Hoyer: Food Stamps, Unemployment Insurance 2 'Most Stimulative' Things for Economy

[GuyPinestra]

Yes it does, lern sum economics.

Learn some common sense, moron. Did it suddenly clone itself in the till of the shopkeeper? No matter how many times a dollar gets spent, it's still just a dollar. Rube.

Will someone explain to this person how the private sector creates large amounts of money out of thin air? It sounds crazy, I know, but it actually happens, all it takes is for someone to put money in the bank.

So now you want to school me on fractional reserve banking?

More of that Keynesian hocus-pocus with fiat currency and the Fed?

How's that working out so far, Ace?

 

[hortysir]

Nobody is advocating giving money to rich people.
You are framing your point of reference incorrectly with the statement you made.

Last year, I went on 3 vacations. Each one of those vacations involved me supporting the airline industry, the hotel industry, the cab, limo or car rental industry, the restaurant industry, and some other sort of entertainment industry. Now suppose the government decides I need to pay more in taxes so that poor people can have EBT. With that EBT, they will support the grocery (and indirectly, the farming) industry. When I eat out (while on vacation), I'm also supporting those same industries. Take that money from me though, and all the other industries I mentioned above are no longer getting economic benefit. The economy isn't actually being stimulated, it was just depressed by taking money from me.

The key distinction (in evaluating economic multipliers) between the average person who takes frequent vacations and the average recipient of food stamps is not (I believe) what they spend their money on, but how much money they spend. Food stamps are nearly always spent. Middle class after-tax income is often saved. This necessarily reduces its stimulative effect. Again, that doesn't mean that you shouldn't save, only that choosing to save money for later will tend to shift economic activity away from the current economy and to future economies.

You've shifted your claims about talking to claims about advocacy. The first post asked for analysis, not advocacy. I've tried to give my explanation of Hoyer's thinking (with which, in this respect, I agree) rather than to advocate for any policy. As I noted in my first post, the most stimulative policy is not necessarily the best one.

No one is saving anymore, though, Lady.

How long does it take, on average for grocery stores and suppliers to get paid from EBT use?
It can't be faster than cash.

Also, in most states, food is exempt from sales tax.
EBT can only be used for food.

Earned money will be spent on any number of things, thus providing state revenue

 

[alan1]

Nobody is advocating giving money to rich people.
You are framing your point of reference incorrectly with the statement you made.

Last year, I went on 3 vacations. Each one of those vacations involved me supporting the airline industry, the hotel industry, the cab, limo or car rental industry, the restaurant industry, and some other sort of entertainment industry. Now suppose the government decides I need to pay more in taxes so that poor people can have EBT. With that EBT, they will support the grocery (and indirectly, the farming) industry. When I eat out (while on vacation), I'm also supporting those same industries. Take that money from me though, and all the other industries I mentioned above are no longer getting economic benefit. The economy isn't actually being stimulated, it was just depressed by taking money from me.

The key distinction (in evaluating economic multipliers) between the average person who takes frequent vacations and the average recipient of food stamps is not (I believe) what they spend their money on, but how much money they spend. Food stamps are nearly always spent. Middle class after-tax income is often saved. This necessarily reduces its stimulative effect. Again, that doesn't mean that you shouldn't save, only that choosing to save money for later will tend to shift economic activity away from the current economy and to future economies.

You've shifted your claims about talking to claims about advocacy. The first post asked for analysis, not advocacy. I've tried to give my explanation of Hoyer's thinking (with which, in this respect, I agree) rather than to advocate for any policy. As I noted in my first post, the most stimulative policy is not necessarily the best one.

I haven't shifted anything.
You said, "The short answer is that giving money to poor people is more stimulative than giving money to rich people". Nobody said anything about giving money to rich people. Again, it was an incorrect frame of reference for you to use. I merely added my situational spending into the mix. Just like the broken window fallacy, taking from me and giving to somebody else does not stimulate the economy, it only shifts where those dollars are spent, and potentially reduces other dollars from being spent. Should I fly someplace, rent a car and a hotel, or should i just drive a few miles and eliminate the airfare and rental car? Guess which action is more stimulative to the economy?

