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Politics House Republicans Cut SNAP

Discussion in 'Tilted Philosophy, Politics, and Economics' started by snowy, Sep 20, 2013.

  1. Aceventura

    Aceventura Slightly Tilted

    Location:
    North Carolina
    Cuts?

    [​IMG]

    CBO | An Overview of the Supplemental Nutrition Assistance Program

    The intent of the 2009 Recovery Act was to stimulate the economy and some held the view that increasing SNAP benefits, assuming the money would be spent, would have a stimulative effect. When the increase occured everyone who voted on it knew there was a sunset provision. Some hold the view government spending of this nature is not stimulative to the economy and at best would have a short term impact. Longer-term it is best that resources be directed towards investments will real returns if economic stimulus is the goal.

    According to the CBO, even after the "cuts" well beyond 2020 SNAP spending will far exceed pre-recession levels. Is US poverty the new normal, is it the new American Dream? I hope not.
     
  2. Baraka_Guru

    Baraka_Guru Möderätor Staff Member

    Location:
    Toronto
    It might have something to do with unemployment still being more than 30% higher than pre-recession levels.

    Let's not be too quick to forget how slow the recovery has actually been for the lower and middle classes despite the wealthy continuing with business as usual.
     
  3. redux

    redux Very Tilted Donor

    Location:
    Foggy Bottom
    When the Bush tax cuts were enacted in 01 and 03, everyone who voted on them knew there were sunset provisions.

    A wide range of economists hold the view that every $1 on SNAP benefits generates $1.75 in economic activity.

    As demonstrated in your charts, the far greater rate of increase in SNAP participation and spending was during the Bush years and as Census data indicates,:

    SNAP (the Supplemental Nutrition Assistance Program, formerly known as food stamps) lifted 4 million people above the official poverty line in 2012, according to new data that the Census Bureau released today. That’s the highest level on record (see chart). (Census doesn’t adjust its data for population growth, but we did and confirmed that the share of the population that SNAP lifted out of poverty also stood at a record high.)​
    The official poverty measure does not count SNAP benefits when calculating a family’s income. But, Census calculates how many people would be lifted out of poverty if it counted SNAP benefits as income.​
    [​IMG]
    As to the CBO report, it projected that SNAP spending will fall to 1995 levels as a share of gross domestic product (GDP) by 2019.​
     
  4. Aceventura

    Aceventura Slightly Tilted

    Location:
    North Carolina
    Absolutely. If the intent is to stimulate economic activity what occurred in 2009 legislatively failed. Perhaps it is time to acknowledge that and try a different approach. I think we would be better off with policy that reduces the need for SNAP.
    --- merged: Nov 8, 2013 at 12:41 PM ---
    I know. What does this have to do with SNAP?



    Perhaps that is inadequate. Perhaps we need a 1:2 ratio, 1:2.5, 1:3...what if normally gov. spending is 1:2 and we enact a 1:1.75 program - is that going to be stimulative? Of course not. We can take isolated bits of information here and there, but understanding the information is different and requires more effort.
     
    Last edited by a moderator: Nov 15, 2013
  5. redux

    redux Very Tilted Donor

    Location:
    Foggy Bottom
    How is a $1:75 in economic activity: $1.00 in spending a failure? How is keeping 4 million people out of poverty last year a failure?

    BTW, Moody's (Mark Zandi, McCain's economic advisory in'08) found that SNAP was the best provision in the ARRA in stimulating the economy.
    Food stamps offer best stimulus - study - Jan. 29, 2008
    --- merged: Nov 8, 2013 at 12:49 PM ---
    Just pointing out the Republican/conservative double standard wanting to make the Bush tax cuts permanent despite the fact they did little to simulate the economy and were the second largest contributor to the current debt (after the Iraq war).
     
    Last edited by a moderator: Nov 15, 2013
  6. Baraka_Guru

    Baraka_Guru Möderätor Staff Member

    Location:
    Toronto
    How has it failed? Or are you suggesting that government should control the economy?

    You mean like boosting the minimum wage?

    Also consider this:


    View: http://youtu.be/5xCB2b_-ioc


    It might be too "in a nutshell" in this clip, but the gist of a broader problem is indicated: Even when things are going "well," they aren't going as well as they used to. Some will argue that it's getting worse. The very nature of work is changing for the lower and middle classes, and you wonder why people become dependant on SNAP, even temporarily.

