Jiggyfly
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http://www.economy.com/mark-zandi/documents/Stimulus-Impact-2008.pdfExactly what I was getting at in my longer post. Production of things increases our wealth, which is what grows the economy.
The entire concept of Keynesian economics is based on the idea that wealth (in the form of dollars) has stagnated in the bank accounts of the rich people and it proposes to "get things moving" by re-distributing it to areas where it will be put back into motion. So they tax the rich, and it becomes government money. The government, under FDR when this concept was getting popular, would sometimes even just pay people to do nothing jobs, like dig ditches and fill them back up. The poor person would collect a paycheck. Then he'd spend the money on the basic necessities he needed to live (food, shelter).
What a charitable thing. Except... oops... now that he just paid his landlord, who is rich, guess where the money is? In the landlord's bank account again. What happened in this whole transaction? A ditch was built and then filled back up. We are literally in the same exact spot as before the taxation. Which is why Keynesianism is a colossal failure as an economy GROWER an only ever works in a time of plenty on the back of actual economic growth that happened before it's policies were implemented.
In order to be wealthy, we have to have an excess of the things that we need. If the government was really interested in eliminating poverty, it would push something that could generate a production of things, which could then be sold for profit. If a plant opened, and all those people went to work making a widget, then we'd have a lot of production of widgets that we could sell to increase our wealth. As I said before, the wealth comes from the combination of labor with natural resources to create something that is better than the resource was in it's natural state. The more production (ie the more people producing things) the better we will be.
http://money.cnn.com/2008/01/29/news/economy/stimulus_analysis/When Moody’s Analytics assessed different forms of stimulus, it found that food stamps were the most effective, increasing economic activity by $1.73 for every dollar spent. Unemployment insurance came in second, at $1.62, whereas most tax cuts yielded a dollar or less. All the talk in Washington these days, however, is of cutbacks—even for the hungry.
.Tracking that single dollar spent through the economic chain shows what economists call the ripple effect, Zandi said. For example, that dollar spent at the grocery store in turn helps to pay the salaries of the grocery clerks, pays the truckers who haul the food and produce cross-country, and finally goes to the farmer who grows the crops
Its pretty simple these stores are not giving the food away they are being reimbursed and that money goes to there bottom line which shows up as profit thereby contributing to the economy.
I am not advocating stimulus spending overall just stating that taking food stamp money away from retailers would affect profits substantially.
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