Re: Reject the Welfare/Warfare State

Generally speaking, if you give $1,000,000 to 100 families ($10K each)
below the poverty line, they're going to spend all or nearly all of
that money relatively quickly (i.e. put it back into the economy,
generating demand for more goods and services, creating new jobs).

**until the money is gone.  At that point most of the 100 families are still
poor, they just have more stuff.  The demand for goods and the new jobs are not
sustainable unless you continue to give them the 10k regularly.


Some percentage of them will even have some entrepreneurial spirit and
invest it in themselves; e.g. to kick-start a small business that was
previously beyond their means.

**maybe one out of that 100.  Maybe another 10 or so will spend half and bank
the pother half.

**but most will spend it and do a fast short lived burst of stimulus.  The
Federal car program is a good example of why that kind of program is a failure.


If you give $1,000,000 to 100 families ($10K each) who are already
making 1/4 million dollars per year or more, some non-trivial portion
of it will be saved or invested.  And there will be almost no
additional spending on things towards the bottom of Maslow's
Hierarchy; those needs have already been met.  And if they are
inclined to be entrepreneurial with their new $10K, then they're
*already* being entrepreneurial with their previous $250K.  10K is
unlikely to push them over some sort of threshold; certainly less
likely to do so than for those below the poverty line.


**but see here for a second.  To the rich people in this second scenario, you
are not giving them anything, you are just not taking it away. To the low
income, you are not taking less from the, you are actually providing them more.
There is afundamental difference there.



More investment by the wealthy isn't a bad thing... investments
usually lead to new jobs too, eventually.  But if you are trying to
circulate the most money through the system and create the most jobs
the quickest, it is far from obvious that providing/extending tax
breaks to the wealthiest or subsidies to corporations is the best way
to achieve that goal.  If we are trying to reduce the deficit by $1B,
it's reasonable to suggest that increasing the tax burden by $1B on
the wealthiest might be more effective than cutting $1B of social
services.

**not that those are the only options.  And in your scenario, if we rise the
taxes on the wealthy are we not also paying some back to the poor?  So is it a
zero sum gain or not?


Of course, the devil is very much in the details.  And Lance's
observation that "a large number will be paying off debts with that
extra money (paying for the products already created and jobs already
worked and gone)" has been throwing a big wrench into our economic
recovery (and the would-be schemes and plans of those who would steer
it).  It's a wrench that had to be thrown eventually.  The piper must
be paid.

**I as a middle class weenie have never stopped paying it.



-- 
dadl-ot mailing list
http://mail.thehood.us/mailman/listinfo/dadl-ot_thehood.us
http://news.gmane.org/gmane.music.dadl.ot