Quote:
Originally Posted by Willravel
Also, and perhaps more importantly, many social programs have been proven to stimulate the economy more than any form of charity. Food stamps, often the target of libertarian mire, increases economic activity $1.73 for every dollar spent, making it the most efficient economic stimulus in modern history. Unemployment insurance returns $1.62 for every dollar spent. These are wildly successful programs, programs that contribute greatly to economic stability that you benefit from.
Tax breaks, btw, generally return a dollar or less for every dollar spent.
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I have heard of this by listening to Paul Krugman and Nancy Pelosi, but I'm afraid I have no idea what it means. If the government gives Smith a food stamp worth $1, and Smith buys a loaf of bread (on sale) for $1, how does that transaction stimulate the economy beyond $1?
If I put a dollar in my savings account, the bank lends that dollar and gets, say, 4% back on that investment. I get 2%, so I can see that the economy grew that dollar by 4% that year assuming that the bank and I both get paid. Is the idea that a dollar in food stamps creates $1.73 in economic activity the same thing?