[SolaceQuantum]

For those more economically minded: We know that 1$ given to poverty will return the economy somewhere along $1.12, while $1 given to wealth will return the economy somewhere along $0.7. There requires no empathy to conclude that providing for our neediest appears to be economically beneficial for everyone, assuming economic growth is a good thing.

I understand and accept that certain poeple do not give a damn about the poor. But in this case the poster claimed something about those less fortunate that may be untrue, which is a distortion of reality I hoped to point out. If the poster simply didn't care about the poor, I could adjust my rhetoric appropriately.

[Agustus]

How can a dollar taken from me by the government and given to a poor person generate a positive cash flow overall? Has no one taken economics 101 when they get to government that they cannot understand the broken windows policy that Baathist put forward?

Step 1. I earn money.

Step 2. The government makes fallacious claim using whatever economist dujour is will to prostate themselves to the political party in need of economic justification (no worries both parties here in America have them).

Step 3. The government taxes me based on this reason a dollar. I am negative a dollar that I may have spent on something.

Step 4. My dollar is used to pay the administrative and bureaucratic needs of the system, god bless them if they can do it for less than thirty cents (after healthcare, salaries, fringe benefits, building costs, etc.) my dollar is down to $0.70.

Step 4. The money is given to a person in the lower quartile who then spends the $0.70.

After this process, anyone is going to say with a straight face that there is an overall increase of 12% to my dollar that was taken from me?

What if I was going to save my dollars up to start a business, which could really create wealth, instead I have to save up longer to start it.

If the economists were honest with that statistic, they would admit it is not the percent increase but the turn around time to spend the money, or a pull forward to quickly juice the economy.

Examples of the government being spectacularly wrong about telling me why they need to listen to economists:

1. Cash for Clunkers, hurt the poor with a destruction of used cars, pulled forward purchases.

2. Stimulus 2, is shown to have no impact on the economy.

3. Trade Tariffs, supposedly to help protect industries, they just happen to be the industries that are rent seeking. Hurts the poor by increasing prices.

4. Minimum wage: started for racist reasons, still has a disparate racial impact.

[dragonwriter]

> How can a dollar taken from me by the government and given to a poor person generate a positive cash flow overall?

Changes to th velocity of money in different uses. Dollars aren't consumed when spent, they keep circulating.

> Step 4. My dollar is used to pay the administrative and bureaucratic needs of the system, god bless them if they can do it for less than thirty cents (after healthcare, salaries, fringe benefits, building costs, etc.) my dollar is down to $0.70.

No, it's still a dollar, because spending it transfers it to other people, rather than destroying it. And, with government spending, at the first hop essentially all of that $0.30 is still in the domestic economy.

> Step 4. The money is given to a person in the lower quartile who then spends the $0.70.

Also, again, largely in the domestic economy, and in places where it has a higher velocity in the domestic economy than it would if a richer person spent it.

And that's where the gain in total economic activity comes from.

> If the economists were honest with that statistic, they would admit it is not the percent increase but the turn around time to spend the money

That's exactly what economists say produces the return to the economy / increase in economy activity that GP discusses.

This is Econ 101 stuff.

> or a pull forward to quickly juice the economy.

It's not a pull forward. (There are ways you can do that, too, but downward redistribution isn't really one of them.)

[tinco]

You're not going to save it to start a business. You're just going to spend it on rent, products from China and a car loan. Don't pretend your socioeconomic class is better than that.

[amf12]

Or that person might just "save" it for generations, keeping the money from circulating in the local economy.

[dragonwriter]

> There requires no empathy to conclude that providing for our neediest appears to be economically beneficial for everyone

Unless you have information on the distribution of returns, they conclusion is unwarranted. At best, you can say that if you find a friction-free way of taxing and equally redistributing the gains (including most of the redistribution to the poor), and paying it back (starting by paying back 100% to the people you took it from in the first place) you would improve things for everyone.

But of course, you can't: reversing the redistribution would reverse the gains from the redistribution.

So what it does is improve the mean. It maybe improves the median. But for everyone? No, it doesn't. At least, not in the narrow financial terms those figures address.

[Frost1x]

Do you have references for those figures? I'm quite interested.

I'm especially interested in how those figures account for the feedback loop as the poor typically work for the wealthy, so I expect the gap in those figures is potentially larger.

[pnutjam]

Here is your citation. https://www.theatlantic.com/health/archive/2012/07/the-econo...

Spending from a finite pot will grow the economy more if it goes to poorer Americans. That should be obvious to anyone. The wealthy will save it, the poor will spend it and it will often pass through multiple hands.