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#52 Aug 17 2011 at 9:26 PM Rating: Decent
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ThiefX wrote:
Just one more reason why liberals should never have any power.

Food Stamps are now "Stimulus"


You know, without food stamps, the local grocery stores around here would not be able to support themselves. I was a cashier during the Bush administration, and I can tell you a good 80% of everyone who bought food did so using food stamps.

There is more to food stamps than "free food for poor people." It's money that is spent and creates growth like anything else.
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#53 Aug 18 2011 at 5:29 AM Rating: Excellent
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gbaji wrote:
Jophiel wrote:
gbaji wrote:
Wait! You're actually making this a serious argument instead of just a thought experiment?

No, otherwise I'd be arguing for the actual Jophiel Tax.


Oh. Whew! So you were equating the liberal idea of redistributing wealth to something we both agree doesn't work? I'm good with that! Smiley: grin

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Try and keep up instead of seeking a way out.


I'm keeping up just fine. I'm trying to figure out why you thought it was a good idea to use an example you admit doesn't work to support a real economic proposal. Seems kinda counter productive.

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The point remains that focused assets can be a force multiplier that diffuse assets are not even if the totals of both are the same. I know this is more complicated than your little "1-1!!" thing but the rest of us have moved on from preschool.


Fine. I'm yanking your chain. Whatever. Just channeling you for a moment there, with your silly analogy.

You're correct that focused assets can be a force multiplier. And that absolutely can work in economics. Heck, it's the basic concept behind things like buying stock, right? A bunch of investors, each risking a small amount of capital, can collectively build something none of them could have done (or would have wanted to risk doing) on their own. I just keep coming back to three problems though:


1. Government isn't very good at picking what to focus on. I mean, food stamps are great if our objective is to help prevent people from starving. But is that really the best place to focus economically? More important, is it better than where we took the money in the first place? As I said earlier, that's a hard argument to make.

2. It's not a choice. When people choose to focus their efforts in some way, we tend to see positive results. When they are forced to do so by someone else, this isn't necessarily the case. I suppose this is an offshoot of the first problem, but it's a biggie IMO. I don't get to choose how my money is spent, and the person spending the food stamp doesn't really either. It's just not flexible enough to work.

2. It's not really focused enough, or "special" enough. When a group of people invest in a corporation, 100% of their investment goes into the corporation, with a single business plan involved (hopefully) to accomplish something none of them would do on their own. But what we're doing here is taking a smallish amount of money from a large amount of people, then handing it in the form of food stamps to a slightly smaller number of people, then having them spend those stamps at an even smaller number of stores (but we're still talking tends of thousands of stores spread across the whole country). Where's the focus? Take that money and spend it building a moon base or some other thing we wouldn't otherwise build, and you're using the focused-asset concept to great effect. Spending it to buy food? Not so much.


Um... Which actually brings me to another point. Not sure if this is number 4, or something else entirely. The big flaw specifically with the whole argument being made that more people on food stamps is somehow a good thing because of the economic effect is that it misses one important fact:

The people buying food with the stamps didn't just magically appear today. They existed yesterday and the day before that, right? Prior to losing their jobs and ending out on food stamps, they were buying food in the same stores that they'll be buying food with their food stamps. This ties into my whole "they didn't earn the money from their own labors" bit. Before they bought the food with their own money, which was a subset of that earned by their own labor output. Thus, the cost of the food was really zero from an economic standpoint. Now, even if we assume that they are buying the exact same amount of food, there's no economic stimulus effect since we haven't actually increased the amount of food the store sells. There is a negative effect because that dollar had to be taken from someone else's productive output.


Even ignoring the broader flaws with income transfers creating economic growth, in this particular case, we can say with absolute certainty that it can't create growth. Certainly, we can say that an increase in the total number of people on food stamps (the condition at hand) cannot possibly be said to be a positive economic effect. There is nothing but negatives resulting from the transfer from other people, and absolutely zero positive at all.

I don't see how you're able to get dressed and get to work each day. Good lord.
#54 Aug 18 2011 at 6:17 AM Rating: Excellent
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I support this endeavor, but the posts should go to help the posting middle class (1,000-5,000 posts). We're shrinking, and the middle class is a key indicator of forum health.

All signs suggest that the middle class puts posts to good use; investing them in key forums to work towards one day owning a title.

What good does it do to prop up the one-post survey makers, who contribute nothing to the forum? The forum elite won't even miss the posts. Save the posting middle class!
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#55varusword75, Posted: Aug 18 2011 at 7:39 AM, Rating: Sub-Default, (Expand Post) lagaga,
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#57 Aug 18 2011 at 7:42 AM Rating: Good
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#58 Aug 18 2011 at 10:36 AM Rating: Decent
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gbaji wrote:
Want to know why? Because 307,006,550 lost money is why. One store gained, and a whole bunch of other people lost. You can do math, right? You didn't make anything. You just shifted money from one place to another. This cannot create economic growth.
By that definition, it is impossible to reach any economic growth. All transactions result in a transfer of money in exchange for goods or services, which is exactly what you said is valueless to the economy.
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#59 Aug 18 2011 at 10:42 AM Rating: Excellent
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Gbaji has shifted from insisting that it can't create growth to saying maybe it can create growth but it's ABSOLUTELY SURE that food stamps can't create any growth...

Which is how you know he's wrong. No joke: You could graph the number of "absolute" terms Gbaji uses in his post history versus how accurate he is in those posts and see a clear inverse relationship.

That and the whole "Oh noes! You focused on the words I used and that's your fault for noticing how my words made no sense because you're too dumb to realize I meant other words that wouldn't have been as stupid as the words I used so I win!!" thing he always falls back on.

Edited, Aug 18th 2011 11:43am by Jophiel
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#60 Aug 18 2011 at 2:38 PM Rating: Decent
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bsphil wrote:
gbaji wrote:
Want to know why? Because 307,006,550 lost money is why. One store gained, and a whole bunch of other people lost. You can do math, right? You didn't make anything. You just shifted money from one place to another. This cannot create economic growth.
By that definition, it is impossible to reach any economic growth. All transactions result in a transfer of money in exchange for goods or services, which is exactly what you said is valueless to the economy.


The transfer is valueless by itself (well, except to the degree that it aids in increased production of some kind). The generation of goods and services which we transfer that money *for* is quite valuable. That's the part that I suspect is just not sinking in. No amount of us handing money back and forth actually creates more money. More correctly, the total economic value that money represents cannot increase unless the total productive output that the money represents increases.

Imagine we have an economy which consists of 5 pencils. Now, imagine we decide that rather than handing pencils back and forth, we print up 5 dollars, each one representing a pencil. No amount of us moving the dollars around causes more pencils to appear in our economy. Only if someone goes out and makes another pencil does the economy "grow". It's the creation of something which is useful to someone else which has value. The dollars are only placeholders to make the trade of those outputs easier to conduct. Nothing more.

