posted on Sep, 27 2011 @ 06:00 PM
When looking at the economy, and the woes of the individual American, it becomes clear that a solution must present itself soon or economic conditions
will continue to take a negative turn. What I intend to bring to this discussion is my personal opinions on how there is another vehicle for economic
prosperity that no one talks about. I understand that this will be a very sensitive subject, and throughout this thread I will do my best to add
caveats to refine the model in which I wish to lay out.
If you saw the thread title and instantly made your decision on how to respond to my thread, I hope you will move along. I am looking for a robust
discussion on the issue, and constructive criticism when and where readers disagree. Blanket statements based on political ideology will not suffice!
I will do my best to source and provide proof of why I think what I think....I hope you will do the same. So let's begin.
One side of the political paradigm espouses that we must lower taxes on the wealthiest Americans because they are job creators, and with that extra
money they would be able to hire new employees. In effect, spurring economic activity by creating more jobs and putting more people into play. While
this theory may appeal to most people, in falls short when we look at what actually drives our economy: Demand.
Even if we gave the wealthiest Americans a 0% tax rate, if the demand for their products or services is flat as it is now in the American economy, and
they can meet demand with their current workforce, why would an intelligent business-person hire more people? It is a simple matter of supply and
demand, not a matter of funding resources or tax policy that dictates when to hire new people. If the demand is not there, these business-people can
simply pocket the money and sit on it. Therefore, I suggest that the idea of tax-breaks for the "job creators" being the right way to create jobs is
simply false. Tax breaks for the wealthy is not a 100% guarantee that jobs will be created. In fact, there is not a guarantee at all. So the idea of
tax breaks for the wealthy is not, and will not be the answer to our current condition.
The other side of the spectrum believes that we must increase the tax liability for the wealthiest Americans to increase income to the Federal
Government, thereby enabling the Government to create programs and infrastructure spending that will create jobs. IMO, this is also a bad idea. This
would allow the Federal government to define the top tax rate that would inevitable dive deep into the upper-middle class and middle class that are in
no way wealthy at all. It also creates and environment in which corporate-cronyism can maintain its stranglehold it has on the legislature.
If the legislature allocates the money, they can be lobbied by the corporate PTB to funnel the funds their way and in effect, giving it right back to
the wealthy. Even if the money is allocated to "jobs projects" or infrastructure spending, there is no way to guarantee that money will create jobs
or that we will not end up with "bridges to nowhere". So IMO, simply raising the taxes on the wealthiest Americans in and of itself will not
stimulate the economy.
So we must look for an alternative to what the political powers want us to believe will create jobs. That is where I believe that food stamps come in
to play. Now we can spend all day arguing about whether or not the current recipients abuse the system, or whether or not they are lazy bums. It
really doesn't matter because abuse of food stamps is not a widespread problem and the idea that all people on food stamps are lazy is simply wrong
and a misinformed statement. What does matter is the economic activity that food stamps create while helping those in need.
The CBO, the Dept of Agriculture and Moody's have all stated that food stamps create from $1.64 to $1.84 of economic activity for every $1 spent in
the food stamp program. So while an initial investment of $1 in a business venture can quickly diminish in it's effectiveness in economic measure,
the food stamp can be a profitable economic stimuli.
Here is how I think we can pay, and implement such a program for ALL Americans and not just the neediest among us:
First we need to realize that the notion the "wealthiest Americans pay most the taxes" is a half-truth. While large INCOME earners pay a rate of 35%
in taxes, some of the wealthiest people make their money from capital gains. Capital gains are only taxed at a 15% rate, and much lower than the 35%
tax rate they would pay if they actually called it INCOME. So we could raise massive amounts of money by simply raising the capital gains rate on
non-retirement investments. This would also help alleviate income-disparity and help fund a program to help all Americans.
Second, we offer the food stamp program to all Americans, regardless of income or need. With a 2010 estimate of 115,000,000 households within the US,
we could offer each household a $500 food stamp card that would only cost $57.5 billion. If we take the conservative estimate of what food stamps
create in economic activity, we can assume that would equate to at least a $94.3 billion economic boost to the economy.
This injection into the economy also has some other good side effects! If this program was implemented every 3 months, or eventually each and every
month to all US households, at a cost of $690 billion annually (less than a stimulus bill) than we could create a potential of $1.13 trillion in
Now the real good part is this: We can guarantee that no matter what, even if the system is manipulated, 100% of the money will be put into the
economy. There is no way to manipulate funds off of a Food stamp card. It has to be spent on food. Also, it would help all Americans in providing food
and helping their own personal economic situation and allow them to free up cash funds to pay debt or to spend elsewhere that would normally be spent
just to eat. Since a majority of Americans are living paycheck to paycheck, you can guarantee that extra disposable cash will be spent no matter what.
And to top this all off, since this sort of "stimulus" would drive up DEMAND on all the stores and shops that take food stamps, we can guarantee
that jobs will be created. Not just in supermarkets and such, but also in many other areas such as trucking (logistics), agriculture, accounting,
management, foodservice, and I could keep going. As a person who works in the food industry, I can tell you that it would amaze many of you just how
many industries are tied to the foodstuffs market.
So in closing, I hope that I have shown you a viable alternative to the politically-charged rhetorical ideas we see coming from our politicians. There
is a way to help all Americans, boost economic activity and provide sustainable jobs as long as we are willing to stay the course with such a
I know that many of you will disagree, and that's ok. I invite all of you to comment and/or tweek any ideas you may have. Let's keep this civil and
realize that while we may disagree on how to get where we need to go, the destination is still the same......to help Americans and to produce jobs.
Thanks and I look forward to your ideas!
Having an issue with links, will add when I get home.