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> give a million hungry people $20 each, and see $20M return to the economy the next day as they spend it on food. That’s not a return, the economy doesn’t wor

> give a million hungry people $20 each, and see $20M return to the economy the next day as they spend it on food. That’s not a return, the economy doesn’t work that way.

paulryanrogers 5y ago
It enriches food producers, distributors, and servers. Assuming those functions aren't already consolidated into a megacorp I'd say it has been more beneficial than pushing up numbers in some billionaires account.
- xondono 5y ago
  And it impoverishes those who you took those 20M$. You can’t assess real impact without taking that into account.
  - romwell 5y ago
    A billionaire wont be "impoverished" by that. I'll play my tiniest violin to their loss.
    - xondono 5y ago
      The issue is that there’s an amazing amount of overlap between the people who pay and the people who receive, making the exercise quite pointless. Even if you took all the wealth of billionaires and found a way of liquidating that at that price (you can’t, but let’s assume you can), then divide by all US citizens , you’ll see a pretty insignificant number.
      - paulryanrogers 5y ago
        Who says the hoarded bounty has to be evenly distributed? IMO it should go to those who need it most. And even if the individual bump is small there's also one less thumb tipping the scales. Combined with campaign finance reform, more rigorous enforcement of bribery laws, and dropping first-past-the-post elections and things could really turn the corner.
      - romwell 5y ago
        >Even if you took all the wealth of billionaires and found a way of liquidating that at that price (you can’t, but let’s assume you can), then divide by all US citizens , you’ll see a pretty insignificant number. The hell you are talking about? https://www.theguardian.com/business/2014/nov/13/us-wealth-inequality-top-01-worth-as-much-as-the-bottom-90 https://www.theguardian.com/business/2014/nov/13/us-wealth-i...
romwell 5y ago
You seem to be confusing the concept of money going into and out of the economy with "return on investment".
- sharemywin 5y ago
  It can work that way if: 1. there's enough market competition. monopoly power and rent seeking is low. 2. the stimulus is slowly introduced to give time for the market to react. 3. the mostly state regulations but also federal regulations are small enough to all new business to form. and those small businesses have access to capital. 4. all of the above are reasoned and tweaked by rational adults with a background in statistics, science and engineering instead of idiots with slogans. Obviously that's a fantasy land. so here we are.
- xondono 5y ago
  Parent called it a return. The “return”, or benefit of the operation can’t be properly understood without taking into account that you’ve taken that 20M$ from some people to give it to (presumably) others.
  - mecha_ghidorah 5y ago
    I don't think they called it a return, they said it did return. They don't mean it in the sense that there was a profit made in terms of benefit, the benefit they are describing comes via the money changing hands and allowing all the people it exchanges through being able to get something. You give it to the hungry, they buy food, the people who run places that sell food do things like buy new clothes and tvs, the people who make clothes and tvs invest in things, etc. At least as I read their argument they are suggesting a "trickle up" effect, whereby cash in the hands of people who aren't in a position to just park it in real estate or something gets spread around and improves the overall flow of cash in an economy, not the overall amount of cash
q1w2 5y ago
If you think of the fundamental concept of a trade. Person A has too many apples. Person B has too many oranges. Person A and B trade half of their produce, and now they each have a healthier/balanced diet. Being healthier means their farms can produce even more, and the supply more produce to the local community. It's a win-win-win. That's the fundamental basis of economy. Theoretically, if you actually HAD a million starving people, then yes, feeding them from taxation proceeds (or even money creation), is indeed a net benefit to the economy, because they then are able to work, and bring their skills/labor to the market to further stimulate the economy. In that way, events like starvation, plague, or even sudden economic downturns, can damage the economy beyond the initial scope of their impact by robbing the economy of labor, transport, etc... For this reason, "stimulus" makes sense in these transitionary times. Of course, the negative effect of stimulus is to temporarily distort businesses by flooding certain resources at below market rates - causing a smaller scale damage to the overall disruption. You have to do the math to determine if it's worth it. On the other hand if there's no sudden change - no crisis, then stimulus is just permanently distorting markets - which is costly in addition to damaging. If you're feeding literal "starving" people, that's one thing - but if you're sending them checks so that they can increase their discretionary spending - that may look like a good thing because spending is increased, but you're not really creating value as in the original example. tldr: Feeding actual starving people (or paying for other critical non-discretionary spending) can be smart economic decision if well targeted. Increasing the money supply so that people can spend more on discretionary spending damages the overall economy.

