over the years we've talked many times
Louis about the stimulative effect
love food stamps %uh infrastructure
spending and the lack of stimulus that's
provided by things like tax cuts for the
rich in corporate tax cuts
and there's a really great graphic out
that actually
basically ranks the stimulative effect
the multiplier effect
have different types up government
spending and
it shows as predicted as we have known
for a really long time
that food stamps are five times more
stimulative
than a corporate tax cut so when we look
at the multiplier effect what we're
talking about is for every dollar spent
by the government on a particular
programmer in a particular way
how many times does that dollar recycle
through the economy
in order to create more or possibly less
than a dollar
up stimulus if you look at food stamps
let's think about a food stamp
who get who gets food stamps people who
qualify for
help based on their income which means
they really need that money which means
essentially
all love the foods that money is going
to be spent further
food stamp money goes to a grocery store
some other food retailer
and then of course that retailer needs
to buy
from their suppliers food to keep up
with the increased demand from food
stamps
and the supplier needs presumably to buy
more raw ingredients from farms
and you can see how there's a direct
stimulus effect counter that for example
with tax cuts for the rich tax cuts for
the rich
are not money that the those people need
that's why they're the rich
so that's it's not money that's going to
be spent in fact typically the money is
saved in recently
the rich have been saving in record
record proportion
doesn't have a stimulative affect so
when we look at this food stamps are
five times more stimulative
than a corporate tax cut they are around
equally stimulative around five times
more stimulative been tax cuts for the
rich
almost as good as food stamp spending in
terms of the effect on the economy
is the extension %uh unemployment
insurance benefits
exact same logic if you're out of a job
and you qualify for unemployment
you probably need that money meaning
you'll spend most a bit rather
than saving it this is all obvious
economists and laypeople all over the
world
understand this in majority and for some
reason here in the US Louis
we still have a few huge portion of
people and economists who claim
that the reality is otherwise who who
dis
don't seem to get rights I love how a
lot of people think that this is just
money that disappears
I mean yet how often do we hear from
the small businesses that receive food
stamps that that they don't want to take
them anymore
very rarely you you hear that incredibly
rarely ate end and
again remember if people needed to spend
the money that the government is
providing
that gives you stimulus if people don't
spend that money
you don't get economic stimulus so just
a basic
basic logic test let this very easily
figure out what type of government
spending
benefits the economy