Now, obviously it's more complicated when we are dealing with consumable items (like food). The transfer of money can create the production of more food (and everything else involved with it), but that's only a net positive *if* the money used to purchase more food actually represents production itself. I've tried to explain this several times now, and the funny thing is that every response has been focused on every other part of my posts. Which suggests that most of you simply don't understand the concept I'm trying to explain. For increased demand in one part of the economy to actually create economic growth, it has to be demand driven by increased productive output in the first place. In other words, if our workforce is more productive and earns more money, than spending that extra money in stores will create more growth. More correctly, that's a symptom and feedback effect from already creating growth. It starts with increased total productivity and results in increased demand, which in turn makes additional increased productivity worth doing.


When that extra demand in one part of the economy results not from an overall increase in productive output, but merely because we transfered money from a one person to another (or a whole bunch of people), it wont have the same effect. That's because we start with a negative (we took money from someone) *and* because the market "knows" that there's no actual increase in total real productive value. We can certainly make one sector of the market more successful, but always at the cost of making another sector fail in an exactly equal and opposite manner.


The pitfall most Keynesian economists fall into is that because the currency is "floating", they make the mistake of assuming that it's not tied to anything. That it's just imaginary. In fact, this is often taught in school. Everything is just worth what people think it is (including money). It's all an illusion, so you can manipulate things to make them appear more or less valuable and it really makes it so. But that's only partly correct. While the value of everything is not based on the quantity of gold or silver in our system, is is based on the total quantity of all goods and services produced by the economy. That's still a matter of perception, but it has very real and measurable relative valuation. We can say that we produced more goods this month than last, or more people were employed this year than last, etc. And elements within the economy certainly act on relative quantities of money available to them.

Taking money away has a negative effect. Putting money someplace else has an equal positive effect. If your objective is social in nature (you think that rich people should have less money and poor people need to eat), then this is an acceptable means to achieve that goal. But it is an absolute mistake to think that this will create positive economic outcomes. It wont. It can't.


I just don't know how many different ways I can explain this concept.
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#61 Aug 18 2011 at 2:42 PM Rating: Good
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#62 Aug 18 2011 at 2:45 PM Rating: Decent
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Jophiel wrote:
Gbaji has shifted from insisting that it can't create growth to saying maybe it can create growth but it's ABSOLUTELY SURE that food stamps can't create any growth...


That's not what I said. It can't create growth. Period. You're still failing to see the difference between one part of the economy, and the whole. On the whole, no growth will happen overall. One sector of the economy may grow, but at the expense of another shrinking. Again, this is basic math.


In addition to that fact, in this specific case it not only can't create growth, overall, but isn't even going to create growth in just the one targeted sector. As I said, all the people on food stamps today who were employed and not on food stamps a year ago, purchased food a year ago. Therefore, the total amount of demand for food didn't increase. We didn't make more people or more mouths to feed. We just changed the way they pay for their food.

So in this case, we have a negative in the form of those people losing their jobs and thus not producing anything (or as much). This means that the stuff they would have purchased (like food) isn't being purchased anymore. To counter that, we create a second negative by taking money from other sectors of the economy. We then use that to buy food for those people. So the food market stays exactly the same, the economy loses the productivity those workers were doing while employed *and* the people who were taxed a bit more to pay for the food stamps lose as well.


In this case, it's worse than the normal case for monetary transfers. We have two negative effects and zero positive. How on earth anyone can try to spin this as a positive is pretty amazing!
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#63 Aug 18 2011 at 2:47 PM Rating: Decent
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Jophiel wrote:
I don't know how many ways I can explain to Flea that water is made out of rocks but it must be her fault for not understanding it.


Ah... So because it's possible to be wrong about something, it must be the case here. So you're not even going to attempt to argue the actual point I'm making? You can't make an argument as to why or how more people on food stamps today than last year somehow equates to positive economic growth?


You argue the words, but totally miss the point.
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#64 Aug 18 2011 at 2:52 PM Rating: Good
Apparently in Gbajiland, if something is purchased by food stamps, it doesn't need to be replaced. No farmer has to grow more food, no shippers have to ship it, it's just a big null.

Queue: But you're missing the POINT!! It's so obvious!!
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#65 Aug 18 2011 at 3:06 PM Rating: Excellent
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gbaji wrote:
So because it's possible to be wrong about something, it must be the case here.

You happily jumped aboard the "No one else can understand it!" wagon pretty quick, thinking it must be the case. Smiley: smile

Quote:
You can't make an argument as to why or how more people on food stamps today than last year somehow equates to positive economic growth?

Oh, hi Strawman! I missed you sooooo much because it's been fifteen minutes since the last time Gbaji waved you in my face!

That was never the argument. The question was whether or not food stamps could act as an economic stimulus (versus the same situation without said food stamps). I guess when you make up whole new arguments in your head, it makes you feel like a real winner.
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#66 Aug 18 2011 at 3:11 PM Rating: Default
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Here's a thought on food stamps and there benefits. Low income households have access to more food then they would normally. They can eat slightly better. This leads to better health. Better health = better education = better jobs = economic growth.
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#67 Aug 18 2011 at 3:18 PM Rating: Excellent
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gbaji wrote:
Jophiel wrote:
I don't know how many ways I can explain to Flea that water is made out of rocks but it must be her fault for not understanding it.


Ah... So because it's possible to be wrong about something, it must be the case here. So you're not even going to attempt to argue the actual point I'm making? You can't make an argument as to why or how more people on food stamps today than last year somehow equates to positive economic growth?


You argue the words, but totally miss the point.


Question: What were these people doing with the money before we took it from them to give to people who need food?

Maybe I don't get this economics stuff but if they were trying to get out from under-water on their mortgage, or paying off their student loans they were sending their money to the banks instead of circulating it through the economy. Normally banks would loan that money out, but they don't seem able to do that these days; despite record low interest rates. The banks end up trying to shore up their own balance sheets which were sent into disarray by the mortgage mess.

Again, from my uneducated point of view, it seems that forcing this money back into the system lessens the contraction; at least until you get to the point where the private sector has shed enough debt to start borrowing at higher levels again. Arguably what your doing is prolonging the de-leveraging process by feeding people. That doesn't sound so terrible.

Or maybe I'm just turned around on this whole thing... Smiley: rolleyes
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#68 Aug 18 2011 at 3:28 PM Rating: Decent
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Technogeek wrote:
Apparently in Gbajiland, if something is purchased by food stamps, it doesn't need to be replaced. No farmer has to grow more food, no shippers have to ship it, it's just a big null.


Stop attributing your own lack of understanding to me. Of course the food has to be replaced. But here's the thing: The things that would have been purchased with the money if it hadn't been taken and turned into food stamps are now not being replaced. Get it? Exact same amount of money. Whether the money taken would have been used to buy something, or invest in something doesn't matter. The economic effects that money would have generated are gone and replaced with the economic effects of buying food.


In the best case scenario, this just balances out. The economy loses in one area and gains the exact same amount in another.


But in this case, it's lose/lose. As I have explained three times already, the people who represent the increase in food stamps didn't just magically appear out of a "poor person generating machine". They were employed last year and aren't this year. They were buying the same amount of food last year as they are this year. Get it? There is zero increase in food consumption, thus zero increase in food restocking, thus zero increase in the number of people employed doing those things. Zero economic gain. How many times do I have to explain this?


