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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