Let Them Eat Tax Cuts!
Reported by Ellen - July 12, 2009 -
On yesterday’s (7/11/09) Forbes on Fox, much of the mostly-conservative panel argued with a straight face that poor people would be better off with more corporate tax cuts instead of food stamps. Out of seven people, only panelists Quentin Hardy and Evelyn Rusli saw the mean-spirited ridiculousness of the suggestion. With video.
Host David Asman offered a suggestion (clearly not his own) that “dishing out more foods stamps and welfare” is a stimulus for the economy. Guest Neil Weinberg agreed. “Absolutely,” Weinberg said. Emphasizing that he was not saying he agreed or disagreed with a stimulus he said, “If the point is to stimulate the economy, you want to get the money out the door. And these are spoon-ready programs. 97% of this money that you send out in food stamps gets spent that month.” In passing, he noted, “We have over 30 million people who are relying on this.” But it seemed as though the reason he mentioned that was not because of the need but because it showed how much of an injection the economy would get. He quickly added, “For every dollar you send out, about 1.4 dollars gets spent so you create jobs along the way.”
Asman broke in to say, “I thought we all agreed in the 90’s… that welfare is a drag, not only on the economy but on the individuals who take it.”
In fact, the Wall Street Journal agrees with Weinberg. It reported that part of the stimulus includes an increase in food-stamp funds.
Money from the program -- officially known as the Supplemental Nutrition Assistance Program -- percolates quickly through the economy. The U.S. Department of Agriculture calculates that for every $5 of food-stamp spending, there is $9.20 of total economic activity, as grocers and farmers pay their employees and suppliers, who in turn shop and pay their bills.
While other stimulus money has been slow to circulate, the food-stamp boost is almost immediate, with 80% of the benefits being redeemed within two weeks of receipt and 97% within a month, the USDA says.
The article goes on to discuss how merchants have come to rely on food-stamp money.
“Everybody knows this is a failed policy,” guest Mike Ozanian, Forbes’ national editor, said. I guess he doesn’t read the Wall Street Journal. He claimed that the only things food stamps do are increase the national debt and “taking money from one person and handing it another person.” In other words, it’s a waste of money, let people go hungry!
“Shame on you, David!” Hardy said (too bad he left out Ozanian). “These people are poor and they are hungry and you feed them. That’s what we do.” Calling “welfare queens” “a myth," Hardy continued by saying that the “tax-cuts-to-the-rich economy” didn’t work and while we’ve got to work through our economic difficulties, “meantime, you feed the poor.”
Asman insisted that if it was just a matter of money going from the rich to the poor, most people wouldn’t mind. (Right!) “But that sense of dependency on the part of recipients does ANYTHING but stimulate the economy,” I guess Asman doesn’t read the Wall Street Journal either.
Guest Evelyn Rusli agreed with both Hardy and Weinberg. “We have to look beyond the risk of dependency. When you have unemployment at 9+%, that’s a problem. Now, …(food stamps) is a quick jolt to the economy because not only does it feed people but that money… will help local businesses as well as those big stores, the supermarkets. That will, in turn, will encourage job growth.”
Guest Rich Karlgaard acknowledged “there might be a time lag” between the time of tax cuts and when jobs might be created, “but you’ve got to do the right things to ensure that you have a boon that lasts five, ten years… Now we’re in a world of hurt. CEO’s are too demoralized to hire people.” Never mind people who have lost theirs jobs or their homes and don’t have enough to eat. It’s those poor, demoralized CEO’s who really need help.
Asman said that during the Clinton administration, there was a boon after they cut back welfare spending (but there wasn’t the housing crisis, unemployment was at 5.4%, as opposed to 9.5% now and Clinton had other anti-poverty initiatives that these guys would probably squawk at).
Ozanian claimed, “If you increase welfare payments… the number of people on welfare is gonna increase, which is bad.” So it’s not the bad economy, it’s welfare, itself, that adds to the number of people on the welfare rolls. Right.
Guest Elizabeth MacDonald said, “People on the welfare rolls, they don’t want this culture of dependency. They don’t want to be trapped on the food stamp line. They want a job. So how do you get the jobs? …Corporate tax cut.”
In other words, let the poor get poorer (while the rich get richer) and it’s not only good for them, it’s what they really want!
Rusli said, “It’s not just about dependency… it’s about being able to put food on the table.”
“Everybody wants to help the poor,” MacDonald insisted. “But what’s the best way to help them? Keeping them on the dole or do they want to be productive?” She didn’t consider that maybe there’s a way to keep people eating decently AND getting them new jobs.
“The point is, we’re trying to stimulate the economy here,” Weinberg said. “What would be a faster stimulus here?” he asked Ozanian.
“I would say tax cuts,” Ozanian replied. “… And I would cut way back on government spending.”
“What about (food stamps) as a very short-term solution to the problem?” Asman asked.
“No, it’s terrible,” Ozanian said. “You give a person a food stamp, he eats today but he’s not going to eat tomorrow. You give him a job, he can eat for a long time.”
But nobody on the panel was talking about giving an unemployed person a job (unless they were talking stimulus money). They were talking about giving corporations tax cuts so that they could (theoretically) create new jobs.