The Savior of the American Economy......Food Stamps?

When looking at the economy, and the woes of the individual American, it becomes clear that a solution must present itself soon or economic conditions will continue to take a negative turn. What I intend to bring to this discussion is my personal opinions on how there is another vehicle for economic prosperity that no one talks about. I understand that this will be a very sensitive subject, and throughout this thread I will do my best to add caveats to refine the model in which I wish to lay out.

If you saw the thread title and instantly made your decision on how to respond to my thread, I hope you will move along. I am looking for a robust discussion on the issue, and constructive criticism when and where readers disagree. Blanket statements based on political ideology will not suffice! I will do my best to source and provide proof of why I think what I think....I hope you will do the same. So let's begin.

One side of the political paradigm espouses that we must lower taxes on the wealthiest Americans because they are job creators, and with that extra money they would be able to hire new employees. In effect, spurring economic activity by creating more jobs and putting more people into play. While this theory may appeal to most people, in falls short when we look at what actually drives our economy: Demand.

Even if we gave the wealthiest Americans a 0% tax rate, if the demand for their products or services is flat as it is now in the American economy, and they can meet demand with their current workforce, why would an intelligent business-person hire more people? It is a simple matter of supply and demand, not a matter of funding resources or tax policy that dictates when to hire new people. If the demand is not there, these business-people can simply pocket the money and sit on it. Therefore, I suggest that the idea of tax-breaks for the "job creators" being the right way to create jobs is simply false. Tax breaks for the wealthy is not a 100% guarantee that jobs will be created. In fact, there is not a guarantee at all. So the idea of tax breaks for the wealthy is not, and will not be the answer to our current condition.

The other side of the spectrum believes that we must increase the tax liability for the wealthiest Americans to increase income to the Federal Government, thereby enabling the Government to create programs and infrastructure spending that will create jobs. IMO, this is also a bad idea. This would allow the Federal government to define the top tax rate that would inevitable dive deep into the upper-middle class and middle class that are in no way wealthy at all. It also creates and environment in which corporate-cronyism can maintain its stranglehold it has on the legislature.

If the legislature allocates the money, they can be lobbied by the corporate PTB to funnel the funds their way and in effect, giving it right back to the wealthy. Even if the money is allocated to "jobs projects" or infrastructure spending, there is no way to guarantee that money will create jobs or that we will not end up with "bridges to nowhere". So IMO, simply raising the taxes on the wealthiest Americans in and of itself will not stimulate the economy.

So we must look for an alternative to what the political powers want us to believe will create jobs. That is where I believe that food stamps come in to play. Now we can spend all day arguing about whether or not the current recipients abuse the system, or whether or not they are lazy bums. It really doesn't matter because abuse of food stamps is not a widespread problem and the idea that all people on food stamps are lazy is simply wrong and a misinformed statement. What does matter is the economic activity that food stamps create while helping those in need.

The CBO, the Dept of Agriculture and Moody's have all stated that food stamps create from $1.64 to $1.84 of economic activity for every $1 spent in the food stamp program. So while an initial investment of $1 in a business venture can quickly diminish in it's effectiveness in economic measure, the food stamp can be a profitable economic stimuli.

Here is how I think we can pay, and implement such a program for ALL Americans and not just the neediest among us:

First we need to realize that the notion the "wealthiest Americans pay most the taxes" is a half-truth. While large INCOME earners pay a rate of 35% in taxes, some of the wealthiest people make their money from capital gains. Capital gains are only taxed at a 15% rate, and much lower than the 35% tax rate they would pay if they actually called it INCOME. So we could raise massive amounts of money by simply raising the capital gains rate on non-retirement investments. This would also help alleviate income-disparity and help fund a program to help all Americans.

Second, we offer the food stamp program to all Americans, regardless of income or need. With a 2010 estimate of 115,000,000 households within the US, we could offer each household a $500 food stamp card that would only cost $57.5 billion. If we take the conservative estimate of what food stamps create in economic activity, we can assume that would equate to at least a $94.3 billion economic boost to the economy.

This injection into the economy also has some other good side effects! If this program was implemented every 3 months, or eventually each and every month to all US households, at a cost of $690 billion annually (less than a stimulus bill) than we could create a potential of $1.13 trillion in economic stimulus.

Now the real good part is this: We can guarantee that no matter what, even if the system is manipulated, 100% of the money will be put into the economy. There is no way to manipulate funds off of a Food stamp card. It has to be spent on food. Also, it would help all Americans in providing food and helping their own personal economic situation and allow them to free up cash funds to pay debt or to spend elsewhere that would normally be spent just to eat. Since a majority of Americans are living paycheck to paycheck, you can guarantee that extra disposable cash will be spent no matter what.

And to top this all off, since this sort of "stimulus" would drive up DEMAND on all the stores and shops that take food stamps, we can guarantee that jobs will be created. Not just in supermarkets and such, but also in many other areas such as trucking (logistics), agriculture, accounting, management, foodservice, and I could keep going. As a person who works in the food industry, I can tell you that it would amaze many of you just how many industries are tied to the foodstuffs market.