    What sort of policy would help deal with this problem?
     
    Last edited: Nov 8, 2013
  7. Tully Mars

    Tully Mars Very Tilted

    Location:
    Yucatan, Mexico
    Anyone else here old enough to remember when one income supported a family?
     
  8. Baraka_Guru

    Baraka_Guru Möderätor Staff Member

    Location:
    Toronto
    My parents raised six kids on one and a half working-class incomes, which afforded modest middle-class comforts.

    The rich get richer somehow. Some of us are more aware than others of how that works. It's not that the rich are that much more awesome or useful today than they were 40 years ago; it's mostly that they've gotten better at extracting wealth from economic activity with the help of recent trends and newer technologies.
     
  9. Tully Mars

    Tully Mars Very Tilted

    Location:
    Yucatan, Mexico
    This was probably when CEO's and the like made 40-50 times the average employee. Now it's more like 100's of times more. The CEO's have all more or less joined the "never is enough," "greed is good" and "whatever it takes to get ahead, whoever you crush is fine" clubs. The wealthy keep getting more wealthy by paying less or moving production over seas. They bitch and moan about the corp. tax yet almost no major US corp. pays anything even near it, often they pay zero or get returns due to the corp. wealth system. Plus they no longer have any estate tax to speak of so if your family is wealthy you're secure and will be wealthy too. So money that used to go to pay for things like say pay down the debt or infrastructure is passed down sans tax to children and family members of wealthy people. You know because people like Paris Hilton et el would only inherit 50 million if their was still an estate tax and have to suffer because it. Now the estate has been successfully labeled the "death tax" and Paris and her friends will get the entire 100 million.
     
  10. Aceventura

    Aceventura Slightly Tilted

    Location:
    North Carolina
    When I was young I was really enjoyed rocket science and everything related to NASA. There is a concept called escape velocity. Anything less than what is needed is failure, even the smallest amount. In order to understand my point in response to your data regarding 1:1.75, one would need to think in terms of what is needed to accomplish the goal. Additionally, there is the issue of potentially going from a better ratio to a worse ratio.
    --- merged: Nov 10, 2013 at 8:33 PM ---
    Stated objective compared to actual result.

    Boosting the minimum wage is inflationary. We can easily put another zero in every price (wage is a price of labor)- what good does it do? Make a $5/wage, $50. Make a $2 loaf of bread $20. What is the point? The market will revert to real relative values if it is free to do so. What you really want is not a minimum wage adjustment but wealth redistribution - why not say that directly. rather than government trying to micro-manage wages and the resulting impact on prices, why not simply tax wealth and give it to the poor. Isn't that more efficient? It is certainly more honest about what the goal is.
    --- merged: Nov 10, 2013 at 8:43 PM ---
    ...when families had one vehicle....small homes...ate at home...did not have computers...had less vacation...saved money! The "Leave it to Beaver" period from about 1950 - 1965, the post WWII boom period when the US had a strong global economic advantage compared to the rest of the Western world. It is interesting how a brief period is so ingrained in US thinking.
    --- merged: Nov 10, 2013 at 8:49 PM ---
    We know how it happens. We have policy that penalizes those attempting to accumulate wealth. Those with wealth do not get harmed. Those who overcome the obstacles of wealth accumulation are rare and once they make it they do not get harmed. For example, compare starting a legal business in a city like New York today compared to the same 50 years ago.
     
    Last edited by a moderator: Nov 17, 2013
  11. Tully Mars

    Tully Mars Very Tilted

    Location:
    Yucatan, Mexico
    Even after WWII women in the work force was not that common as it is today, wasn't necessary for a middle class family. And it wasn't some brief period after WWII. Women worked during the war and most returned to the home after the troops returns from overseas. For basically centuries it was one wage earner (yes, usually the man) then it became the norm for both parents to maintain employment. I went to grade school in the 60's and High school late 70's. My dad was very clear that no wife of his would work. Leave it to Beaver had been in reruns on afternoon TV by that time for a decade or so. My family was middle class, house in the 'burbs, two cars. All my friends were more or less the same. My best friend in grade school had a stay at home mother. They lived down the street. His mom was the boy scout troop leader his dad was a janitor for the local school district. They had two cars and a little nicer house then ours. Of course this is back when somehow CEO's managed to survive on 40-50 times the pay of average workers rather than the 3,4 or 500 times that of workers today. Now they just can't keep up with the rise in health care cost for workers or often COLA increases. They still manage to award themselves multi-million dollar bonuses and stock options but increased pay for workers is out of the question. Apparently why they can't live off the 40-50 times more than average workers like they used to is a real mystery.
     
