http://www.realclearpolitics.com/video/2011/08/16/obama_ag_secretary_vilsack_food_stamps_are_a_stimulus.html
"Every dollar of SNAP benefits generates $1.84 in the economy in terms of economic activity. If people are able to buy a little more in the grocery store, someone has to stock it, package it, shelve it, process it, ship it. All of those are jobs. It's the most direct stimulus you can get in the economy during these tough times."
Spending other people's money.. Really stimulating!
Broken window fallacy.
TANSTAAFL:"Every dollar of SNAP benefits generates $1.84 in the economy in terms of economic activity..."
Then let's give everyone a $100k food-stamp a year, and watch everyone "generate" $184k/yr for a "profit" of $84k/year. Not a bad salary for a year of munching your brains out. Who do I vote for to get this solution through?
K.C. Farmer:Broken window fallacy.
You beat me to it! :P
The keyboard is mightier than the gun.
Non parit potestas ipsius auctoritatem.
Voluntaryism Forum
Well, my mom uses food stamps. We're stimulating the economy I guess.
I agree that wealth destroyed is not wealth created, but the refutation of the broken window fallacy relies on the idea that the shop owner with the broken window would use the money to help the economy. Instead, he could be hoarding money. I guess this goes to prove that economics really is not about Keynes's equations but more of praxeology.
How can you say that "hoarding" money is not helping an economy?
How is "hoarding" different than saving?
Point well taken.
I started this thread because someone linked the article on another board I frequent.
After going through the whole broken window fallacy and watching it go right over his head we have reached an impass.
His new line is that someone needs to prove that the $1 given out in foodstamps does not generate $1.84 in economic activity.
I have already pointed out that "economic activity" is meaningless and that $1.84 doesn't tell us much of anything at all.
Any other ideas how to try and "prove" it wrong?
Speaking of hoarding:
http://news.yahoo.com/blogs/lookout/florida-couple-charged-hoarding-700-cats-151839964.html
Wheylous:but the refutation of the broken window fallacy relies on the idea that the shop owner with the broken window would use the money to help the economy. Instead, he could be hoarding money.
This "hoarding" you speak of is just savings, and savings is deferred consumption. They are holding the money to consume a good at some future date (perhaps very far in the future). You don't just hold money for no reason at all.
Also spending money is not what drives the economy, especially when having your money forcibly taken from you and given to others.
TANSTAAFL:His new line is that someone needs to prove that the $1 given out in foodstamps does not generate $1.84 in economic activity. I have already pointed out that "economic activity" is meaningless and that $1.84 doesn't tell us much of anything at all.
Well if it went over his head, I doubt he is able to get a grasp of abstract concepts. The whole reason subsidies make everyone worse off is because of Oppurtunity Cost. This is what Bastiat/Hazlitt speak of with the "unseen." All they look at is the seen, the groceries being bought with food stamps and the effects from that (stocking shelves, transporting food, etc.), but what are all the goods foregone because the person was taxed to pay for food stamps (the USB Stick/TV/Shoe/Shirt/DVD/Pencil/Box) that could have been bought.
Here is an article by Frank Shostak called "The Myth of The Magic Multiplier" which may help you:
http://mises.org/daily/1889
Wheylous:I agree that wealth destroyed is not wealth created, but the refutation of the broken window fallacy relies on the idea that the shop owner with the broken window would use the money to help the economy. Instead, he could be hoarding money. I guess this goes to prove that economics really is not about Keynes's equations but more of praxeology.
Along with what TANSTAAFL said, what does "help the economy" mean to you? I'd say that, if the shop owner preferred "hoarding" the money over spending it, he was helping the economy in the sense of satisfying his most urgent desire vis-a-vis the money.
Of course, when most people these days refer to "helping the economy", they really mean helping them get what they want. This implies that they believe they have a higher claim on the shop owner's money than he himself does.
TANSTAAFL:I started this thread because someone linked the article on another board I frequent. After going through the whole broken window fallacy and watching it go right over his head we have reached an impass. His new line is that someone needs to prove that the $1 given out in foodstamps does not generate $1.84 in economic activity. I have already pointed out that "economic activity" is meaningless and that $1.84 doesn't tell us much of anything at all. Any other ideas how to try and "prove" it wrong? His new line is a pure argument from ignorance. He's implicitly arguing that, if no one can prove that $1 given out in foodstamps does not generate $1.84 in economic activity, then the converse must be true. The keyboard is mightier than the gun. Non parit potestas ipsius auctoritatem. Voluntaryism Forum | Post Points: 5
His new line is a pure argument from ignorance. He's implicitly arguing that, if no one can prove that $1 given out in foodstamps does not generate $1.84 in economic activity, then the converse must be true.