Holy **** some of you are dense!
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#69 Aug 18 2011 at 3:38 PM Rating: Decent
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Jophiel wrote:
gbaji wrote:
So because it's possible to be wrong about something, it must be the case here.

You happily jumped aboard the "No one else can understand it!" wagon pretty quick, thinking it must be the case. Smiley: smile


After I've explained the exact same relatively simple concepts several times and people continue to post as though I didn't, but with no rational argument in opposition, it's kinda hard to conclude anything else. How many times do I have to say "No. It doesn't work that way, and here's why" only to get the same "But it works!" response before I can conclude that they aren't getting the explanation?

Quote:
Quote:
You can't make an argument as to why or how more people on food stamps today than last year somehow equates to positive economic growth?

That was never the argument.


That was exactly the argument made the Obama's Secretary of Agriculture. What did you think I meant by "in this case..."? Try to keep up.


Quote:
The question was whether or not food stamps could act as an economic stimulus (versus the same situation without said food stamps). I guess when you make up whole new arguments in your head, it makes you feel like a real winner.


Yeah. It doesn't act as a stimulus any other time either Joph. Are you capable of handling two separate cases in your head? I've said this several times. It doesn't work under normal conditions. It *really* doesn't work in the conditions we're in right now. What part of that honestly confused you?
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#70 Aug 18 2011 at 3:50 PM Rating: Decent
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someproteinguy wrote:
Question: What were these people doing with the money before we took it from them to give to people who need food?


Not nothing. But the left's calculations of the economic benefits of doing this assume that every penny they take is "idle money". It's not though. Unless it was literally hidden under a mattress and not being used, it's not idle. Specifically, if it's being taxed, it's being used. We tax economic activities, right? So whatever they were doing that caused them to pay taxes is what the money was doing. So, it's money they earned via their labors, or money they spent buying something, or money they invested in some way.

Quote:
Maybe I don't get this economics stuff but if they were trying to get out from under-water on their mortgage, or paying off their student loans they were sending their money to the banks instead of circulating it through the economy.


Banks are the primary means by which money circulates through the economy. I know we like to have this image of them just stuffing money into a big vault, but that's really not the case.

Quote:
Normally banks would loan that money out, but they don't seem able to do that these days; despite record low interest rates. The banks end up trying to shore up their own balance sheets which were sent into disarray by the mortgage mess.


Banks are still lending quite a bit of money and I disagree with the notion that money paid to a bank somehow leaves the economy, but honestly this is beside the point.

Imagine that the tax dollars we take come from someone who's struggling to pay their mortgage, or student loans, or car payment. When you are in that state, what do you stop doing? Do you just not pay the mortgage, or car payment, or student loans? Or do you stop buying other things you don't really need first? It's the latter, right? The point being that in those cases you list off, the biggest impact is going to be in exactly the area the Dems propose to stimulate by doing this: Consumer demand.


You're just moving it from one place to another.

Quote:
Again, from my uneducated point of view, it seems that forcing this money back into the system lessens the contraction; at least until you get to the point where the private sector has shed enough debt to start borrowing at higher levels again. Arguably what your doing is prolonging the de-leveraging process by feeding people. That doesn't sound so terrible.


I'll say this again, if your reason for doing this is social (we need to feed people who can't feed themselves), then this is a legitimate rationale. The problem is when idiots like the AG Secretary try to argue that it's somehow a good thing for the economy that more people are on food stamps this year than were on food stamps last year, and attempts to use a completely bogus imaginary economic stimulus argument to support that claim.

Can we agree that this is *not* a good thing?

Quote:
Or maybe I'm just turned around on this whole thing... Smiley: rolleyes


You're not turned around. Just missing the bigger picture I think.
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#71 Aug 18 2011 at 3:55 PM Rating: Decent
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Peimei wrote:
Here's a thought on food stamps and there benefits. Low income households have access to more food then they would normally. They can eat slightly better. This leads to better health. Better health = better education = better jobs = economic growth.


That's not the argument being made the the AG Secretary though. Nor is it the argument that Pelosi made a couple years ago when she attempted to basically argue the same thing (for slightly different reasons though). They are arguing that each dollar of food stamp creates more than a dollar or economic growth (Pelosi said something like $1.75, this guy said something like $1.85). They are arguing purely from a demand growth perspective.

Other cases can be made of course. I've said several times that there are good reasons for things like food stamps. But the idea that we'll experience some kind of macro-economic growth from the increased demand generated by transferring money into food stamps is not one of them. It's a really really really dumb idea that is pretty easily debunked, yet it seems to refuse to die and keeps getting repeated every few years by some liberal politician.
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#72 Aug 18 2011 at 4:19 PM Rating: Excellent
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gbaji wrote:
someproteinguy wrote:


Normally banks would loan that money out, but they don't seem able to do that these days; despite record low interest rates. The banks end up trying to shore up their own balance sheets which were sent into disarray by the mortgage mess.


Banks are still lending quite a bit of money and I disagree with the notion that money paid to a bank somehow leaves the economy, but honestly this is beside the point.

Imagine that the tax dollars we take come from someone who's struggling to pay their mortgage, or student loans, or car payment. When you are in that state, what do you stop doing? Do you just not pay the mortgage, or car payment, or student loans? Or do you stop buying other things you don't really need first? It's the latter, right? The point being that in those cases you list off, the biggest impact is going to be in exactly the area the Dems propose to stimulate by doing this: Consumer demand.


You're just moving it from one place to another.



Right you're diminishing consumer spending by funneling it through the government, who may or may not be spending it in a way that has a good return. My argument is that the American people are already doing this though. They're taking income that they would normally spend on consumer goods and using it to pay down debt. Partly because they have an awful lot of it, and partly because of fear of what may happen in the future. If they aren't going to be pumping it into the economy, why not have the government take it and do that for them?

As for money leaving the banks and heading back to the people, I don't have good numbers on how much lending has returned to the housing market (as an example or where there previously was a lot of return), and whether or not that's anywhere near the levels it was before. It does seems businesses aren't hiring yet, which is another nice way to return the money to the common-folk.

Share if you have something? Or perhaps have a better example of this money coming back into the system, again economics isn't my thing.

Smiley: flowers

gbaji wrote:
Quote:
Again, from my uneducated point of view, it seems that forcing this money back into the system lessens the contraction; at least until you get to the point where the private sector has shed enough debt to start borrowing at higher levels again. Arguably what your doing is prolonging the de-leveraging process by feeding people. That doesn't sound so terrible.


I'll say this again, if your reason for doing this is social (we need to feed people who can't feed themselves), then this is a legitimate rationale. The problem is when idiots like the AG Secretary try to argue that it's somehow a good thing for the economy that more people are on food stamps this year than were on food stamps last year, and attempts to use a completely bogus imaginary economic stimulus argument to support that claim.

Can we agree that this is *not* a good thing?


Right, I'm hearing what you're saying. It's not necessarily a great thing from an economic point of view, social responsibilities set aside for the moment of course.

gbaji wrote:
Quote:
Or maybe I'm just turned around on this whole thing... Smiley: rolleyes


You're not turned around. Just missing the bigger picture I think.