    Last edited: Nov 10, 2013
  12. Baraka_Guru

    Baraka_Guru Möderätor Staff Member

    Location:
    Toronto
    With these kinds of things, it's pointless to grade it on a pass/fail criterion. It generally was successful in doing what it wanted to do: save/create jobs, provide relief to those who needed it, etc. Perhaps what you're referring to is the stated figures set as goals and the fact that it was too underfunded to reach those goals. The net effect, nonetheless, was that it stimulated the economy.

    It was better than doing nothing. It would have been better to do more. What is your position?

    You're grossly overestimating the economic impact on prices when increasing minimum wages. I don't suspect the average person understands the complex workings of macroeconomics, so I'm not surprised if such a misunderstanding is prevalent among opponents to minimum wage legislation. The impact of raising the minimum wage by $1 is actually much closer to an increase of $0.01 in prices (if that) in the same industry in which minimum wages are prevalent. The impact on overall prices (i.e., nationally) is closer to $0.005. This means that in the fast-food industry, where minimum wages are prevalent, a minimum wage increase of, say, $4, will possibly increase the cost of a hamburger by $0.04. Let's make it simple and say it's a change of 1%. New Yorkers can currently buy a "Big Mac value meal" at McDonald's for $6.79. A 25% increase in minimum wage (as proposed by Obama) may mean the price will increase by $1.70 (or 2.5%), making it $8.49.

    "Well," you may say, "won't that stick it to the consumer, especially low-wage earners who depend on cheap meals?" It may seem so, but considering many low-wage earners make minimum wage, their wage will increase 25% (and even a "decent" wage of, say, $8.50 will see a 6% wage increase). With their current wage of $7.25, it will take them an hour to buy the value meal, and they'd get $0.46 in change (we'll keep the gross wage and leave out sales tax just to make it easy). But with the increase to $9/hour, their hour's labour will get $0.51 back from the value meal at the new, higher price. So they're ahead of the game.

    It's true that the industry will "pass the extra cost onto the customer," but many customers can absorb that, and many of them (the minimum-wage earners) will have an easier time of it. The other way to look at it is this: Perhaps it's not that a $9 minimum wage is too high but that $6.79 for a Big Mac value meal is too low. Especially, perhaps, in a nation where the average income is something like $45,000—an income a minimum-wage earner would have to work over 6,200 hours, or about 776 eight-hour shifts, to achieve. In other words, a minimum-wage earner would have to work about three years (full-time, no vacation) before they could earn what would be considered "average" within a year.

    There is a similar reason why New Yorkers can also get $10 T-shirts, but we won't get into that here.

    Calling it something else, or referring to what would act as an umbrella term, doesn't change anything except the ideological overtones.

    One man's "wealth redistribution" is another man's "markets aren't always efficient and are prone to failure, so corrective measures to reduce economic inequality is best for a stable economy."

    It's incredible how quaint things were before post-industrial society. Now it isn't realistic for many households to have only one vehicle, or have no computer.

    And housing prices actually remained quite flat until 2000. I'm not sure why that is, given the increases in home size. It might have something to do with construction and related wages not being that great (though much better than $7.50/hr.).

    This statement is all over the place, and it makes it seem like you don't know how the rich get richer.
     
    Last edited: Nov 10, 2013
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  13. redux

    redux Very Tilted Donor

    Location:
    Foggy Bottom
    Ace...its' not rocket science.

    SNAP is cost-effective; you just want to quibble over how effective.

    SNAP is efficient; the lowest rate of fraud and abuse of any safety net program.

    SNAP is not a disincentive to work and does not induce laziness unless you believe folks would rather have $4.50/day (per person) than a job paying a decent living wage.

