$1 of every $5 in US wallets in 2010 came from programs like unemployment & SS | Hacker News Reader

$1 of every $5 in US wallets in 2010 came from programs like unemployment & SS

nytimes.com

39 pointsdiogenescynic51 comments

Well as I said when Northern Rock collapsed, the best financial stimulus would be to refund everyone the income tax they paid for the last 12 months.

What exactly does that do for the people who've been out of work? 100% rebate on 0 is still 0, right?

Not to make a political statement out of things but you're saying you'd prefer they didn't get their unemployment, giving that money back to me and you as tax rebates instead? Trying to see how your suggestion is relevant to the article.

In this scenario, anyone who'd just lost their job would have a lump sum of 40% of their previous salary, plus whatever entitlements they had for unemployment. Anyone still in a job would have that cash to either pay down their debts or to spend on goods and services that would sustain/create more jobs. It's a win/win scenario.

So, cut taxes while increasing benefits?

You should run for Congress :)

The money would come from not bailing out the banks. Or rather, bailing them out via individual bank accounts. Power to the people!

We turned a profit on bailing out the banks, actually. Or close to one, maybe lost a negligible amount when you weigh AIG against the profitable bailouts.

The issue with stimulus via tax cuts (which actually constituted 1/3 of the stimulus bill we did get, you don't hear about that much, because it undercuts the obama as devil-socialist narrative), is that, as pointed out above, you're primarily putting money back in the pockets of rich people. They'll invest it and maybe that will trickle down a little but it's nowhere near the multiplier effect for the economy that direct consumer spending gets you. Poorer people spend the money, that gets it bouncing around in the economy.

As a general ideological predisposition, tax cuts for the rich as a primary policy goal could theoretically make sense (although I'd suggest a hard look at the last 30 years first), but as fiscal stimulus for a down economy it just plain doesn't add up.

You are also shoring up the banks balance sheets, remember. As others have said, money invested isn't dead - it is actively lent to others.

Money spent on Stella, kebabs and fags doesn't really count.

Poor people don't buy Stella, dude.

And you missed the point like 4x in this thread.. people weren't saying that funneling money to banks was unstimulative, they were saying that giving money to people who will consumer-spend it is more stimulative. This is pretty much accepted in the economic community.

Sounds like a fine idea to me, but not very stimulative. More money would be returned to high income individuals who are more likely to hold onto the extra cash.

I'd personally rather it go to infrastructure projects -- faster cheaper internet access, high speed rail, space elevators ;) -- and basic research.

"hold on to extra cash" is intuitive but it is not how our economy works. Anyone saving money has that money circulated into the economy, through stocks, bonds, or bank lending. In fact, it is the wealthy who have the surplus capital available to invest in ventures like those you mention. It is extremely stimulative.

Nostromo specifically said, " not very stimulative. More money would be returned to high income individuals who are more likely to hold onto the extra cash." Which is exactly correct -- poor people spend basically every penny they get because they're forced to, while wealthier people will either pay down debt or save. Thus for a fixed stimulus, your best bang for the buck is income supports for unemployed / poor because they will immediately spend it. Note also a big portion of our current economic climate is a lack of demand.

Try reading a couple months of Paul Krugman -- he explains this particularly well.

Krugman is a buffoon, his solution to every problem is " print more money".

I guess we should define "stimulative." I was talking about it in a job-creation sense.

Yes, wealthy individuals will put the money into stocks, bonds, or bank accounts - not under the mattress. But public companies' market cap rising a bit has a much less direct effect on jobs than creation of demand for local goods and services. Putting extra cash in a bank account is even worse -- a much simpler way of getting banks to lend is to reduce the prime rate, not to increase the savings rate.

Oh my I'm afraid your understanding of economics is very poor. Infrastructure funding can only come from tax money. Tax money can only come from the private sector. The private sector makes by money by using capital (savings). That is how it works. That is why savings are good and taxes are bad.

If his understanding of economics is poor, yours is even worse. All he saying is you get a better multiplier by giving it to people who will spend the money first on goods and services then on people who will put it directly into savings. And he's right, which should be obvious.

That is not true. That is redistribution wealth. You are taking the money away from the people are are making and giving to the people that are spending it. That makes no sense. Savings is what drives the economy. Without savings there would be no capital. omg.