 

[occupied]

Learn some common sense, moron. Did it suddenly clone itself in the till of the shopkeeper? No matter how many times a dollar gets spent, it's still just a dollar. Rube.

Will someone explain to this person how the private sector creates large amounts of money out of thin air? It sounds crazy, I know, but it actually happens, all it takes is for someone to put money in the bank.

So now you want to school me on fractional reserve banking?

More of that Keynesian hocus-pocus with fiat currency and the Fed?

How's that working out so far, Ace?

Working just fine, it would work even better if so much of that money did not end up locked up in vast wealth hoards never to see the wallet of a working man again.

 

[onecut39]

No matter what your feelings on foodstamps and unemployment it is correct that they have the most immediate stimulative effect on the economy, not to mention that the country's food industry would crash without them.

Quite so. Economically speaking unemployment compensation has a multiplier of about 1.5, tax cuts come in at about .6.

Simply speaking tax cuts do not pay for themselves.

We hate to admit that but it is true.

 

[GuyPinestra]

Will someone explain to this person how the private sector creates large amounts of money out of thin air? It sounds crazy, I know, but it actually happens, all it takes is for someone to put money in the bank.

So now you want to school me on fractional reserve banking?

More of that Keynesian hocus-pocus with fiat currency and the Fed?

How's that working out so far, Ace?

Working just fine, it would work even better if so much of that money did not end up locked up in vast wealth hoards never to see the wallet of a working man again.

Yeah sure, Buddy....

 

[Moonglow]

devaluation of the dollar is expected to compete with our trade deficit.

 

[onecut39]

Yes it does, lern sum economics.

Learn some common sense, moron. Did it suddenly clone itself in the till of the shopkeeper? No matter how many times a dollar gets spent, it's still just a dollar. Rube.

Will someone explain to this person how the private sector creates large amounts of money out of thin air? It sounds crazy, I know, but it actually happens, all it takes is for someone to put money in the bank.

Putting money in the bank creates almost nothing. You haven't been paying attention. If putting money in the actually did create jobs we would be awash in them.

The rich in this country have about 3 trillion bucks laying in fallow accounts that are doing absolutely nothing. Business too is awash in cash to the tune of about 2 trillion bucks. They aren't doing much with that either.

Consumers account for about 70% of our economic activity. The middle class generates most of this. Take away their buying power with lower wages and higher prices and this is what you get.

Enjoying it?

 

[ladyliberal]

Nobody is advocating giving money to rich people.
You are framing your point of reference incorrectly with the statement you made.

Last year, I went on 3 vacations. Each one of those vacations involved me supporting the airline industry, the hotel industry, the cab, limo or car rental industry, the restaurant industry, and some other sort of entertainment industry. Now suppose the government decides I need to pay more in taxes so that poor people can have EBT. With that EBT, they will support the grocery (and indirectly, the farming) industry. When I eat out (while on vacation), I'm also supporting those same industries. Take that money from me though, and all the other industries I mentioned above are no longer getting economic benefit. The economy isn't actually being stimulated, it was just depressed by taking money from me.

The key distinction (in evaluating economic multipliers) between the average person who takes frequent vacations and the average recipient of food stamps is not (I believe) what they spend their money on, but how much money they spend. Food stamps are nearly always spent. Middle class after-tax income is often saved. This necessarily reduces its stimulative effect. Again, that doesn't mean that you shouldn't save, only that choosing to save money for later will tend to shift economic activity away from the current economy and to future economies.

You've shifted your claims about talking to claims about advocacy. The first post asked for analysis, not advocacy. I've tried to give my explanation of Hoyer's thinking (with which, in this respect, I agree) rather than to advocate for any policy. As I noted in my first post, the most stimulative policy is not necessarily the best one.

No one is saving anymore, though, Lady.

How long does it take, on average for grocery stores and suppliers to get paid from EBT use?
It can't be faster than cash.

Also, in most states, food is exempt from sales tax.
EBT can only be used for food.

