Texas Senate approves drug testing for welfare

[Jiggyfly]

Exactly 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://www.economy.com/mark-zandi/documents/Stimulus-Impact-2008.pdf

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.

http://money.cnn.com/2008/01/29/news/economy/stimulus_analysis/

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.

 

[Jiggyfly]

http://online.wsj.com/article/SB124691958931402479.html

Boost in Food-Stamp Funding Percolates Through Economy
By ROGER THUROW and TIMOTHY W. MARTIN

DAVENPORT, Iowa -- The lush red strawberries caught the attention of Rachel Patrick, a mother of five shopping at a farmers market along the Mississippi River here. She selected two cartons and ignited a little-noticed chain reaction that is an important part of President Barack Obama's economic stimulus plan.

Ms. Patrick handed a plastic card loaded with her monthly food-stamp allocation to farmer Ed Kraklio Jr., who swiped it through his electronic reader. Mr. Kraklio now regularly takes in several hundred dollars a month from food-stamp sales, a vital new revenue stream that has allowed him to hire another assistant to help tend a cornucopia of fruits and vegetables. The new worker, in turn, spends her income in nearby stores, restaurants and gas stations.




The president's stimulus plan has been aimed primarily at the top of the economy, pumping money into banks and car companies and state and city governments. But it also has put more money into the hands of the poorest Americans by boosting monthly food-stamp allocations. Starting in April, a family of four on food stamps received an average of $80 extra.

Money from the program -- officially known as the Supplemental Nutrition Assistance Program -- percolates quickly through the economy. The U.S. Department of Agriculture calculates that for every $5 of food-stamp spending, there is $9.20 of total economic activity, as grocers and farmers pay their employees and suppliers, who in turn shop and pay their bills.

While other stimulus money has been slow to circulate, the food-stamp boost is almost immediate, with 80% of the benefits being redeemed within two weeks of receipt and 97% within a month, the USDA says.

The quick influx of cash into the economy reflects the often desperate situation faced by millions of households struggling to put enough food on the table. For many families, monthly food-stamp allotments rarely last more than a few weeks, leaving them with dwindling grocery supplies -- and sometimes bare cupboards -- by the end of the month.

Angie Minix rushes to her local Save-a-Lot grocery store on Chicago's South Side at the start of every month, when her new food-stamp allocation appears on her card. So do many of her neighbors. "You can't even get in the parking lot," she says.

On a recent shopping trip, she headed straight to the fresh produce section. Before her increase in April to $606 from $525, Ms. Minix said she would rarely even troll the fresh-food aisles. Now, she talks about how she has introduced her two sons to cauliflower, cabbage, lettuce and cucumbers.

Employed by the state as a home aide, she has seen her hours cut and her mortgage payments rise. Still, the food-stamp boost has increased her purchasing power.

"I can't buy a new car, but I can feed my family," she says.

For years, the food-stamp program was plagued by criticism that it was an inefficient way to help the poor. Many who qualified wouldn't apply because of a lack of information, daunting paperwork or the embarrassment of handing over stamps in a grocery checkout line. And it did little to increase access to more nutritional food, since fresh produce remained scarce in poor areas.

In recent years, though, registration has been streamlined; many food pantries offer information and direct sign-up services. The switch from stamps to plastic cards offers a cloak of anonymity. Meanwhile, more farmers markets offering fresh produce in urban areas have adopted the technology to accept the cards.

Nationwide, enrollment in the program surged in March to about 33.2 million people, up by nearly one million since January and by more than five million from March 2008. In a recent research report, Pali Capital Inc. estimated that food-stamp spending will increase between $10 billion and $12 billion this year from $34.6 billion in 2008.

For grocery stores and farmers markets, the added food-stamp revenue has helped offset slower sales to other consumers.

"When we look at the acceptance of food stamps, it becomes part of a larger and longer strategy to us," says Ken Smith, chief financial officer of Family Dollar Stores Inc., a Charlotte, N.C., chain with 6,600 outlets in 44 states. A recent customer survey estimated that about 20% of Family Dollar customers receive food stamps.

