Economic question about unemployment benefits

Discussion in 'Economy' started by Doctor_X, Dec 11, 2010.

  1. Doctor_X
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    Doctor_X Rookie

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    Hi all, I just have a quick question.

    A lot of people have been saying that unemployment benefits help stimulate the economy. Mark Zandi, Chief Economist of Moody's, has gone on record as saying that $1.00 spent on food stamps actually adds $1.73 to GDP. As far as I can tell from what I've read, the claim that unemployment benefits and food stamps adds to the GDP is uncontroversial.

    My question is where does that extra wealth come from? How does government spending, targeted toward the unemployed, actually create this extra $0.73?

    Thanks in advance.
     
  2. Revere
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    It comes from the taxes of people who aren't even born yet.
     
  3. Doctor_X
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    Doctor_X Rookie

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    Thanks Revere. I must admit (and shold have stated in my OP), that my economic knowledge is rudimentary at best. Could I trouble you to please flesh out your response a little more? Preferably in terminology suitable for a kindergartener? :)
     
  4. Truthmatters
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    No its based in sound economic principles.

    People spend every dime of this type of stimulus (they have to to survive).

    That in turn creates a demand which business fills by employing others to fill the need then these people also pay taxes.

    Its simple and PROVEN by history and these studies have repeted the same results every time they are done.

    Only idiot hacks who care more about party and failed ideas than they do country and countrymen believe that somehow if you give rich people a tax cut they will ruszh out to creat jobs for which there is no demand and lose their asses in the process.

    Fucking stupid assed propaganda by the wealthy so they can keep the masses desperate and control the world.
     
  5. Truthmatters
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    Hes a fucking hack who never responds to REAL facts and just pulls shit out of his ass as if its gospel.
     
  6. Revere
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    You need a massive, government sponsored population of poor people.

    Does that sound like prosperity?
     
  7. Revere
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    You're "desperate" and "controlled" if you're told you're better collecting a stipend for being unemployed.
     
  8. Intense
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    Intense Senior Member

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    I believe too that the stores get rewarded for taking food stamps. Of course it's Federal money they are rewarded with, from the already allocated Food Stamp Budget. Sneaky... Sneaky... The money in their pocket trickles down when they spend it. ;) :lol:
     
  9. Quantum Windbag
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    It comes from people's imagination. If food stamps actually returned $1.73 for every dollar spent the government would be running it, Moody's would be investing in it and making rich people richer.
     
  10. PoliticalChic
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    PoliticalChic Diamond Member

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    Welcome to the board.

    1. First, the truth about economists:

    When Albert Einstein died, he met three New Zealanders in the queue outside the Pearly Gates. To pass the time, he asked what were their IQs. The first replied 190. "Wonderful," exclaimed Einstein. "We can discuss the contribution made by Ernest Rutherford to atomic physics and my theory of general relativity". The second answered 150. "Good," said Einstein. "I look forward to discussing the role of New Zealand's nuclear-free legislation in the quest for world peace". The third New Zealander mumbled 50. Einstein paused, and then asked, "So what is your forecast for the budget deficit next year?" —The Economist, June 13th 1992, p. 71).


    2. Rather than thinking about whether or not unemployment payments are economically stimulative, think about what it says about the human spirit, the basis of our nation's exceptionalism: reliance on other than oneself.

    When you see that trading is done, not by consent, but by compulsion - when you see that in order to produce, you need to obtain permission from men who produce nothing - when you see that money is flowing to those who deal, not in goods, but in favors - when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you - when you see corruption being rewarded and honesty becoming a self-sacrifice - you may know that your society is doomed. -- Ayn Rand (1905-1982) Author
    Source: Atlas Shrugged, Francisco's "Money Speech"

    3. Be aware, that about a third of folks find work shortly after their unemployment benefits run out, and that the most successful recession fighter, Waren G. Harding, had government do nothing and the recession was over in a year: folks had to take jobs.
     
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    Last edited: Dec 11, 2010

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