[mullingitover]

> I would go a step further and ask whether or not that $100 is better in the hands of a wealthy person (in the context of this article - a person who would put that money to work in the local/national economy to make more of it), or in those of the poor person.

That's a testable hypothesis, and as it turns out it's already been refuted: research has shown that dollar-for-dollar, tax cuts are a net drag on the economy, and food stamps deliver the biggest bang for buck economic stimulus. Even investments in infrastructure don't deliver as much of a GDP boost as food stamps. Giving that $100 to a wealthy person is one of the least productive things you can do with it.

[jerf]

And I actually think that furthers the idea that "money == wealth" isn't a helpful way to look at the world. Why are food stamps so effective? Because when you're hungry, food stamps are astonishing wealth to the recipient, far more than the societal costs of providing it.

Unfortunately for people who read this as a strong endorsement for general redistribution, it is indeed the "biggest bang" and once you have filled someone's belly (and generally filled in the lower Maslow levels), you no longer have such simple options to take a bit of wealth from one and give a lot of wealth to another. At the margins that's not the choice we face; usually it looks more like my original post.

I am a libertarian, but I greatly value the social safety net. It is an incredible, incredible source of societal wealth. The problem is that there's no way to scale the safety net up beyond being a safety net, because again let me emphasize that would be awesome, but it just doesn't work.

[drharris]

Yes, wholeheartedly agree here. I was not thinking of having the basic Maslow levels met, as I think that kind of social net should be somewhat guaranteed, and the economic benefit is obvious. Once those needs are met, does a redistribution of $100 have a net positive or negative on the overall economy? Not sure, but gut tells me negative. The wealthy will invest, which has a tiny net positive on the economy that compounds over time. The non-wealthy will consume, which has a positive immediate benefit on the economy, but poor long-term benefit along with terrible environmental consequences. Really, we probably need both for any economy to survive, but consumption is what the middle class is for anyway.

[scotty79]

Economy is driven by consumers so making sure consumers have more money is surefire way to improve economy. Giving the money to business owners (or not taking it away) doesn't improve anything beacuse their investments are not limited by money owned but by their customer base which does not change. At best they'll spend additional money on advertisment which will just steal some customers from their competition at almost no benefit to the economy apart from increased activity in advertisment agencies.