    But most of all , SNAP contributes to reducing the food insecurity faced by millions of families w/children, seniors and disable on fixed incomes every day and Republican proposals to cut the program so drastically is simply callous ideological budget cutting in the name of debt reduction w/o consideration of the economic or social impacts.
     
  14. Baraka_Guru

    Baraka_Guru Möderätor Staff Member

    Location:
    Toronto
    You didn't need to go into that much detail (yet anyway). I would have first asked how a 75% ROI (essentially) could be considered a failure, outside of the failure to invest much more money into it or the failure of taking money out of it.
     
    Last edited: Nov 10, 2013
  15. Aceventura

    Aceventura Slightly Tilted

    Location:
    North Carolina
    For the US the Leave It To Beaver period, re-runs or not, is romanticized. The primary point is that the US had a large global economic advantage during the period. We could argue that we had the luxury of having 50% (I know it is not exact) of the population not in the workforce. As you mention during the war women worked. In the depression any work was hard to find. In agriculture, the whole family worked. In some industries in the US we even had child labor issues. During a large part of US history we had slavery, that afforded some wealthy women not to work in the South.
    --- merged: Nov 11, 2013 at 8:17 AM ---
    Politicians should not oversell their proposals. It would be better if they sold us on their real goals and objectives.

    Here is the difference in our thought process, it is a difference with DC also. I have to give an illustration.

    If we have a school with 100 children needing free lunch assistance, and we have a private charity meeting that need. If government comes in and says the private charity can no longer provide the assistance and implements a new government program. If the program meets the needs of 90 children we can look at the result in a few different ways.

    1) Government successfully provides 90 lunches for children.
    2) Government fails to meet the needs of 10 children.

    Both are true. How would you measure the success of government intervention? I would say government failed. I would say government regulation was harmful. I would say the net result was bad!



    I understand the impact of wages on pricing pretty well. I agree that a detailed discussion is beyond the scope of what we can do here - in some industries employee costs (includes more than wages) can be well over 50% of costs. An increase in employee cost would impact 50% of the cost structure. This may or may not be passed on in pricing depending on a number of factors - however without question it is inflationary. If the wage is artificially high, alternatives will be sought - i.e. technology. It actually then creates a gap. The value of higher level employees increases, the value of lower level employees decreases, the value of some goes to zero.


    No. There is a difference between tax policy used to accurately reflect social costs, i.e. cost of pollution and simple redistribution of wealth.

    As a compromise, what is your number for redistribution? Should every human on this planet get $10,000 per year, $20,000, what would be fair, given global wealth? Should Americans get more than Ethiopians? If we taxed wealth and then gave every person a check every year, what would the result be? It is a thought exercise - I play it out in my mind often, the end result is never good.
     
    Last edited by a moderator: Nov 18, 2013
  16. Tully Mars

    Tully Mars Very Tilted

    Location:
    Yucatan, Mexico
    It's hard to take what you say even slightly serious when you post BS like this. Yes, slavery afforded some wealthy women in the south not to work, not all just some. Wealthy women in the north were forced to work.

    I understand it's not in your nature to accept facts that don't fit into a historical view you'd like to be true but when you post obvious crap as fact I think you're kidding yourself if you think anyone's taking you serious.
     
  17. Aceventura

    Aceventura Slightly Tilted

    Location:
    North Carolina
    Math is math. SNAP involves math. Projecting the trajectory of a rocket is not much different than projecting the trajectory of anything.

    I want to quibble over how you measure effectiveness. How you measure alternatives.
     
  18. redux

    redux Very Tilted Donor

    Location:
    Foggy Bottom
    How about comparing it to making the Bush tax cuts permanent, in terms of the multiplier effect.

    From testimony of McCain's former economic advisor

    [​IMG]
     
  19. Aceventura

    Aceventura Slightly Tilted

    Location:
    North Carolina
    I did not comment on women in the North. I don't understand what the issue is. In the South, in some cases due to slavery, many whites including women were at an economic disadvantage. Low skilled whites, requiring a wage, could not compete with the institution of slavery. The economics of slavery is a compelling topic to study. I have never really studied the economics of the North during this period.
     
  20. redux

    redux Very Tilted Donor

    Location:
    Foggy Bottom
    We can compare it to Dickens' England :)

    [​IMG]
     
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