Earned money will be spent on any number of things, thus providing state revenue

While the current savings rate is fairly low, it is certainly not zero (http://www.nytimes.com/2011/10/29/business/americans-savings-rate-drops-again-puzzling-experts.html) and within some sectors it is relatively high. I agree that differences in savings alone cannot account for the difference in economic multipliers. As I mentioned, the true story is much more complicated.

I am unfamiliar with the mechanics of EBT, but I believe your description is wrong in a few places. You say that EBT cannot be faster than cash (a factor that plays very little, if any, role in determining the associated economic multiplier). But apparently EBT is automatically credited to a store electronically seconds after a card is swiped. It is then available to the store much faster than they could empty cash from their registers. Further, while EBT is used for SNAP, which can only be used for food, it is also used for other government benefits which can be spent on anything. (Electronic Benefit Transfer - Wikipedia, the free encyclopedia).

You mention that food purchases are often untaxed. I agree, but I don't see why this is a problem from a stimulus perspective. After all, taxes discourage transactions, and so tax-exemptions (such as the food exemption) should only encourage food purchases and therefore increase their stimulative effect.

 

[occupied]

So now you want to school me on fractional reserve banking?

More of that Keynesian hocus-pocus with fiat currency and the Fed?

How's that working out so far, Ace?

Working just fine, it would work even better if so much of that money did not end up locked up in vast wealth hoards never to see the wallet of a working man again.

Yeah sure, Buddy....

Looking at that it would seem the country has been in decline since then, how did we build such a great nation with such a worthless currency? Why are you distracting from what was a very simple and non-partisan observation of how our economy works? It may be flawed but it is what we have and no amount of discussion of economic philosophy will ever get us back on the precious metals as money which happen to be just as arbitrary and subject to crashes as any basis of monetary value.

 

[hortysir]

The key distinction (in evaluating economic multipliers) between the average person who takes frequent vacations and the average recipient of food stamps is not (I believe) what they spend their money on, but how much money they spend. Food stamps are nearly always spent. Middle class after-tax income is often saved. This necessarily reduces its stimulative effect. Again, that doesn't mean that you shouldn't save, only that choosing to save money for later will tend to shift economic activity away from the current economy and to future economies.

You've shifted your claims about talking to claims about advocacy. The first post asked for analysis, not advocacy. I've tried to give my explanation of Hoyer's thinking (with which, in this respect, I agree) rather than to advocate for any policy. As I noted in my first post, the most stimulative policy is not necessarily the best one.

No one is saving anymore, though, Lady.

How long does it take, on average for grocery stores and suppliers to get paid from EBT use?
It can't be faster than cash.

Also, in most states, food is exempt from sales tax.
EBT can only be used for food.

Earned money will be spent on any number of things, thus providing state revenue

While the current savings rate is fairly low, it is certainly not zero (http://www.nytimes.com/2011/10/29/business/americans-savings-rate-drops-again-puzzling-experts.html) and within some sectors it is relatively high. I agree that differences in savings alone cannot account for the difference in economic multipliers. As I mentioned, the true story is much more complicated.

I am unfamiliar with the mechanics of EBT, but I believe your description is wrong in a few places. You say that EBT cannot be faster than cash (a factor that plays very little, if any, role in determining the associated economic multiplier). But apparently EBT is automatically credited to a store electronically seconds after a card is swiped. It is then available to the store much faster than they could empty cash from their registers. Further, while EBT is used for SNAP, which can only be used for food, it is also used for other government benefits which can be spent on anything. (Electronic Benefit Transfer - Wikipedia, the free encyclopedia).

You mention that food purchases are often untaxed. I agree, but I don't see why this is a problem from a stimulus perspective. After all, taxes discourage transactions, and so tax-exemptions (such as the food exemption) should only encourage food purchases and therefore increase their stimulative effect.

I'll sit down and shut up.
I am nowhere near as versed in economics.

I just can't fathom how keeping our citizens dependent on government is stimulative

 

[Listening]

You don't understand how allowing lower and middle class people to retain more of their money and be taxed less will stimulate the economy? Alright, let me explain it to you from the beginning. This is a penny. If you have 100 pennies, you will have a dollar....

Where do you think the money comes from, Lucky the Leprechaun?