I've been over-fixating on this private-sector debt thing for a while. Just can't shake the idea that while our government may have a terrible financial mess on their hand, they still aren't anywhere near as bad off as the private sector at the moment. Normally I'm into looking for a pretty good return on investment from a government program, or at least a compelling enough social cause, but I don't know at the moment. As much as everyone is complaining about run-away government spending, at least they're doing some spending right now.

What I'm looking for is for the private sector to stop paying down debt, and start putting a larger percentage of their income into consumer goods. Until that happens I'm wondering how much the government should do in the meantime to minimize the downturn. I suppose it's a drop in the bucket compared to GDP, and I'm not convinced they really have the leverage to make things much better or worse.

I dunno, I'm rambling now.

Smiley: rolleyes




Edited, Aug 18th 2011 3:20pm by someproteinguy

Edited, Aug 18th 2011 3:21pm by someproteinguy
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#73 Aug 18 2011 at 4:24 PM Rating: Decent
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gbaji wrote:
Technogeek wrote:
Apparently in Gbajiland, if something is purchased by food stamps, it doesn't need to be replaced. No farmer has to grow more food, no shippers have to ship it, it's just a big null.


Stop attributing your own lack of understanding to me. Of course the food has to be replaced. But here's the thing: The things that would have been purchased with the money if it hadn't been taken and turned into food stamps are now not being replaced. Get it? Exact same amount of money. Whether the money taken would have been used to buy something, or invest in something doesn't matter. The economic effects that money would have generated are gone and replaced with the economic effects of buying food.

In the best case scenario, this just balances out. The economy loses in one area and gains the exact same amount in another.

But in this case, it's lose/lose. As I have explained three times already, the people who represent the increase in food stamps didn't just magically appear out of a "poor person generating machine". They were employed last year and aren't this year. They were buying the same amount of food last year as they are this year. Get it? There is zero increase in food consumption, thus zero increase in food restocking, thus zero increase in the number of people employed doing those things. Zero economic gain. How many times do I have to explain this?

Holy **** some of you are dense!

On the upside, those poor people who you won't give food stamps to, will starve to death and no longer be counted in unemployment numbers. There's a win!
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#75 Aug 18 2011 at 4:34 PM Rating: Excellent
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gbaji wrote:
That was exactly the argument made the Obama's Secretary of Agriculture.

No, it wasn't.
You wrote:
You can't make an argument as to why or how more people on food stamps today than last year somehow equates to positive economic growth?
Sec of Ag wrote:
I should point out, when you talk about the SNAP [Supplemental Nutrition Assistance Program] program or the food stamp program, you have to recognize that it's also an economic stimulus. Every dollar of SNAP benefits generates $1.84 in the economy in terms of economic activity. If people are able to buy a little more in the grocery store, someone has to stock it, package it, shelve it, process it, ship it. All of those are jobs. It's the most direct stimulus you can get in the economy during these tough times.

Nowhere does he come close to saying "more people on food stamps today than last year somehow equates to positive economic growth". It's a stimulus for people who otherwise would not be spending money because they're on food stamps. It's a benefit over not spending the money at all or having it diffused and less effective but you're trying to spin it into "He says this means the entire country is growing!"

Quote:
Try to keep up.

Try not to lie to cover your pathetic lack of understanding and embarrassment at being shown wrong so many times. Go on and start your pathetic spinning now about how we're looking at the wrong words and these are just your opinions and all the other bullshit you cry when you're cornered by some actual truth.

Edited, Aug 18th 2011 5:39pm by Jophiel
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#76 Aug 18 2011 at 4:56 PM Rating: Default
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Jophiel wrote:
gbaji wrote:
That was exactly the argument made the Obama's Secretary of Agriculture.

No, it wasn't.


Yes, it was.

Quote:
Sec of Ag wrote:
I should point out, when you talk about the SNAP [Supplemental Nutrition Assistance Program] program or the food stamp program, you have to recognize that it's also an economic stimulus. Every dollar of SNAP benefits generates $1.84 in the economy in terms of economic activity. If people are able to buy a little more in the grocery store, someone has to stock it, package it, shelve it, process it, ship it. All of those are jobs. It's the most direct stimulus you can get in the economy during these tough times.

Nowhere does he come close to saying "more people on food stamps today than last year somehow equates to positive economic growth".


Lol! He said that in response to a new report about an increase in the total number of people on food stamps Joph. He was attempting to spin a clear negative economic indicator into a positive by saying that those people being on food stamps were actually creating jobs!

Context is everything.

Quote:
It's a stimulus for people who otherwise would not be spending money because they're on food stamps. It's a benefit over not spending the money at all or having it diffused and less effective but you're trying to spin it into "He says this means the entire country is growing!"


He said it was "the most direct stimulus you can get in the economy during these tough times."

It was a moronic thing to say Joph. The economic math itself is extremely questionable, and it's certainly the wrong thing to say in the context he said it. It's like talking about a rise in child abductions and making a point to say that people tend to donate to children focused charities when such cases occur and then concluding with "Child abductions really are the best way to raise awareness for those charities and increase the amount of donations they receive".

Edited, Aug 18th 2011 3:56pm by gbaji
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#77 Aug 18 2011 at 5:05 PM Rating: Excellent
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gbaji wrote:
He said that in response to a new report about an increase in the total number of people on food stamps Joph

Yeah, I've seen it (including when he says it helps stimulate the local economy in those areas). I must have missed the part where he claims it's great for the overall economy. Oh, that's right -- he never said it, you just lied about it.

He did also state that it was good as a stimulus, not because more people needed food stamps, but because more people who already needed food stamps but were unaware of their availability could now access them due to the efforts of the Dept of Ag and would now spend that money. Which is, again, completely different from what you're trying to imply.

Coming from someone certain that Democrats are trying to sell everyone on the notion that repealing the Bush tax cuts on the top 2% will fix the world, I suppose the actual quote mattered less to you than insisting that your spun version is correct. Good job Smiley: laugh

Edit: It's funny how the part where he talks about the food stamps going to already eligible people is missing from the breathless "transcripts" in the conservative rounds and you have to watch the entire interview to hear it.

Edited, Aug 18th 2011 6:22pm by Jophiel
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#78 Aug 18 2011 at 5:29 PM Rating: Decent
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someproteinguy wrote:
Right you're diminishing consumer spending by funneling it through the government, who may or may not be spending it in a way that has a good return. My argument is that the American people are already doing this though. They're taking income that they would normally spend on consumer goods and using it to pay down debt. Partly because they have an awful lot of it, and partly because of fear of what may happen in the future. If they aren't going to be pumping it into the economy, why not have the government take it and do that for them?


Again, I disagree that paying down debt doesn't have just as much positive economic impact as buying something at a store, much less that it can be equated to taking that money out of the economy. IMO, that's just a completely incorrect assumption. There are two sides to the economic equation, and they need to be somewhat in balance. They're different sides of the same coin, and it's unfair to place more weight on one than another.

Also, the debt they're "choosing" to pay down mostly consists of credit card debt, right? But even in the medium term that creates more consumption potential, not less. A dollar I spend paying down a credit card equals a dollar+interest worth of stuff I can buy next month. Unless you are being incredibly short sighted, this is going to be preferable to the alternative. Certainly taking money people might have used to pay down debt in order to artificially increase spending in another area is questionable at best.

