Food Stamps’ Multiplier Effect: Economic Voodoo
Last Updated on Saturday, 9 October 2010 10:03
Written by dbhalling
Saturday, 9 October 2010 10:03
The insidious multiplier effect raises its ugly head again in the form of Nancy Pelosi.
At a press conference in her home town of San Francisco, Pelosi explained that the program’s multiplier effect –the amount of money generated in the local economy as the result of the subsidy– far exceeds the nearly $60 billion spent this year by the federal government and is a sure-fire way to stimulate the economy. For every dollar a person receives in food stamps, Pelosi said that $1.79 is put back into the economy. The U.S. Department of Agriculture cites an even higher figure of $1.84.
According to Pelosi the multiplier effect for food stamps (the new politically correct name is SNAP – Supplemental Nutrition Assistance Program) is 1.79 and the Agriculture Department cites and even more absurd multiplier of 1.84. The absurdity of the multiplier effect can be easily proven by reductio ad absurdum. If the multiplier effect is true why don’t we just spend an infinite amount of money then we will be infinitely wealthy? You cannot create wealth by taking money from one person (who created the wealth) and giving it to another person to spend – on food in this case. Entropy proves that you cannot even get $1 of return for each $1 spent on food stamps (welfare). The obvious losses include the cost of the bureaucrats to run the food stamp program, the time, effort and gas the recipients expend to obtain the food stamps. This does not add to GDP, since it is consumption. Economists seem confused that the P in GDP is for spending or consumption, when it stands for Product or production.
Any economist who repeats the multiplier effect lie should be immediately fired. Any politician who repeats the multiplier effect lie should be treated the same as people in the Flat Earth Society, as insane. The multiplier effect is a con game designed to justify stealing.
- Bankrupt on Cyprus: Banks Should Go Bankrupt
- The Grinch who Gave America the Negative Stimulus (Guest Post) | Flopping Aces on Food Stamps’ Multiplier Effect: Economic Voodoo
- dbhalling on Guest Post: Fatal Patent Legislation Must Be Stopped
- Art on Guest Post: Fatal Patent Legislation Must Be Stopped
- dbhalling on Innovation Act Will Greatly Harm Independent Inventors: Guest Post Randy Landreneau
- Guest Post: Stop the Destruction of Independent Invention
- DK Halling Interview with Fran Lewis
- Latest Review of Pendulum of Justice
- PATENT=MONOPOLY – A LEGAL FICTION
- Guest Post: Fatal Patent Legislation Must Be Stopped
- GAO No Patent Litigation Explosion: No NPE Problem
- Echoes of Pendulum of Justice: Government Stealing Inventions
- Gary Boone Inventor of the Microcontroller Dies at 68
- Pendulum of Justice Now Available on Nook: Barnes and Noble
- Innovation Act Will Greatly Harm Independent Inventors: Guest Post Randy Landreneau