Wednesday, April 18, 2012

Sod Off Wednesday: April 18

I came across this picture some time ago and promptly lost it. I'd been looking for it ever since. What you're looking at is a a listing of how much value each dollar of stimulus puts into the economy. 

So tax cuts for everyone pay off a lot more than tax cuts for the rich. Probably because the rich get to spend what they want and extra money won't change that. Their refund is just another number in the bank and is taken out of circulation. 
Tax cuts for others usually gets spent either on paying down debt or gets blown like they won a smallish lottery. That money stays in circulation by paying for goods which then goes toward salaries of staff who then respend it on other stuff, and around and around. Eventually it goes back toward the company owners and taxes, but before then a dollar has done more than a dollar's worth of work.

Investments in infrastructure not only gets an improved infrastructure which benefits pretty much everyone, but also has the money going into the pockets of the workers. Again, the workers spend it and the money circulates. 

Alright, sure, but unemployment benefits? Food stamps?
An unemployed person with an address is worth more, economically, than a homeless person. It costs less to help a person keep their home than it does to get them a new home once they're on the streets. And when the unemployed person gets a new job they get money circulating and pay taxes back to the government. In the long run the unemployed person pays back to the government what was given and then some. The homeless person, lacking an address and everything else that comes with having a home, has a significantly harder time getting a job. The investment required to get a homeless person back up to where they were before they lost their job is significantly higher and harder to repay than the person who was simply unemployed.  

What I've said here is seriously simplified and we've all heard people on different sides of the political spectrum argue the points. That's why I like the chart. It show there is a real world way of evaluating the value of the programs and which ones are worth a damn. This chart tells the supporters of Supply Side Economics (a.k.a. Reaganomics, Voodoo Economics, Trickle Down Economics, Fuck-You-I'm-Rich Economics) that they can all sod off. 

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