Quote:
As for money leaving the banks and heading back to the people, I don't have good numbers on how much lending has returned to the housing market (as an example or where there previously was a lot of return), and whether or not that's anywhere near the levels it was before. It does seems businesses aren't hiring yet, which is another nice way to return the money to the common-folk.


Yup. Employment is down but I'd argue that there are other reasons for that. Lending is down a bit, but not as much as you might think. You can still buy a car or a house if you want. Also, I suspect you are unaware just how much lending goes on between banks and businesses all the time. You don't see it, but it does have a huge impact. Even if they're not hiring as many people, those businesses are still making products. That's kinda critically important to a healthy economy.


Like I said, there are two sides to the coin. Unfortunately, the political left tends to ignore one side and pretend it doesn't exist. The right treats both equally. You need both demand *and* supply for a healthy growing economy.

Quote:
Share if you have something? Or perhaps have a better example of this money coming back into the system, again economics isn't my thing.


A better example? No. A better approach than attempting to take money from one place and put it somewhere else? Don't do that. Because another negative effect is that people tend to not want their money taken from them. If they think that it'll happen, they'll tend to *not* engage in the activities which result in their money taken away. Remember when I said that all taxed money by definition is not idle because we tax economic activity? Well, what do you think happens if we raise tax rates on an economic action (or even threaten to)? People will shift their money away from the things we're increasing the taxes on, right?

So while you may transfer X amount of dollars from one part of the economy to the other, which at best breaks you even, you may lose several times X dollars in money that actually does "leave the economy". It's really not worth it and it's more harmful than it helps. The solution is to *not* do that. But right now, we have spent this money not via direct transfer as we've been discussing, but by borrowing that money. So every player in the economy on the supply side is looking at this and working on the assumption that their taxes are going to go up. Why are we surprised that they are choosing to put their money into other areas?

That's how money leaves the economy. We don't get it back by taking it via a transfer process. We actually end out chasing more away. It's counter productive. I'd explain the ideological reasons why this is done and how they outweigh the economic factors, but that would be a whole thread by itself. Suffice it to say the decisions the Dems have been making in terms of spending and borrowing have *nothing* to do with economics.

Quote:
I've been over-fixating on this private-sector debt thing for a while. Just can't shake the idea that while our government may have a terrible financial mess on their hand, they still aren't anywhere near as bad off as the private sector at the moment. Normally I'm into looking for a pretty good return on investment from a government program, or at least a compelling enough social cause, but I don't know at the moment. As much as everyone is complaining about run-away government spending, at least they're doing some spending right now.


As I said before. Spending is not the only economic activity. Unfortunately, there's a whole side of our political spectrum that does everything it can to make people think this, but it's not true.

I just can't stress this enough. You need to let go of those assumptions you've been taught. You're only looking at half of the real economic picture.

Quote:
What I'm looking for is for the private sector to stop paying down debt, and start putting a larger percentage of their income into consumer goods.


Why? I get that you've been told that this is bad, buy can you say why? To me, it's good for the private sector to pay down debt. It's not like when they do this that the money disappears. One of the bigger problems right now is that we have too much private debt (as you stated). By paying it off, it frees that capital to be lent out again. This creates economic stimulus just as surely as more people buying things in stores does. But no Democrat will ever admit this, not because it isn't true from an economic standpoint, but because it counters their social agenda.


Quote:
Until that happens I'm wondering how much the government should do in the meantime to minimize the downturn. I suppose it's a drop in the bucket compared to GDP, and I'm not convinced they really have the leverage to make things much better or worse.


They should stop looking at things they can do, and stop doing the harmful things they are doing right now. Again, you're unfortunately repeating completely false assumptions about economics. It's because of those false assumptions that we're in this mess to begin with, and we wont get out of them until we realize that government is not the solution. Government is the problem.
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#79 Aug 18 2011 at 5:33 PM Rating: Decent
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Jophiel wrote:
gbaji wrote:
He said that in response to a new report about an increase in the total number of people on food stamps Joph

Yeah, I've seen it (including when he says it helps stimulate the local economy in those areas). I must have missed the part where he claims it's great for the overall economy. Oh, that's right -- he never said it, you just lied about it.


AG Secretary wrote:
It's the most direct stimulus you can get in the economy during these tough times.


He didn't say "in the food distribution sector", or "in the consumer goods market". He said "in the economy". It's the "most direct ... in the economy". Not part of the economy, but... wait for it... the whole **** economy.

You're just off your game today aren't you?

Edited, Aug 18th 2011 4:33pm by gbaji
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#80 Aug 18 2011 at 5:53 PM Rating: Excellent
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Huh. So you DIDN'T actually listen to his entire comments, huh? So much for "context is everything"...

Oh well. You got the abbreviated version and that was all you needed to start shooting off about your *ahem* "opinions".

Edited, Aug 18th 2011 6:54pm by Jophiel
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#81 Aug 18 2011 at 6:03 PM Rating: Decent
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Jophiel wrote:
Huh. So you DIDN'T actually listen to his entire comments, huh? So much for "context is everything"...


ITT: Joph fails to understand the correct use of "context".

Quote:
Oh well. You got the abbreviated version and that was all you needed to start shooting off about your *ahem* "opinions".


You asked if you'd failed to see where he said that this applied to the overall economy Joph. I quoted the portion of his statement where he said just that. You might even have a bit of wiggle room if this was the very first time a liberal had made this exact argument and we could speculate that maybe he really meant to limit the quoted statement to "local economy", but it's not. And every other time I've heard this same argument used, it was not limited to just local economic effects. He was very clearly extrapolating the overall effect of this across the national economy as a whole.
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#82 Aug 18 2011 at 6:07 PM Rating: Excellent
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gbaji wrote:
ITT: Joph fails to understand the correct use of "context".

That would have been far more clever if, you know, it was remotely accurate.

Quote:
You asked if you'd failed to see where he said that this applied to the overall economy Joph. I quoted the portion of his statement where he said just that.

He didn't. He, in fact, went on to remark that he was speaking of local economies.

Sec of Ag wrote:
We're now working with them to make sure the people who are eligible get the benefits and that will help stimulate their local economy.

But great job not understanding what "context" is and then making yourself look more foolish by doubling down on it.

Edited, Aug 18th 2011 7:13pm by Jophiel
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#83 Aug 18 2011 at 6:48 PM Rating: Excellent
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Ugh I'm not going to quote all that G. Smiley: tongue

Little bits where I'm still trying to understand your position and my own:

Quote:
Why? I get that you've been told that this is bad, buy can you say why? To me, it's good for the private sector to pay down debt. It's not like when they do this that the money disappears. One of the bigger problems right now is that we have too much private debt (as you stated). By paying it off, it frees that capital to be lent out again.


Because I read an analysis like this that says consumer is 70% of the economy. I read others that say that 70% is an inflated number, etc. But it's usually still a pretty big chunk. My mind says the suppression of that much of the economy is bad and stuff.

I agree that the single best thing we can do in the long run is to pay off our private debt, basically for the reasons you list. It's bad and stuff. However...

