November 30, 2010

Welfare Talking Points #1

So after my last video on how to fix the USA’s economy, I saw a lot of ignorant comments in the comments section about WELFARE.

They weren’t NEW ignorant comments, they were the SAME ignorant comments that you hear over and over. Apparently nobody out there is challenging people on their declarations, and allowing the virus of ignorance to spread.

So I wanted to make a list of facts and talking points for progressives when confronted with these conservative... well, let’s call them what they are-- they’re LIES, and stop the spread of ignorance in it’s tracks.

So let’s go down the list, and tackle them one by one, shall we?

1) Welfare spending is the reason our government is in debt.

If you had the choice between giving somebody a dollar and getting back either $1.50 or $0.80, which would you choose? Hold that thought.

According to The Federal Government is committed by law to spending 557 billion on welfare in the year 2010. Which seems like “Oh my! That’s a lot of money!” Which, for one person, yeah it is. But for our federal government, not so much.

Especially when you compare that to the $895 billion we’re committed to spend, by law on Defense spending. Which doesn’t account for the $711 billion in our discretionary spending on stuff like the War in Iraq and Afghanistan, and useless cold war-era weapons that we don’t even use, and never will.

Next you have to take into account what we get for those dollars spent.
Most economists agree on the following figures, including conservative ones:
Welfare spending has a fiscal multiplier of about 1.5-- while military spending has a fiscal multiplier of 0.8.

To which you might say, “wow, you just said some numbers, but what the hell does that mean? It means that for every dollar our gov’t spends on welfare, we get one dollar and fifty cents back in the form of GDP. With military spending, for every dollar we spend, we get back $0.80.

That seems really stupid. And that’s because it is. Which is why politicians frame their arguments about or disgustingly wasteful military spending as being “patriotic” or “supporting the troops.”
How much support actually goes to our troops? You, know, like after they come back from getting shot at and having their legs blown off?

According to the White House’s own figures, we’re slated to spend $125 billion on veterans affairs. And we all know about staffing shortages and underfunding that goes on in our VA system. So clearly this isn’t about supporting our troops.
For those who don’t care about human lives, and only the hard economics, I want to ask you again: If you had the choice between giving somebody a dollar and getting back either $1.50 or $0.80, which would you choose?
Now for the humanitarians out there, if you had to choose between giving somebody a dollar to feed their family, knowing you’d get back $1.50, or give somebody $1 knowing that your next door neighbor would have his legs blown off and you’ll only get back $0.80, which would you choose?


  1. Dug it. And I couldn't believe talking point #2 even had to exist. I mean, I'm glad someone pointed it

  2. I agree that welfare is a small slice to a far too large pie that is government spending. The only issue I have is your blanket statement about the "Keynesian Multiplier." Although there is wide agreement that the multiplier *might* exist, many, especially right leaning economists do not think it matters. The reason is that GDP is a very poor measure for actual wealth.

    For example here is a thought experiment from Donald Boudreax, an economist:

    "If the government conscripted half of the US population to dig holes all day and conscripted the other half to fill them back in, and paid each of us a billion dollars a day for the task, and valued holes that were dug and holes that were filled in at a trillion dollars a hole, then GDP would be very very large, unemployment would be zero and there would be no stimulating effect and we would soon be dead from starvation."

    What he is saying is that raw dollars do not really mean much and wealth is measured not by how many green denominations printed by the state. And the bigger picture is that welfare really isn't stimulating the economy. The government, in giving welfare is allocating resources in a less efficient way: That is the cold economics of it. Welfare is not more beneficial to the economy than private investment. Welfare is a trade-off; a needed safety net paid for by our incredible wealth.

    Another way to look at is as economists do; look at the situation with both hands. The money given to the recipients of welfare is taken from someone that would have used it for other purposes (those purposes could have had a much higher effect than the "$1.52").

    You also say that the military has a multiplier of .8? I would read Keynes and Krugman for a better understanding of Keynesism. Their biggest test case for "proving" the $1.52" multiplier is WWII military spending...

  3. O I see where you got .8. Robert Barro. If you concede that Keynesism is wrong in the case of military, as Mr. Barro argues, than you are also conceding the fact that welfare does not have the net benefit you are reporting.

    For further analysis on what you are talking about: .

  4. "many, especially right leaning economists do not think it matters."

    Uh, don't you think they'd be a tad bit biased on such matters?

  5. Yes, just as left leaning ones would be biased. And it is not so much "bias" as in being in a party, but rather a different school of thought. Leftists generally like Keynes, Krugman, etc.. and Rightists generally like Hayek, Friedman, etc..

    I was just responding to this, which, besides being incorrect, is also confirms that there are "leaning" economists:
    "Most economists agree on the following figures, including conservative ones:
    Welfare spending has a fiscal multiplier of about 1.5-- while military spending has a fiscal multiplier of 0.8."

    They see things differently. I guess you could call that bias. But the principles of economics remain the same; principles that were greatly misrepresented in this post.

  6. "And it is not so much "bias" as in being in a party, but rather a different school of thought. "

    Sure it's biased. Hayek and Friedman (Friedman by the way, was for something called a "basic income", which is a massive welfare program if I've ever heard of one) bias all their observations and findings towards their mythological "free market" abstraction. Sure, left leaning economists are biased towards their preferences as well, but that doesn't change the bias of economists like Hayek and Friedman. Which leaves the question, if one are going to have an automatic bias against such programs anyway, why should I care that "many, especially right leaning economists do not think it matters."? Of course they won't, they're *biased* against such findings.

  7. Ok... I think you completely missed the point of the first post. I was not arguing against any form of welfare. I was pointing out the lack of research and understand of economic theory in his reasoning. He cherry picked data points from different places and misrepresented Keynesian theory. He grabbed research from Robert Barro to get the "$0.80" military spending multiplier and got the "$1.52" from Keynes.

    Funny though: Barro writes, in the same work that welfare also does not create a multiplier above 1. Just shoddy research. And even further Keynes is the one who said that it is, in fact, military spending that gives a 1.52 multiplier.

    Again my point is more specific than: evil republicans will hate welfare no matter what.

    But I also can't help going off on your tangent...

    I support the reverse income tax, which is what Friedman was talking about. It would be a great improvement from what we have now. It would get rid of DHHS and every welfare case worker, social security, medicare, medicaid, etc. It is not massive at all. It would be a welfare program actually providing welfare, not favors and jobs to politically connected.

    But again, my original point had nothing to do with welfare...

    Also do me a favor: name me 3 economists who think the free-market is a "mythological abstraction." Even Marx knew and understood economics of the free market. He just didn't like it.

  8. Mr. Patriot, why are my posts getting deleted? :(

  9. Nobody's posts are getting deleted. You might have a problem with your browser?

  10. Actually, apparently his/her comments are getting deleted. I got his/her last response in email, but when I went back to respond, it was gone :P

    Blogspot probably ate them up.

  11. Weird. It might be because they are posting anonymously.
    It might be because they are deleting them themselves?

  12. Yeah, blogspot does that a lot, especially with anon posters.

  13. It may be this Google Chrome...

    Tirade, feel free to respond to my ghost post. I won't think you are insane for responding to seemingly nothing. haha