A Stimulating, Stimulus Debate: Part 2

12 Feb

This is Part 2 of the Stimulus Bill Debate between the two Haysayers.  You may reference Part One, for the first half of the discussion.

Kareem

Food Stamps are great; I think it’s a useful program but placing money for in a stimulus bill is ridiculous! If I were to follow your logic, you would have me to believe that those on food stamps Congress-Stimulusonly shop for food periodically. I’m sure people are not eating only once a week.  The people who are eligible for the stamps under the stimulus will be the same people who are on food stamps now.  To say that this will jolt the economy is not accurate, this money should not be apart of a stimulus, it should be funded with all the other entitlement programs during the normal appropriation process.  Lastly, if you think that this money will help additional people get on food stamps, that would be unfortunate because this money is a one time disbursement, so if indeed more people are given food stamps, they would eventually have to be cut from the program or receive less assistance because this money is limited.

As for the tax credit, I’m amused how you view poor people as those who waste money on frivolous items. “If you want to see money go back into the economy the quickest, give it to the poorest person.  It will go right into a Big-Mac and not in their pocket”. You sure have a good idea of what poor people think…I don’t know what makes you think that a person who is struggling to make ends meet isn’t going to save money either, just because they are poorer and don’t fit your example of a middle class household who owns a home, I’m sure they will save or pay debt with the $30 or $40 a month they get under this tax credit.  Either way, that will not stimulate the economy. However, tax cuts probably are the best way to get money directly in the hands of Americans.  I would suggest that a bigger amount of relief is given to the middle class since the economy hinges on their financial condition. It would be a stretch to say that giving $1K to a poor family over the span of a year will help the economy. Most people aren’t poor so their spending won’t help achieve the desired outcome.

Doug

Food Stamps are great, and placing them in the bill is the exact opposite of ridiculous (wise?  I don’t know, I couldn’t think of a good word for ‘opposite of ridiculous’).  I might even go as far as to say it is the whole point of the bill!  You are right.  Most people who use food stamps are already buying food, but they are buying food at the expense of NOT buying something else.  Maybe it is clothes, maybe they are getting behind on rent, whatever it is, by having stamps to buy discounted food, they can use that extra money to stimulate the economy elsewhere.

When it comes to the tax credit, you have twisted my words all up.  By saying, “It will go right into a Big-Mac and not in their pocket,” I am in no way saying they will blow it on “frivolous items.”  I’m saying they will use it immediately because they will have an immediate need for the cash.  They will use it on food (Big-Mac), or they will use it on gas to get to work (if they are lucky enough to have a job, in an economy that is currently without stimulus).  You said, “I don’t know what makes you think that a person who is struggling to make ends meet isn’t going to save money either.”  That is the whole point.  If they are struggling to make ends meet, that means that they don’t have the ability to save!

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One Response to “A Stimulating, Stimulus Debate: Part 2”

  1. Justin February 12, 2009 at 2:45 pm #

    I agree with kareem’s overall position – and I really like his position on the effect of food stamps. I think Doug misses Kareem’s point in his response. Kareem’s point, it seems to me, is that food stamps are not stimulus becuase people are already getting food stamps and, thus, this money will be going towards programs that already get funding from other sources, etc….. No additional money is being injected into the system. The only way that additional money would be injected into the system via a food stamps route would be if the stimulus made food stamps more widely available – if it increased the number of people who were able to spend more on food. However, Kareem rightly points out that this would be unfortunate because the stimulus is a one-off deal. Thus, the rug would be pulled out from underneith the program: it would expand its reach and then it would lose the fundign that permitted it to expand its reach in the first place and, as a result, it would be underfunded and everyone on stamps would suffer.

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