Quote:
So while you may transfer X amount of dollars from one part of the economy to the other, which at best breaks you even, you may lose several times X dollars in money that actually does "leave the economy". It's really not worth it and it's more harmful than it helps. The solution is to *not* do that.


The point is to invest money in a way where you get a better return on investment then you were getting previously. Markets are usually pretty good at this, but they are far from perfect. You don't have to come out ahead to win, just less far behind then previously. Why not have the government invest the money in the economy? We made money in the bank bail out, so it's not like it's impossible.

Quote:
Again, you're unfortunately repeating completely false assumptions about economics.


Well I'd be on the lookout for these to continue. I'm a scientist not an economist. Smiley: wink

For better or for worse I still vote (assuming I get re-registered Smiley: um) and fleshing out an opinion prior to doing that is fulfilling the least of my democratic obligations.
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#84 Aug 18 2011 at 8:15 PM Rating: Decent
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Jophiel wrote:
Quote:
You asked if you'd failed to see where he said that this applied to the overall economy Joph. I quoted the portion of his statement where he said just that.

He didn't. He, in fact, went on to remark that he was speaking of local economies.


Yes. He went on to say that the overall numbers were higher because they'd been successful at getting states (like California) which traditionally "underperformed" (interesting word choice) at informing people about the availability of food stamps to get more people signed up for them, thus stimulating their local economies.

None of which refutes the idea that his earlier statement referred to the overall economy. I don't think it's a stretch to assume that if you add local stimulus to more areas around the country that this would act as an "overall stimulus" for the whole economy. If the same local stimulus is applied everywhere, how can that not be considered an overall stimulus?

The point is that it's flawed anyway. It only stimulates "locally" in the context of those regions being left out before (ie: they were paying their share of the cost, but not taking as much of the benefits). In an ironic twist, you were correct in a way that unequal distribution can create locally beneficial effects, but if the AG succeeds in getting everyone in the country who can qualify for food stamps on the programs, it will eliminate any small local benefits it might have had. Why? Because now everyone across the country is getting the exact same "local" stimulation, while the nation as a whole is sharing the burden of the costs.

Quote:
Sec of Ag wrote:
We're now working with them to make sure the people who are eligible get the benefits and that will help stimulate their local economy.

But great job not understanding what "context" is and then making yourself look more foolish by doubling down on it.


Context is that he's talking about a federal program with federal funding paid for by federal level taxes. Thus, the costs affect the "overall economy", no matter how you slice it. And if you apply the same "local stimulus" to everywhere in the country, how is that not an effect on the "overall economy"?


Seems to me like you are clinging to the fact that he used the word "local" in a sentence and not really noodling out that it doesn't change anything. No one's disputing the fact that the stores which receive the food stamp purchases benefit by receiving them, and that by extension each community with stores which do so will benefit as well. But you could only argue that this wasn't a claim about the overall economic benefits if the program was limited to local effects.


It's not though. He's applying something which he believes is stimulative in general to local areas which are "under performing". I'm not sure how you walk away from his earlier statement just because he later mentions the local economies. But then, this is you were talking about, so no amount of word twisting is out of the question!
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#85 Aug 18 2011 at 8:43 PM Rating: Good
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someproteinguy wrote:
Quote:
Why? I get that you've been told that this is bad, buy can you say why? To me, it's good for the private sector to pay down debt. It's not like when they do this that the money disappears. One of the bigger problems right now is that we have too much private debt (as you stated). By paying it off, it frees that capital to be lent out again.


Because I read an analysis like this that says consumer is 70% of the economy. I read others that say that 70% is an inflated number, etc. But it's usually still a pretty big chunk. My mind says the suppression of that much of the economy is bad and stuff.


Ok. But that's just saying that 70% of GDP is currently made up of consumption. It does not say that consumption creates greater GDP growth than investment does. In fact, if you read the whole thing, it clearly is arguing *against* consumption rates that high. It directly supports my argument that we should be paying down debt, and saving more money instead of spending every dime we earn. And the reason is that if we do this, we'll have more money in the long run.

It's one of those strange things. If you think about consumption over the course of your lifetime, you'll be able to consume more if you borrow less than the other way around. It's pretty obvious really. If you have $400 to spend each month after paying your necessary bills, you could just spend that $400 each month. Or, you could borrow as much money as possible on credit and spend a whole bunch right now. But once you do that, you're spending that $400 each month paying interest instead of buying more things. Over time, you'll lose out.


What's bizarre is that even if you assume that the Dems are right (which I don't), and consumption is more important than investment, their approach is completely wrong. Instead of borrowing money to increase spending today, they should be working with people to eliminate their debt so that they can spend more over time. Again, I could get into the ideological reasons for this, but that's a whole different topic. But as I said before, the Dems reasons for doing these things have nothing really to do with economics. Or, I should say that they use economics to achieve a different goal, not the other way around.

Quote:
I agree that the single best thing we can do in the long run is to pay off our private debt, basically for the reasons you list. It's bad and stuff. However...

Quote:
So while you may transfer X amount of dollars from one part of the economy to the other, which at best breaks you even, you may lose several times X dollars in money that actually does "leave the economy". It's really not worth it and it's more harmful than it helps. The solution is to *not* do that.


The point is to invest money in a way where you get a better return on investment then you were getting previously. Markets are usually pretty good at this, but they are far from perfect. You don't have to come out ahead to win, just less far behind then previously. Why not have the government invest the money in the economy? We made money in the bank bail out, so it's not like it's impossible.


Because the government will never do as good a job at this as the private market will. It's interesting that we hear that phrase "investing in the economy" applied to the government, and it alway struck me as completely non-sensical. It's one of those made up phrases that are used politically to make something seem like a good idea, but if you stop and think about it, it's meaningless.

How exactly does the government "invest in the economy"? Does it buy stocks? I think the problem here is that you have to understand that the government has no profit motive. Government's do not make money, they spend it. The very idea of a government "investing" in something (in a monetary sense) is absurd. You may as well just speak random gibberish. It would make just as much sense. The best way (the only way!) for the government to invest in the economy is for the government to take less money out of the hands of private investors and workers.


It's really that simple. Tax less. Or, barring that, don't tax more.

Quote:
Quote:
Again, you're unfortunately repeating completely false assumptions about economics.


Well I'd be on the lookout for these to continue. I'm a scientist not an economist. Smiley: wink


Oh, I don't blame you at all for this. There is so much just plain blatantly false and/or misleading statements being made out there all the time that is specifically designed to make people adopt false assumptions that it's not surprising at all. The example above is a common one. Just the repeated use of a phrase like "government investing in the economy (or economic growth)" makes one assume that government can actually do this. It can't, but the assumption most people would have is that people wouldn't say this if it wasn't true, right? Well... Don't believe what you hear.


Same thing with consumption. Democrats and their liberal mouthpieces in the media (who make up a large portion of most media btw), repeatedly use the assumptive argument to make the public accept the assumption. They don't argue that consumption will increase economic growth more than investment. Because if they do that, then they might have to actually argue that point. Instead they just insert that assumption into every argument about economics they can. For food stamps for example. You'll note that the AG secretary didn't argue why increased consumption is better for economic growth, or even that it is. He just stated that food stamp spending would create X dollars more in economic growth, followed by a statement that it's the most direct way to stimulate the economy.