Yes, the whole idea of "stimulating" the economy" with the group that takes accounts for less than 5% of spending.

Where do those dollars come from ?

Why is this so hard for the left to understand ?

 

[Steelplate]

Hoyer: Food Stamps, Unemployment Insurance 2 'Most Stimulative' Things for Economy
CNSNews ^
Hoyer: Food Stamps, Unemployment Insurance 2 'Most Stimulative' Things for Economy | CNSNews.com


Hoyer: Food Stamps, Unemployment Insurance 2 'Most Stimulative' Things for Economy By Elizabeth Harrington July 17, 2012

(CNSNews.com) – House Minority Whip Steny Hoyer (D-Md.) said Tuesday that food stamps and unemployment insurance are the two "most stimulative" t things you can do for the economy.

During a pen and pad briefing with reporters on Capitol Hill, Hoyer was asked if any Democrats are “reconsidering the wisdom” of letting the Bush tax cuts expire at year’s end for the top income earners given the still struggling U.S. economy.

"I haven’t talked to any who are of that mind," said Hoyer. "If you talk to economists, they will tell you there are two things that are the most stimulative that you can do -- one’s unemployment insurance, the other’s food stamps, okay?”

“Why is that?” he said. “Because those folks who receive those resources must spend them. And they’ll spend them almost upon receipt. Most economists with whom I talk believe that those with significant discretionary income, that that’s not the case.”

Unless action is taken by Congress, the Bush tax cuts will expire on Jan. 1, 2013. Originally enacted in 2001 and 2003, President Barack Obama and Congress renewed the cuts for all income-brackets for two years in 2010.

Obama and the Democrats are now proposing that the rates be extended for one more year, until the end of 2013, for people earning less than $250,000 a year, while Republicans want the rates extended for people in all income brackets.

----

I honestly do NOT understand how giving free stuff to people=stimulative for economic growth. Money doesn't grow on tree's...It is made through growing the economic pie. Growing the size of the economy through building businesses and growing wealth of all the classes does.

I wish to learn your reasoning to why you believe this my friends on the left. Is this really sound economics?

unfortunately, he's probably right. I f the private sector won't play ball with the American people, Then the public has little choice. Unless we really want to get crazy and just let people starve...which I'm not into.

 

[Murf76]

NOTHING that Obama does will actually work to stimulate the economy. The only thing that will bring this economy back is his removal from office.

Under a positive, business-friendly leader like Reagan, stimulus worked pretty well. But the hidden elements of Keynesian economics are stability and consumer confidence. So, yeah... under the right circumstances, food stamps and unemployment checks could be "stimulative". But Hoyer is an IDIOT for not recognizing that his party and it's FAILED LEADER have undermined their efforts with threats of higher taxation, onerous regulations, a gargantuan new entitlement, and national debt spinning out of control. That debt isn't just numbers on a balance sheet. It represents MASSIVE interest payments, a cool trillion ANNUALLY by the end of the decade on our current path.

 

[GuyPinestra]

Learn some common sense, moron. Did it suddenly clone itself in the till of the shopkeeper? No matter how many times a dollar gets spent, it's still just a dollar. Rube.

Will someone explain to this person how the private sector creates large amounts of money out of thin air? It sounds crazy, I know, but it actually happens, all it takes is for someone to put money in the bank.

Putting money in the bank creates almost nothing. You haven't been paying attention. If putting money in the actually did create jobs we would be awash in them.

The rich in this country have about 3 trillion bucks laying in fallow accounts that are doing absolutely nothing. Business too is awash in cash to the tune of about 2 trillion bucks. They aren't doing much with that either.

Consumers account for about 70% of our economic activity. The middle class generates most of this. Take away their buying power with lower wages and higher prices and this is what you get.

Enjoying it?

Not often we agree, but I'm not afraid to say so when we do.

That squirrelly old fart from Texas was right 20 years ago...

[ame=http://www.youtube.com/watch?v=Rkgx1C_S6ls]Giant Sucking Sound - Ross Perot 1992 Presidential Debate.flv - YouTube[/ame]

 

[tjvh]

Really? Give the lazy more of the working class's Tax money to "stimulate" the economy? Some of you are really NUTS.

