almost immediately see that money be put to use.
You have to think about who's connected to our consumption. It's not just the grocery store with the manager, stockboys, checkout counter personnel and investments like self-checkout ... USDA's Economic Research Service estimated that for every $1 billion of retail demand through food stamps, there was $340 million in farm production, another $110 million in farm value-added, and 3300 farm jobs.
And the Bush tax cut dollar that went into your bank account did what exactly for the economy?
I still don't know understand multipliers over 1.00. I'll leave that for others on this message board. But I do understand why the Bush tax cuts have the worst payout possible.
You can call all of this "redistributionist." Of course, the past three decades have been marked by only one kind of redistribution and that has been upward. The share of all income in America going to the bottom 90 percent has declined from 65 percent to 52 percent. The share of income accrued by the wealthiest 1 percent rose from 9 percent in 1974 to 23.5 percent in 2007. If you have a problem with "redistribution," you should have a problem with those figures.
Jeff Meredith on August 18, 2011 10:41 AM:
Typos (I have a horrible keyboard):
* It's "Elmendorf"
* "Receipt" -- not the plural "receipts"
royalblue_tom on August 18, 2011 4:01 PM:
Mark, it seems that your worry is that since your million-earner doesn't now get that $1000 (removed from him in taxes), he won't have it to spend later, and that will impact the economy down the road.
However, the $1000 tax money, given in foodstamps, will be spent now. But it doesn't disappear. That money has gone from the million-earner, to government, to food stamps, to company revenue (where the food was bought from).
So if your worry is that the money will not be available later, then you can stop worrying, as the food company will almost certainly spend the money later.
So, in summary:
* with food stamps, the $1000 stimulates the economy now, and is still available later, but a millionaire goes without $1000.
* without food stamps, the million-earner banks the money, which doesn't really stimulate now, and may make it available later, and someone goes without food.
And it should be noted that someone earning $1m a year is making over $1,000 *per day* after tax. Are you saying that you would stop trying to earn extra money if you were taxed an extra 1% or 2%? Given that we've already seen that this is not true, as taxes were higher in the eighties and nineties, and million-earners were ecstatic to earn more money.
The funds to run the welfare state are drying up because some people think we should no longer have one, and are paying politicians to reduce taxes for the rich, lower than they've ever been in the last 50 years instead of pay for the general welfare.
I'm not sure what point you are trying to make, other than you sure hate liberals and the poor for some reason.
(I'm using the term million-earner because a millionaire is worth a million, and that worth is not taxed - only the interest made on it).
RichardinSanJo on August 19, 2011 4:29 AM:
Try this: Food stamp recipients are merely the middlemen (middlepersons?) between the govt and the food producers. Their shameful need for food enables them to transfer govt money to agribusiness. What's not to like? Giving govt money to big business?? Even the willfully ignorant Fox & Idiots should be able to understand that!