So in closing, I hope that I have shown you a viable alternative to the politically-charged rhetorical ideas we see coming from our politicians. There is a way to help all Americans, boost economic activity and provide sustainable jobs as long as we are willing to stay the course with such a program.
I know that many of you will disagree, and that's ok. I invite all of you to comment and/or tweek any ideas you may have. Let's keep this civil and realize that while we may disagree on how to get where we need to go, the destination is still the same......to help Americans and to produce jobs.
Thanks and I look forward to your ideas!

Having an issue with links, will add when I get home.

Posting links:

CNN

Cencus

CGIF

Supply and Demand

No comments or ideas?

C'mon people, you surely have an opinion!

Bump....

anyone?

So you're proposing the Governemnt spends 57.5 billion a month??? Ummm. no. The problem isnt food stamps and they're aren't the answer either. Where does that 57.5 billion come from? Ideals and all that are nice, but back down here on earth, namely, America...things work differently.

reply to post by spliff4020


No, I am not proposing that we spend that much each and every month. It was merely a way to illustrate the potential of a program as I described.

Imagine what we could do if we spent the war budget on a program for all of the Americans, such as this!

But class warfare

But job creators

But entitlements

But Jesus


Okay, I think I have the current talking points covered.

So anyway, I'm not really following how this helps stimulate anything. Follow me on a quick train-of-thought logic experiment. Previous attempts at "stimulus" that just handed people money failed because people just stashed the money. So if we hand people food stamps they will simply use those food stamps in place of money that they would already be spending on food, AND THEN they would just stash the money that they would have otherwise used on food.

I just don't feel that handouts are a way to stimulate the economy. Handouts should be the safety net that prevents starvation and/or homelessness. Of course I don't really know what I'm talking about; I'm just offering my completely baseless opinion.

But lazy bums

But gibsmedats

But welfare queens

Double post cause I'm retarded

reply to post by Sunsetspawn


People were not handed money, it was just a tax break. There also wasnt any specific use for it. The problem is that people paid off bills and it went right back into banks instead of being spent on thigns to spur the economy.



What the author is proposing is more of a trickle up theory.it is an interesting point. It is pretty specific, spurring the food industry, but that money is being invested into something, instead of going back to the banks.

The tax cuts do not work. the economy prospers when there are more taxes. The wealthiest need to be taxed.

The reasons tax breaks don't work for the wealthy companies is because they see instant profit. Then it becomes about instant revenue and they stop planning long term.

A simple example: a person is given 25k. They go out and buy a car. That car has relatively short value and instant gratification. Now give that person 10k, it is less so the instinct is to make the most of it, so they use it as a down payment on the house, whoome they hope to sell and make profit in the long term.

Companies look at things the same way when you don't tax the wealthy.

reply to post by nixie_nox


I couldn't have said it better.

This is just an idea to show how we may be looking in the wrong places for ways to boost the economy. Perhaps food stamps are a viable way to do so. That's all.

Why limit it to food stamps? Why not just give everyone the money to buy whatever they want? It's really a poor idea.

What we should do.

Taxes- Eliminate the income tax and tax wealth instead. No taxes until you reach over $1 million in wealth. Have a billion? Then you pay 10% annually. Not only would this fund our government, it would also keep the the top1% from wielding too much power. It would also give the lower classes more money to spend into the economy, stimulating demand and thus employment.

Housing- Solving housing is the second leg of what needs to be done. Fix housing properly and you also go a long way toward fixing the economy. My solution is to have the government buy all the housing loans currently being backed by FNM, FRE, FHA. Then turn around and reduce principal and interest rates. This alone should allow many people to keep their homes that previously struggled. For those that were already making it, a cheaper home payment again means more will be spent into the economy. On the government side, even with lower rates and reduced principal the government will still get their money back at the end of the terms. For those that still can't make it, offer the same deal to those who buy the affected houses.

Money system- We need to get off the debt based fractional reserve system. Every new dollar printed or loaned is represented by an equal amount of debt. This means our net supply of money never changes. Thus, unless you wrest the money away from the billionaires and such, the lower classes have zero mathmatical chance of ever getting their hand on that money itself. Add in the interest on the debt both private and public and it easy to see that it is impossible for the lower classes to do anything but fall further behind. The Federal Reserve should be a counting mechanism rather than a funding mechanism.

reply to post by sligtlyskeptical


I will explain this again. The tax breaks were money for people to do with whatever they want. What they wanted to do is pay bills. All the money went right back to the banks for credit card companies, utilities, etc.
It has never worked.

You make the money very specific, then you can spur that part of the economy, which will also have a ripple effect. More food bought means more trucks hired. More trucks on teh road means more truck drivers have jobs, so do the people that load, distribute, warehouse, etc.

reply to post by sligtlyskeptical


As the previous member stated, this is pointed directly towards specific programs that not only aid every American, but the effect of such a "subsidy" would have long-reaching effects all across the country, and not just for a small group of corporate interests.

I agree that we need to change our tax system that does not favor those that are already wealthy.