> give a million hungry people $20 each, and see $20M return to the economy the next day as they spend it on food. That’s not a return, the economy doesn’t work that way.

paulryanrogers 5y ago

It enriches food producers, distributors, and servers. Assuming those functions aren't already consolidated into a megacorp I'd say it has been more beneficial than pushing up numbers in some billionaires account.

xondono 5y ago
And it impoverishes those who you took those 20M$. You can’t assess real impact without taking that into account.
- romwell 5y ago
  A billionaire wont be "impoverished" by that. I'll play my tiniest violin to their loss.
  - xondono 5y ago
    The issue is that there’s an amazing amount of overlap between the people who pay and the people who receive, making the exercise quite pointless. Even if you took all the wealth of billionaires and found a way of liquidating that at that price (you can’t, but let’s assume you can), then divide by all US citizens , you’ll see a pretty insignificant number.
    - paulryanrogers 5y ago
      Who says the hoarded bounty has to be evenly distributed? IMO it should go to those who need it most. And even if the individual bump is small there's also one less thumb tipping the scales. Combined with campaign finance reform, more rigorous enforcement of bribery laws, and dropping first-past-the-post elections and things could really turn the corner.
    - romwell 5y ago
      >Even if you took all the wealth of billionaires and found a way of liquidating that at that price (you can’t, but let’s assume you can), then divide by all US citizens , you’ll see a pretty insignificant number. The hell you are talking about? https://www.theguardian.com/business/2014/nov/13/us-wealth-inequality-top-01-worth-as-much-as-the-bottom-90 https://www.theguardian.com/business/2014/nov/13/us-wealth-i...

romwell 5y ago

You seem to be confusing the concept of money going into and out of the economy with "return on investment".

sharemywin 5y ago
It can work that way if: 1. there's enough market competition. monopoly power and rent seeking is low. 2. the stimulus is slowly introduced to give time for the market to react. 3. the mostly state regulations but also federal regulations are small enough to all new business to form. and those small businesses have access to capital. 4. all of the above are reasoned and tweaked by rational adults with a background in statistics, science and engineering instead of idiots with slogans. Obviously that's a fantasy land. so here we are.
xondono 5y ago
Parent called it a return. The “return”, or benefit of the operation can’t be properly understood without taking into account that you’ve taken that 20M$ from some people to give it to (presumably) others.
- mecha_ghidorah 5y ago
  I don't think they called it a return, they said it did return. They don't mean it in the sense that there was a profit made in terms of benefit, the benefit they are describing comes via the money changing hands and allowing all the people it exchanges through being able to get something. You give it to the hungry, they buy food, the people who run places that sell food do things like buy new clothes and tvs, the people who make clothes and tvs invest in things, etc. At least as I read their argument they are suggesting a "trickle up" effect, whereby cash in the hands of people who aren't in a position to just park it in real estate or something gets spread around and improves the overall flow of cash in an economy, not the overall amount of cash

q1w2 5y ago

If you think of the fundamental concept of a trade. Person A has too many apples. Person B has too many oranges. Person A and B trade half of their produce, and now they each have a healthier/balanced diet. Being healthier means their farms can produce even more, and the supply more produce to the local community. It's a win-win-win. That's the fundamental basis of economy. Theoretically, if you actually HAD a million starving people, then yes, feeding them from taxation proceeds (or even money creation), is indeed a net benefit to the economy, because they then are able to work, and bring their skills/labor to the market to further stimulate the economy. In that way, events like starvation, plague, or even sudden economic downturns, can damage the economy beyond the initial scope of their impact by robbing the economy of labor, transport, etc... For this reason, "stimulus" makes sense in these transitionary times. Of course, the negative effect of stimulus is to temporarily distort businesses by flooding certain resources at below market rates - causing a smaller scale damage to the overall disruption. You have to do the math to determine if it's worth it. On the other hand if there's no sudden change - no crisis, then stimulus is just permanently distorting markets - which is costly in addition to damaging. If you're feeding literal "starving" people, that's one thing - but if you're sending them checks so that they can increase their discretionary spending - that may look like a good thing because spending is increased, but you're not really creating value as in the original example. tldr: Feeding actual starving people (or paying for other critical non-discretionary spending) can be smart economic decision if well targeted. Increasing the money supply so that people can spend more on discretionary spending damages the overall economy.