The thing is, people try to sell tax cuts for the wealthy as beneficial to the economy, but dollar-for-dollar, benefit programs like food stamps generate more economic activity.
EDIT: A bit of clarification. Specifically I'm talking about an economic multiplier. The SNAP program or "food stamps" has been shown to have an economic multiplier as high as 1.79, meaning that one dollar of investment in food stamps results in $1.79 worth of economic activity. Or, $1 billion in food stamps adds $1.79 billion to GDP. Contrast that with the multiplier for tax cuts which is usually calculated as less than 1. In fact, a dollar of tax cuts can have as low an impact as 30 cents of economic activity.
If you think about it, it does make sense. There's a principle in economics called the "marginal propensity to save." More wealthy individuals and households are more likely to be able to save. Poorer households do not have the opportunity to save. Food stamps are guaranteed economic activity - the money goes to the store, who uses it to pay their employees, etc. Whereas tax cuts on the wealthy are likely to end up as savings, which don't really do a lot of moving through the economy.
TL;DR: Rich people can save money, poor people can't. So giving poor people things like food stamps generates more economic activity than cutting taxes on the wealthy.
lCraxisl on June 5th, 2018 at 13:50 UTC »
Those 8 dudes have a monopoly on “bootstraps”
DrMux on June 5th, 2018 at 14:17 UTC »
The thing is, people try to sell tax cuts for the wealthy as beneficial to the economy, but dollar-for-dollar, benefit programs like food stamps generate more economic activity.
EDIT: A bit of clarification. Specifically I'm talking about an economic multiplier. The SNAP program or "food stamps" has been shown to have an economic multiplier as high as 1.79, meaning that one dollar of investment in food stamps results in $1.79 worth of economic activity. Or, $1 billion in food stamps adds $1.79 billion to GDP. Contrast that with the multiplier for tax cuts which is usually calculated as less than 1. In fact, a dollar of tax cuts can have as low an impact as 30 cents of economic activity.
If you think about it, it does make sense. There's a principle in economics called the "marginal propensity to save." More wealthy individuals and households are more likely to be able to save. Poorer households do not have the opportunity to save. Food stamps are guaranteed economic activity - the money goes to the store, who uses it to pay their employees, etc. Whereas tax cuts on the wealthy are likely to end up as savings, which don't really do a lot of moving through the economy.
TL;DR: Rich people can save money, poor people can't. So giving poor people things like food stamps generates more economic activity than cutting taxes on the wealthy.
L43 on June 5th, 2018 at 14:44 UTC »
But the foodstamp guy is the reason I'm not the 9th!!!