I also agree that we need to realize that housing is an issue we must address as more of a "right" of sorts.

We need to find a better system of living and not concentrate so hard on uncontrolled capitolism. Capitolism is good, unless its left unchecked and then we create our current problems we see today.

JP Morgan controls the whole food stamp market. They issue the cards and control the market.

JP Morgan is the largest processor of food stamp benefits in the United States. JP Morgan has contracted to provide food stamp debit cards in 26 U.S. states and the District of Columbia. JP Morgan is paid for each case that it handles, so that means that the more Americans that go on food stamps, the more profits JP Morgan makes.

www.alternet.org...

Originally posted by sligtlyskeptical
Why limit it to food stamps?

Because that is intentionally obfusicating the point.

It's not food stamps to any particular individual that is the question.
It's that they should be given to everyone, even the rich.
Sure a few bucks a day isn't going to mean anything to them,
but it's there and the class issues are gone.

We could have done the same thing with a flat tax decades ago,
but it has become evident that the graduated tax is considered sacred.

A more egalitarian food stamp,
say call it a per diem instead
for each citizen, even the congress
would have to be coupled with an open budget.

Let's see exactly how much our government is charging us
for effective administration of the public trust.

Instead of always getting the pitches in the dirt,
where even if you swing and make a hit,
a huge cloud goes up and obscures vision.

I think our owners enjoy pitting the poor against the rich.


David Grouchy

reply to post by woodwardjnr


Thanks for bringing this up. I have read about this before, but never thought to touch on this in the OP.

I think that would be an easy fix. There are small business' in my area that make cards for local banks, POS systems and other types of cards for many different systems. They are also very cheap! It would be easier for each state to contract it out to local business' that keep the cost under a certain level and we could easily get away from JP Morgan.

There will always be small issues that need to be worked out before a complete implimentation of such a program, but if we simply talk about it it is easy to find a solution.

Forget food stamps .......


How about making food free or as close to free as possible for the nation that CAN produce enough for the world.

If we continued to feed the world as we did decades ago we could use the surplus to keep the people of this nation fed for free.

The cost of food is increasing every year but we can make more food on one acre of land now then we could 50 years ago by ten fold.

Make food essentially free and it will help the economy because people would have more money to pay bills and entertainment.

If we have a right to life in this country should we not have a right to food and water then. Enough to sustain you day by day. I mean really its the most basic need that we need to live but we still pay for it.

whose gonna do it.......

Get those politicians off the hoes and give them a hoe. Tell them to get a digging cause we been shoveling there crap for far to long now.

reply to post by Idotwhat


I happen to believe that eventually we will see such a system where all of our basic needs are free. Food, housing, energy and public transportation. That is a long time in the future though. I don;t think we could transition to that sort of system from where we are today.

It will take a change in the human perspective and a change in how we value life, rather than profit, before it can occur.

reply to post by sheepslayer247

...The other side of the spectrum believes that we must increase the tax liability for the wealthiest Americans to increase income to the Federal Government, thereby enabling the Government to create programs and infrastructure spending that will create jobs...

this is where i stopped reading the OP...

the government does not produce or recieve Income... they tax entities & people to generate Revenue Streams


food stamps is a way to make-up for all the Corporate loopholes, so that the peasants don't rebel...
its a well thought-out scheme... create a welfare state or a minimum survival safetynet so that the congressional elites can do the Pontius Pilate routine and 'wash their hands of the mess'



extended unemployment is looked upon as a waste of resources and a debt creator by all the elite bankster snobs which are 'entitled' to bailout monies for Bonuses !

redact all the $100s of Billion$ paid in bonuses to the financial wizards that caused the system to crash in-the-first-place...under TARP and the QE I, II etc...
Those are the exact 'entitlements that are obscene and fraudulent....not FS/ unemployment/SS

[e

It's the same cost to give people fishing poles and bait. Or seeds and gardening tools. But then you'd undermine the big machine put into place by Harvard and other business schools which supports the central bank families. This solution saves the people but not the banks, so banks would lobby to pass restrictions on individuals fishing and farming, maybe behind the shield of environmentalism.

Giving people food stamps is like giving people fish. You keep the fishermen in business, and everyone who is part of the fishing to fish cooking economy (JP Morgan, Goldman Sachs) gets their cut. This solution saves 'the American Economy'. Banks would lobby to increase food stamps and increase taxes on 'the wealthy', maybe behind the shield of social engineering or community activism.

Small businesses owners are 'the wealthy' since they typically make over $159K (top 5%). Some entrepreneurs own more than one business, and try different things to see what works. These are the job creators, and if you tax them they cut back jobs or raise prices to survive. These people are not so much part of the big machine as large corporations are. Corporations are protected but small businesses (the wealthy) are seen as easy pickings and competition to large corporations. Banks will lobby government to raise the tax on 'the wealthy' and for waivers for corporations which will cause overall job loss but protect the big machine put into place.

Is it really good to save the economy? It depends on which economy you're talking about, the big machine economy which includes banks, corporations, and dependent peons? Or the small entrepreneur and independent self-sufficient people?