 

[salem.hills]

Exactly murf any little help our tax dollars give by being spent with the public is immediately lost and become a major problem when nobody invests because of obamacare and higher tax threats looming. Besides only novices actually think Obama is in this for any other reason besides ideology change he laughs at us : [ame=http://www.youtube.com/watch?v=03v2Oq9NRC4]Live Mistake - OBAMA LAUGHS AT and SHOWS DISRESPECT to U.S. CITIZENS - YouTube[/ame]

 

[GuyPinestra]

Working just fine, it would work even better if so much of that money did not end up locked up in vast wealth hoards never to see the wallet of a working man again.

Yeah sure, Buddy....

Looking at that it would seem the country has been in decline since then, how did we build such a great nation with such a worthless currency? Why are you distracting from what was a very simple and non-partisan observation of how our economy works? It may be flawed but it is what we have and no amount of discussion of economic philosophy will ever get us back on the precious metals as money which happen to be just as arbitrary and subject to crashes as any basis of monetary value.

Distracting? I'd say you talking out of both sides of your face is distracting. First you want to say that putting money in the bank 'creates' money, then you want to say the economy would be better if "so much of that money did not end up locked up in vast wealth hoards never to see the wallet of a working man again."

You go to the 2-for-1 buffet to feed both of those faces?

And now you want to tell me some shit about bullion-based money? Here, let me give you a more comprehensive illustration...

http://www.zerohedge.com/sites/default/files/images/SeanMaloneRiseFallDollarLarge.jpg

As far as 'crashes' are concerned, I'd rather have the ones that dropped us back to even then the ones that have erased 97% of our dollar's purchasing power over the last 100 years.

 

[Inthemiddle]

Where do you think the money comes from, Lucky the Leprechaun?

From the paychecks that people would be keeping larger portions of. C'mon, you're not this stupid.

And the things that the people who earn that money would spend it on are less stimulative to the economy in what way?

Er, I don't think you're understanding something here. Go back and re-read what I said from the beginning. You're saying exactly the same thing as I am.

 

[WillowTree]

Hoyer: Food Stamps, Unemployment Insurance 2 'Most Stimulative' Things for Economy
CNSNews ^
Hoyer: Food Stamps, Unemployment Insurance 2 'Most Stimulative' Things for Economy | CNSNews.com


Hoyer: Food Stamps, Unemployment Insurance 2 'Most Stimulative' Things for Economy By Elizabeth Harrington July 17, 2012

(CNSNews.com) – House Minority Whip Steny Hoyer (D-Md.) said Tuesday that food stamps and unemployment insurance are the two "most stimulative" t things you can do for the economy.

During a pen and pad briefing with reporters on Capitol Hill, Hoyer was asked if any Democrats are “reconsidering the wisdom” of letting the Bush tax cuts expire at year’s end for the top income earners given the still struggling U.S. economy.

"I haven’t talked to any who are of that mind," said Hoyer. "If you talk to economists, they will tell you there are two things that are the most stimulative that you can do -- one’s unemployment insurance, the other’s food stamps, okay?”

“Why is that?” he said. “Because those folks who receive those resources must spend them. And they’ll spend them almost upon receipt. Most economists with whom I talk believe that those with significant discretionary income, that that’s not the case.”

Unless action is taken by Congress, the Bush tax cuts will expire on Jan. 1, 2013. Originally enacted in 2001 and 2003, President Barack Obama and Congress renewed the cuts for all income-brackets for two years in 2010.

Obama and the Democrats are now proposing that the rates be extended for one more year, until the end of 2013, for people earning less than $250,000 a year, while Republicans want the rates extended for people in all income brackets.

----

I honestly do NOT understand how giving free stuff to people=stimulative for economic growth. Money doesn't grow on tree's...It is made through growing the economic pie. Growing the size of the economy through building businesses and growing wealth of all the classes does.

I wish to learn your reasoning to why you believe this my friends on the left. Is this really sound economics?

well gosh then steny send out food stamps to all 350 million Americans. at least half of us have paid for them.