In Chicago, where the number of households relying on food stamps is up 15% over a year ago, according to the Chicago Community Trust, food-stamp receipts are cushioning the blows of the recession. Without the food-stamp increases, "we would have been hurting more," says Joe Garcia, controller at Moo & Oink Inc., a meat retailer with four stores in the Chicago area.

Farmers markets in Iowa have been particularly aggressive in courting the business of food-stamp recipients. At the Davenport market, food-stamp purchases have boosted business at Sawyer Beef. As farmer Norman Sawyer's sales increase, he says he plans to buy more fencing and water tanks to improve grazing areas for his cattle. "This has been a good deal for us," he says.

 

[Jiggyfly]

http://finance.yahoo.com/blogs/daily-ticker/marion-nestle-big-business-food-stamps-where-profits-164228337.html

Wal-Mart "gets a large fraction of Food Stamp dollars," which contributes 25% to 40% of revenue at select stores, according to Nestle. "These companies, therefore, have a vested interest in making sure Food Stamps are allowed for any purchase at all."

And once again I am not advocating for food stamps as some boon to the health of the nation just showing that it has a real impact on the economy

 

[Smitty]

Those articles are nice. They don't disprove a word I said, but they are nice.

You are talking about an incredibly complex set of transactions. It's not like Walmart is sitting there saying "Oh, well this is money that was taxed from us, so it doesn't count as revenue."

Of course they count food stamp dollars as revenue. That's not the point, my point is it doesn't do anything for growth. Which if you took the time to read my post, you might have a chance at understanding that concept.

 

[Smitty]

Obviously I'm doing some heavy generalizing here, but let's call Walmart the "producer" (I know they are just a retailer, they purchase the productions of other companies and then merely sell them as the middle man to consumers, but they are such a large retailer than they actually facilitate the production so for argument's sake, let's pretend that these are all "Wal Mart Farmers" out there).

Walmart has lots of assets. Say it's the total assets that Walmart has -- whether it is in cash, land, or tangible product (inventory, merchandise, buildings and fixtures, etc) -- is 10 billion dollars. I'm just making that number up, but the real number is irrelevant, it can be any number, this is just an explanation.

So Walmart has 10 billion dollars of assets. This value includes the value attached to the number of, say, ears of corn they grow in Iowa every year, which is a relatively static number because their methods of producing corn is already at high-yield and without further technological developments can't be increased.

Walmart is producing this corn not for fun. They are doing it so they can sell it to people for more than it cost them to produce it so they can make a profit, so they can in turn go out and buy more land, or better technology, and then they can produce MORE corn, and make MORE profit.

Well, the citizens of the United States are hungry. They need food. They want Walmart's corn.

If we merely take away Walmart's corn and give it to the citizens, Walmart will be out of assets sooner rather than later. They need income coming back to fund their production. And the food itself is merely a consumable, so all it's value is lost as soon as it's eaten. If Walmart is handing out it's corn, and people are not doing anything, well, soon enough we will be a nation that not only has a broke Walmart, but all our citizens did nothing with their potential labor -- they just ate all the corn, which is now gone. In this cycle, we got poorer and poorer until all the assets were depleted, because no one was making more assets with their labor besides Walmart, who soon ran out of money to do so.

So instead, citizens use their labor. They might not be able to grow corn, so they, for example, mine iron out of the ground. Now, Walmart doesn't need raw iron, so they don't want to trade. But the Japanese need raw iron, so the citizens trade the iron to the Japanese for "money" and then give the money to Walmart (who can use it on lots of things in an expanded cycle that I'm not going to get into).

In this scenario, what is different than the previous scenario?

In the first scenario, Walmart wasn't getting compensated for their corn. They continued to to farm away, but they only had 10 billion dollars to do so. If it cost them a billion dollars a year to produce that corn, in 10 years, they would be broke. Not only that, but the citizens were just sitting around on their asses getting free corn. Nothing was being produced. So all the while they are receiving their free corn, they are literally eating away any wealth they had. At the end of that ten years, they have all their eaten corn, and nothing else.

