Here's a good piece of REAL ECONOMICS: Food Stamps Stimulate the Economy more than SIX TIMES more

[TrollBuster9090]

Food Stamps Stimulate the Economy SIX TIMES MORE than The Bush Tax Cuts, according to Mark Zandi's (of Moody's) figures on The Multiplier Effect.

Here's some SERIOUS Economics to throw in the face of your VooDoo Economics, Trickle-Down friends whenever they bring up the widely accepted (but wrong) Urban Myth about Tax Cuts stimulating the Economy.


In July 2008, right before the economy imploded Mark Zandi (cheif economist for Moody's Economy.com) testified before Congress on what to do to help the stagnant economy.

He made these remarks, which you should link to or cite to the VooDoo Economics, Tax Cut Fetish crowd:

http://www.economy.com/mark-zandi/documents/Small%20Business_7_24_08.pdf

In fact, these are the figures that Paul "Nostrodamus" Krugman used in his prophetic OpEd piece on January 9th 2009, where he attempted to tell Congress and Obama what to put in the Stimulus Bill.

http://krugman.blogs.nytimes.com/2009/01/06/stimulus-arithmetic-wonkish-but-important/


Specifically, Zandi talks about The Multiplier Effect, which is the amount of bang you get for your buck with either tax cuts or spending increases. The Multiplier Effect being the number of dollars you increase the GDP per dollar of either tax cuts or spending increases. So, for example, a government spending program with a multiplier of 1.0 means that for every dollar spent by govt., the GDP is increased by one dollar. A tax cut with a multiplier of 0.2 means for every dollar lost in tax revenue (functionally, the equivalent of govt. spending) the GDP goes up by 0.2 dollars.

So, here are some of Zandi's figures:

Virtually ALL of the TAX CUTTING the Republicans want to do (or have done) have a pathetic Multiplier Effect:
Extend Alternative Minimum Tax Patch 0.48
Make Bush Income Tax Cuts Permanent 0.29
Make Dividend and Capital Gains Tax Cuts Permanent 0.37
Cut the Corporate Tax Rate 0.30


In fact, the only Tax Cut that DOES ANY GOOD is The Payroll Tax Cut with a multiplier of 1.29. (No wonder the GOP tried to BLOCK it!)


By contrast, all of the traditional "liberal" measures have large multiplier effects, including extending Newt Gingrich's favorite Dog Whistle program FOOD STAMPS. (ie-to call Obama 'the greatest food stamp president in history' is a testament to his economic genius.)

Extend Unemployment Insurance Benefits 1.64
Temporarily Increase Food Stamps 1.73
Issue General Aid to State Governments 1.36
Increase Infrastructure Spending 1.59

To put it another way: Increasing food stamps stimulates the economy SIX TIMES MORE than extending the Bush Tax Cuts, and rebuilding the country's infrastructure will stimulate the Economy more than FIVE TIMES MORE than cutting the Corporate Tax Rate.