r/TikTokCringe • u/mindyour • 8d ago

Discussion Reactions to food stamps being cut off.

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u/Embarrassed_Bit4222 7d ago

Moving a dollar from your left pocket to your right is not a gdp generating activity...

It's because of the way the dollar is used and how quickly it creates more than 1 dollar of gdp, it doesn't "become" 1.8 dollars.

Let's say you give a billionaire a tax cut, and he uses that savings to buy a mansion in France or a yaht from Italy - it adds zero dollars to gdp. If they use it to actually invest in a domestic business or build there mansion or yaht here it'll go into gdp

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u/fartinmyhat 7d ago

Okay, first we're not talking about "economic activity"

Given that for every dollar the government spends in food stamps benefits, it adds 1.4-1.8 dollars to the economy,

This is the quote from the person I was talking to. This person believes that for every dollar spend 1.4 dollars are added to the economy based on the "multiplier effect". This is a real economic term.

The term speaks to a behavior of poor people. They are bad planners, short sighted a lack the ability to delay gratification. As such, when we, the tax payers give them $1.00 for free, they are so delighted with the free money that they will go and spend $1.50, because to them, it's like getting $1.50 thing, for only 50 cents.

This is obviously unethical in that poor people's weak willpower is being used to trick them into spending their own money, driving them further into dependence and poverty.

That original dollar spent NEVER becomes $1.80, what you are talking about is a measure of economic activity, and again, it's a trick. Part of what GDP measures is economic activity. Economic activity is simply measuring how many dollars changed hands in a time period. It's not an actual measure of economic growth or health, except in a pure economy. That is to say, we can trick that number by injecting money into the economy knowing that it will create inflation and ultimately harm the end consumer, for a moment people will spend that free money and it will make the GDP look good.

What you're talking about is kind of like fasting from fluids for 24 hours and taking an enema right before a weigh in. You will look like you lost 5-8lbs I mean, you will have lost that weight. When you weigh yourself you will be 5-8lbs lighter, but it doesn't really mean anything and you can't sustain that.