What assumption would most people draw from that statement? You guessed it! That consumption is the best way to stimulate economic growth, and food stamps is the most direct way to increase that consumption. He didn't have to make either of those arguments. He just stated them as fact and moved on.

Quote:
For better or for worse I still vote (assuming I get re-registered Smiley: um) and fleshing out an opinion prior to doing that is fulfilling the least of my democratic obligations.



Good. Look at all sides though. There is a lot of just plain false stuff out there. Not out and out lies of course, but statements designed to get most people to adopt assumptions that aren't true. Don't make those assumptions and you'll be well on your way towards being a free thinking and informed individual.
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#86 Aug 18 2011 at 9:35 PM Rating: Excellent
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gbaji wrote:
Good. Look at all sides though. There is a lot of just plain false stuff out there. Not out and out lies of course, but statements designed to get most people to adopt assumptions that aren't true. Don't make those assumptions and you'll be well on your way towards being a free thinking and informed individual.


Don't worry I usually assume both sides are out to get me. Smiley: wink

Smiley: tinfoilhat
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#87 Aug 21 2011 at 10:33 AM Rating: Good
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It's really too bad that I don't have time to catch up on this thread, but the semester(s) is starting.

Quote:
You do realize you're wrong right? Not only is a job not required to get food stamps in California you don't even have to prove you're a legal citizen of this country.


Oooh, nice try, but in the future, it helps to be correct when you tell someone they're wrong. I said that you had to be actively looking for a job, not in possession of a job, and yes, that's true. Anyone who signs up for food stamps will be assigned to a social worker who ensures that they are either working the requisite number of hours/week, or ensures that they are actively pursuing work, usually be contacting employers that the person has applied with.

People who don't meet those requirements have their food stamps revoked, and if they're found to have been on food ineligibly, they are billed to pay back the amount they've spent. What with all of the conservatives **** all the time, you'd think it'd be obvious that the system is designed to minimize the potential for abuse... I guess you can thank them for those caveats.

Seems that you were wrong, in any case. ;/

gbaji wrote:
Peimei wrote:
ThiefX wrote:


Simple logic for a simple mind. Do you seriously not see the flaw in your argument?



Enlighten me!


It has something to do with the cost of the food stamps being paid via taxation by the store the food stamps are being used in. The store doesn't actually make any more money. Therefore, it can't afford to hire more people to put food on the shelves. You can use this to increase the volume of food flowing into the store and off the shelves, but you won't actually create any jobs this way. What will happen is that more work stocking shelves has to be done for the same cost (meaning that those who do have jobs have to work harder for the same relative pay). This makes jobs stocking shelves less attractive, and not having a job and getting free food via the stamps more attractive.

Surely, you can see that this will tend to have a negative effect on jobs, right?


Please tell me that after all that's been discussed between there and here, you've realized that this is not only wrong, but mathematically impossible. The store makes money. You could reasonably (but incorrectly) argue that the taxation required to pay the food stamps takes the same amount of money out of the system as it puts back in. Of course, that doesn't matter as long as more jobs are created, because the amount of money that moves through the system and the value of that money are completely different entities. Which is, gasp, what stimulus is.

It's sad to see that as much as you talk about the economy, you still don't understand that money doesn't have any inherent value and is merely a system of measurement. Food stamps give more fiscal power to the food industry, which is one of the more important industries to create jobs in. Otherwise we depend on that same job showing up in the smartphone market so people can have more **** apps, or other inessential markets that can't self-sustain their economic weight. Unfortunately the two scenarios there are 1) it won't, because in lean times people realize that they don't need that **** so the money lines CEO pockets instead of creating a job, or 2) it will create a job, and our economy engages in more unsustainable behaviors.

tl;dr- Your rhetoric is as unimpressive as ever, gbajo.
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Ok, now we're going to get slash fiction of Wint x Kachi somehere... rule 34 and all...

Never confuse your inference as the listener for an implication of the speaker.

Good games are subjective like good food is subjective. You're not going to seriously tell me that there's not a psychological basis for why pizza is great and lutefisk is revolting. The thing about subjectivity is that, as subjects go, humans actually have a great deal in common.
#88 Aug 22 2011 at 6:44 PM Rating: Default
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Kachi wrote:
It's really too bad that I don't have time to catch up on this thread, but the semester(s) is starting.

Quote:
You do realize you're wrong right? Not only is a job not required to get food stamps in California you don't even have to prove you're a legal citizen of this country.


Oooh, nice try, but in the future, it helps to be correct when you tell someone they're wrong. I said that you had to be actively looking for a job, not in possession of a job, and yes, that's true.


Or have some other factor which prevents you from working. Like say, a single mother raising a child. Or some disability (the definition of which has been stretched to almost ridiculous levels). It really isn't that hard to work the system. I'd assume that what Varus was talking about with regard to people here illegally is a reference to the whole "anchor baby" bit. Woman here illegally has a child. Child is now a US citizen, so it's hard to deport her. She collects welfare and food stamps because she needs to support the child. Ironically, the fact that she can't work legally actually assists her with this.

Remember when I posted links to articles talking about the percentage of total welfare assistance and food stamps in LA county which were identified as being given directly to support anchor babies? It's a sizable amount of the total IIRC. This is not a small factor. I'm not sure exactly how much of this comes from federal dollars, but the broad point that you don't have to be a citizen to get public assistance (like food stamps) is true.

Quote:
Anyone who signs up for food stamps will be assigned to a social worker who ensures that they are either working the requisite number of hours/week, or ensures that they are actively pursuing work, usually be contacting employers that the person has applied with.


Even that case is pretty easy to get around though. All that requires is that the person get someone at a business to sign a card stating that the person attempted to get a job. Which usually means that they take 5 minutes to fill out an application, and they're done. As I stated earlier, it's very common for people to do this and tell you not to call them. They don't want the job. They just want you to sign the card so that they can continue to collect their benefits.

Quote:
People who don't meet those requirements have their food stamps revoked, and if they're found to have been on food ineligibly, they are billed to pay back the amount they've spent. What with all of the conservatives **** all the time, you'd think it'd be obvious that the system is designed to minimize the potential for abuse... I guess you can thank them for those caveats.


It's better than it used to be. But it's still far too easy to game the system if you want to.

Quote:
gbaji wrote:
It has something to do with the cost of the food stamps being paid via taxation by the store the food stamps are being used in. The store doesn't actually make any more money. Therefore, it can't afford to hire more people to put food on the shelves. You can use this to increase the volume of food flowing into the store and off the shelves, but you won't actually create any jobs this way. What will happen is that more work stocking shelves has to be done for the same cost (meaning that those who do have jobs have to work harder for the same relative pay). This makes jobs stocking shelves less attractive, and not having a job and getting free food via the stamps more attractive.

Surely, you can see that this will tend to have a negative effect on jobs, right?


Please tell me that after all that's been discussed between there and here, you've realized that this is not only wrong, but mathematically impossible. The store makes money. You could reasonably (but incorrectly) argue that the taxation required to pay the food stamps takes the same amount of money out of the system as it puts back in.