In the second scenario, what happens? In this scenario, the citizens labored. They dug up a shitload of iron out of the ground. They sold that iron to the Japanese who need it to make things. They dug up so much iron, in fact, that they were able to generate 2 billion dollars a year from the Japanese. In turn, the citizens were able to pay Walmart 1.5 billion a year for that corn. Now Walmart isn't losing money, they in fact make 0.5 billion a year. Now that Walmart has that profit, they can buy more land, and make more corn, and increase production a little bit every year (which will make the price of corn cheaper in the long run, a benefit for the citizens), and can also keep a little of that profit for themselves to buy other things.

The citizens, meanwhile, are fed and healthy with that corn, and they still have 0.5 billion left themselves. They can take that money and go buy something from the Australians, who are producing, say, wool. So the citizens can now afford to have import another asset -- clothes. The clothes let them work longer hours because they are more comfortable, and now they produce more iron, etc. The cycle of production increases production which simply continues to increase wealth.

.....................

Let's inject "Food Stamps" or "Welfare" into this scenario.

Let's say there is someone else besides Walmart here. Let's say there is one person, call him Andrew Carnegie, who simply "has" a lot of wealth. He doesn't do anything all day because he owns 10 billion of assets too, including a lot of corn, so he doesn't need to labor for food.

Well, in the beginning of this scenario, the citizens are hungry. They want corn that walmart is producing. Walmart doesn't want to be paid in corn, they want cash, which Carnegie has a lot of (nearly 10 bn) and the citizens have none of.

The citizens aren't laboring or digging iron out of the ground at this point, they are just clamoring for food.

So the government steps in. The government says, "Carnegie, we are going to take away 2 billion of your dollars this year and give it to those needy citizens because they are hungry."

The government gives the 2 billion to the Citizens. They give 1.5 billion to Walmart for the corn. They keep 0.5 for themselves, which they spend on clothes from the Australians. Walmart is able to buy more land and keep some profit for themselves, resulting in more corn.

The citizens now have corn and clothes. They eat the corn. They eventually wear out the clothes. Because they aren't working, the clothes don't "allow them to work longer and produce more" because nothing is being produced by them anyway.

Next year, they are back to where they started. The corn is all gone. Their clothes are worn out. They have no assets and are hungry.

Walmart has more land. They are producing more corn. That's great, but in order for them to keep it up, it requires constant purchasing streams or the bottom falls out. Who is going to buy from them this year? The citizens have no assets; they spent all their assets last year on depreciables.

So the government steps in. "Carnegie, you have 8 billion dollars. We're taking two away to give to the citizens." Now Carnegie has 6 billion dollars.

The citizens have 2 billion. They spend 1.5 billion on corn, and the other 0.5 billion on clothes, which goes to the Australians.

--------------------------------------------------------------------------------------------------------------------------------------------------

See where this is going?

The citizens have to be PRODUCING something or the money runs out.

Money taxed from the wealthy and then given to the lower classes in the form of welfare and food stamps is NO DIFFERENT than what I have described here.

You can post all the articles you want about how Walmart generates revenue from food stamps, but it is the exact scenario I described above -- yes, Walmart is doing well for a few years -- until the tax surplus runs out. Then we are out of money.

In the United States, the money ran out a long time ago. That is the scary part. We reached the point where our assets were at zero every year and couldn't afford to pay for our needs.

We are able to keep this cycle going by doing two things. 1) We print more money out of thin air, and 2) we borrow shit tons of money from other people.

Both of these practices eventually will eventually end when the people supporting these habits get tired of lending us money.

And when that happens, we will not be producing enough. All the welfare in the world doesn't do a damn thing -- because it's simply taken away from our surplus to begin with. That is the very definition of tax, dude.

So anything that those tax dollars are spent on is merely a recycling of the money. And that's all Keynesian economics is. They called Reaganomics "voodoo economics" but the hilarious part is that the policies that idiots like FDR put in place will bankrupt us without production.

The good news during that period was that the US was a manufacturing gargantuan.

These days, it's not the case anymore.