Which, as I explained in later posts after this exact point was made, was what I was trying to say. I used "the store" as an analogy for the economy in general. I've used that analogy in the past, and figured people would realize what I was talking about, but apparently I was wrong. Sorry for the confusion. That specific store suffers a small loss but gets increased sales. It'll make more money, but every other store suffers that same small loss and gets nothing in return. The effect on the whole is zero.

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Of course, that doesn't matter as long as more jobs are created, because the amount of money that moves through the system and the value of that money are completely different entities. Which is, gasp, what stimulus is.


But more jobs aren't going to be created. That's the problem. For every job that might be created at a grocery store (since that's the only part of the economy you are stimulating with this), a job will be lost somewhere else by all the other stores and businesses which paid for that increase in food stamps without gaining anything in return.

Unless for some reason the sole problem with the economy exists in grocery stores, this isn't a form of stimulus that actually benefits us.

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It's sad to see that as much as you talk about the economy, you still don't understand that money doesn't have any inherent value and is merely a system of measurement.


I've said this several times in this very thread. I do understand this. I suspect that many other posters don't fully understand it. It's not enough to just declare that money is just a system of measurement and hand wave away what you're doing. Any system of measurement has to be measuring something. In this case, money is a measurement of productive output. Specifically it measures goods or services given to others in excess of those taken for oneself.

As I've said repeatedly, you break this when you start transferring money around as though it has inherent value of its own. It doesn't.

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Food stamps give more fiscal power to the food industry, which is one of the more important industries to create jobs in.


No. Actually the exact opposite is true. Not the first part, but the second. If you study the history of man, you'll find that economic gain and prosperity has always been achieved when societies figure out ways to consume less labor while producing sufficient food for their population. As we increase the efficiency of the subsistence labors, we free up labor to do other things. The relative comfort of our modern lives directly rests on this fact.

The idea that by increasing the number of people working in the food industry somehow benefits us economically is incredibly backwards. Let me be clear: Providing food stamps to people so that they don't starve is a good thing to do from a purely social perspective. Providing food stamps to people so that you'll increase jobs in the food industry at the expense of jobs in other industries is horrible from an economic perspective.

It's the opposite of that which produces prosperity.

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Otherwise we depend on that same job showing up in the smartphone market so people can have more bullsh*t apps, or other inessential markets that can't self-sustain their economic weight.


Except that those things (or the historical analogies of those things) are why you don't live in a simple shack and spend your entire workday in a field growing rice or wheat or handling a herd of animals. It's the process of freeing up labor to do non-subsistence things that creates prosperity and improves standard of living. Nothing else does. Nothing else ever has.
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#89 Aug 22 2011 at 8:24 PM Rating: Excellent
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Ok, I guess I don't know anything about this, but I'm truly confused. Isn't any economy pretty much "money moving from one spot to another"? I mean, if I get paid, that money doesn't come from a tree, it comes from my employer, and my employer got it from customers, who got it from their jobs, who got it from banks, who got it from customers...

What am I missing? Why is money circulating like this a bad thing?
#90 Aug 22 2011 at 10:09 PM Rating: Good
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Nadenu wrote:
Ok, I guess I don't know anything about this, but I'm truly confused. Isn't any economy pretty much "money moving from one spot to another"?


Because money is a placeholder for goods and services. A healthy and growing economy is one in which goods and services are being exchanged constantly. Money just facilitates it.

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I mean, if I get paid, that money doesn't come from a tree, it comes from my employer, and my employer got it from customers, who got it from their jobs, who got it from banks, who got it from customers...

What am I missing? Why is money circulating like this a bad thing?


when we make the mistake of assuming that it's the circulation of money which creates economic growth and not the constant exchange of goods and services. It's like making note that when people are swimming across a pool quickly they create more waves and concluding that if you simply create the waves, it'll mean that more people are swimming across the pool.

What some liberals mistakenly do is take Keynesian economic formula which correctly show the interactive effects of various changes in monetary exchanges and forget that those effects are based on those exchanges being the result of "real" exchanges of goods/services. They then conclude that if we create the symptoms of those exchanges that this will have the same resulting effect. But economics is a feedback loop (a whole lot of them). A cause creates an effect, which in turn *may* amplify the original cause in some way. When we speak about gaining more effect than we spent, we're talking about that effect. However, it only works if the initial cause was "real".

If we have greater employment, so that more people are producing output with their labor, so that their employers will pay them, which they then take to the stores and buy things with, this will create economic growth among all the stores, resulting in more people being employed, and more productive labor, which results in more potential consumption dollars, and you get that $1.84 of growth for every extra dollar spent in the initial state.

But if we have no initial increase in employment, then there is no increase in productive labor output. Simply handing people money to spend in the stores isn't going to create the same amplified effect. I know that this is hard to understand (and it's kinda hard to explain in simple terms too!), but it's a very real factor. Labors value is not in what it gets paid, but what it produces. Wages are only going to have real effects on the economy if they are placed at correct relative valuation to the value of that labor to their employers, which in turn is going to be relative to the value of that labors production to the consumers of the products themselves. Mess with those relationships, and you mess with the feedback effect in the loop.



The easiest way to look at this is an explanation I think I've already given in this thread. The whole economic pie is equal to the total value (subjective to be sure) of all the goods and services produced within the economy (GDP if you want a simple valuation). If you earn X dollars in a free labor market, it means you had to have added at least X to that whole economic pie. Thus, when you spend those dollars, there is a net growth effect from your transfer.

Another way to look at is is that you create X dollars worth of "potential" economic valuation when you perform your labor, but in order for that valuation to be "realized" by the economy, someone has to consume the fruits of your labors. If you think about this, it makes sense. Your boss isn't going to pay you for very long to make widgets if no one wants to buy widgets at a price sufficient to pay you for making them. When you spend the money you made buying something in a store, you are then consuming the fruit of someone else's labor, and thus "realizing" that valuation as well. Each step in this process increases or decreases the relative size of the economic pie (depending on the economic activity rate relative to past rates, which gets complicated).


The point being that it's a mistake to look just at the act of consumption as "realizing" that valuation. You have to have a corresponding actual labor output to create that potential economic growth in the first place. Another way to look at it is like labor output being in the form of making new batteries, while money transfers are like charging the batteries. You have to have enough batteries to take all the charging you're doing in order to increase the total number of fully charged batteries (this isn't a great analogy, but it kinda gets this part across). What the Dems are proposing is equivalent to thinking that by draining one battery to fill another that this will increase the total amount of fully charged batteries available. It wont. But they've made the mistake of thinking that filling the batteries is what increases the total number of fully charged batteries. They've forgotten that somewhere along the line you have to actually make the batteries to fill as well.


Not sure if I can come up with more analogies. Obviously, none of them are going to be perfect, but maybe one of them will spark some understanding of this issue. You have to have both "sides" of the economic equation operating in tandem to have real economic growth. Artificially increasing the number of things purchased doesn't work. You have to have an equivalent increase in the number of things being made. But money for buying without the labor behind it breaks that relationship.
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