To keep up the welfare system lifestyle our citizens have grown accustomed to, we need to produce more than we spend. We aren't doing that right now. Why? Because welfare money doesn't create growth. It simply recycles the the money around while being spent on things that depreciate, guaranteeing the creation of a cycle that makes us poorer and poorer in assets every year (we consume assets and don't create new ones).

GROWTH is the only thing that is positive for an economy and thus the citizens.

So I don't give a shit about welfare.

Like I said, it may be the moral thing to do for unfortunate citizens in a society that has plenty of assets.

But DO NOT try to fool me into thinking that it helps the economy. I am not a retard.

 

[EZ22]

The line breaks really tie your manifesto together.

 

[Cotton]

Holy frickin words, batman.

 

[Cotton]

The line breaks really tie your manifesto together.

 

[Jiggyfly]

Those articles are nice. They don't disprove a word I said, but they are nice.

You are talking about an incredibly complex set of transactions. It's not like Walmart is sitting there saying "Oh, well this is money that was taxed from us, so it doesn't count as revenue."

Of course they count food stamp dollars as revenue. That's not the point, my point is it doesn't do anything for growth. Which if you took the time to read my post, you might have a chance at understanding that concept.

So just disregard what actual experts say about the impact of food stamps on the economy and just go by what you believe.

OK gotcha.

 

[Smitty]

So just disregard what actual experts say about the impact of food stamps on the economy and just go by what you believe.

OK gotcha.

Those articles aren't disagreeing with me, they are addressing something off topic. You just think they disagree with me cause you don't understand what either I am saying or what they are saying. Probably both.

 

[Jiggyfly]

Those articles aren't disagreeing with me, they are addressing something off topic. You just think they disagree with me cause you don't understand what either I am saying or what they are saying. Probably both.

No they are not off topic, we were originally talking about how food stamps affect the economy.

You just decided to go off on a Keynesian rant again.

 

[Smitty]

No they are not off topic, we were originally talking about how food stamps affect the economy.

CowboysRock said getting rid of welfare would help the economy. You said it wouldn't because "who would replace those revenues to retailers."

I'm saying that's not what "helps" the economy. Per my example.

I don't care if Walmart loses those revenues because they are phony examples of growth. They aren't real.

So you can post whatever you want talking about Walmart revenues. Doesn't help the economy.

None of those articles are talking about growing the economy, they are talking about "increased activity" -- which is exactly what I said Keynesianism does well -- or Wal Mart revenues -- which I completely explained.

So you have yet to make a point, really.

Unless it's that "Walmart relies on Food Stamp Revenues."

Great. We'd still be healthier without it.

 

[townsend]

I think growth is better than food stamps, and jobs are better than hand outs. But at the same time, a huge percentage of the nation is on a starving wage, I don't know if food stamps are a long term solution, but I think it's a necessary way to subsidize a large portion of the job market (primarily in the service sector) that's being grossly under paid. The invisible hand can kind of be a dick sometimes, and it doesn't give a shit if some waiter's kid goes hungry.

 

[Smitty]

I think growth is better than food stamps, and jobs are better than hand outs. But at the same time, a huge percentage of the nation is on a starving wage, I don't know if food stamps are a long term solution, but I think it's a necessary way to subsidize a large portion of the job market (primarily in the service sector) that's being grossly under paid. The invisible hand can kind of be a dick sometimes, and it doesn't give a shit if some waiter's kid goes hungry.

Well that's why I said it may be the moral thing to do in a society that has extra assets. Just don't tell me it helps the economy.

 

[Cowboysrock55]

Well that's why I said it may be the moral thing to do in a society that has extra assets. Just don't tell me it helps the economy.

And to be fair we do a lot of that in our economy. Any type of wealth redistribution (Which is what a welfare program is) tends to hurt an economy overall but the idea is that we sacrifice that in order to improve the living quality of lowest people of an economy. Welfare programs can also be used to stimulate an economy but it has nothing to do with long term economic growth and efficiency.

 

[Cujo]

My vague drunken point was just that I think it's dumb that marijuana is illegal. I am actually for drug testing for illegal substances in this spot but marijuana shouldn't be one of them.

I agree with this.