Please tell me where this multiplier comes from? If money was multiplied through taxes the USSR would still be around and booming as they had an effective tax rate of 100%. So do tell please.

Actually, higher income individuals are more likely to spend income tax rebates. Lower income individuals are likely to save it or pay down debt with it.

http://www-personal.umich.edu/~shapiro/TaxRebates.pdf

http://papers.nber.org/papers/w16246

40%? My income tax last year was 11% of salary. If I go back a few years, before I bought my house and before my company had a 401k that I could divert a lot of money to, the highest I paid was 18%.

How does one get to 40%?

Be born in England.

How many dollars in wallets came from programs like the Department of Defense and the TSA? And how many came from programs related to research and teaching?

so is this why my $10 only has $8 of buying power?

So liquid cash, not assets, not investments? Seems pretty good to me, during a terrible recession.

Actually the article is talking about income. The current HN title is wrong. According to the linked article:

"Close to $2 of every $10 that went into Americans’ wallets last year were payments like jobless benefits, food stamps, Social Security and disability, according to an analysis by Moody’s Analytics."

I do wonder what the figure would be for actual assets. Surely much lower than 20%, but I guess that would be hard to even calculate.

I tried to use: Close to $2 of every $10 that went into Americans’ wallets last year were payments like jobless benefits, food stamps, Social Security and disability

But it was still way too long, so I had edit the title down to fit it in.

I don't know, maybe "20% of 2010 U.S. income came from..."?

I don't have editing powers, though.

With a growing poor population via the influx of immigrants getting out of our financial crisis will be an even slower process. This population is the 2nd largest and the fastest growing. They currently have minimal buying power. Case in point go to your local state park and witness America's future. The face of America in 30 to 50 years and the language we speak will be remarkably different.

Im sure this will be downvoted as it's totally NOT POLITICALLY CORRECT. But for me Im all about assimilation vs a massive population changing American culture. We are a melting pot and that's great but one who speaks English.

I dont view myself as a racist(im sure this sounds otherwise) ... but if you go to one of your local US state parks you just might get the slap in the face I did(i live in PA). Again this new culture currently has no buying power just sucking off our systems and it will be years before they have buying power as a population to help our economy.

as a population

Racism is a form of collectivism, and that phrase is indisputably collectivist: http://aynrandlexicon.com/lexicon/racism.html

I agree that America should be a melting pot once again, but if you're going to champion American culture consistently, you must wipe collectivist ideas from your mind. We are all individuals, independent from one another, and we must be judged and thought of individually.

Edit: to those that voted this down, why?

I'm not one of the downvoters, but my guess:

1. It's really irrelevant political squabbling. It's annoying, but even worse, that kind of sidetrack can ruin sites by bringing in people who seek nothing more than to argue. I've seen it on other sites. Probably a lot of people want to avoid that kind of slide.

2. Your apparent argument is illogical. "Racism is a form of collectivism, and that phrase is indisputably collectivist [and thus that phrase is probably racist]" reduces to "X is a form of Y, and Z is indisputably Y [and thus Z is probably X]," which can be substituted with "A murderer is a form of human, and you are indisputably human [and thus you are probably a murderer]." And if you didn't mean to imply that the phrase was tinged with racism because it was collectivist, then it's an irrelevant reference to Ayn Rand, and many people find Ayn Rand references annoying enough when they're on topic. It doesn't demonstrate anything either way.

"and many people find Ayn Rand references annoying enough when they're on topic"

That doesn't mean they should vote it down. It's a legitimate point of view. It's mainstream enough to the point that her views are now taught in major universities. We're not going away.

http://boston.com/bostonglobe/ideas/articles/2007/11/25/the_... http://en.wikipedia.org/wiki/North_American_Union </sarcasm>

ha i dont see the demise of America just a swift cultural change. Again, Im for assimilation not a majority cultural change.

As noted I never considered myself to be racist but after going to state parks in and around PA and MD I guess I am in this regards - sad to say. I finally felt what it feels like to be culturally lost and feel like a minority in my own backyard.

I challenge anyone reading this that was born here and or assimilated into our culture to go to a state park. You have no similar feelings and if you do can you go against the politically correctness of HN to admit this publicly?

Should I apologize in advanced for immigrating to the US next year?

Please don't. We're all immigrants here (other than the Native Americans). People have a selective memory.

paulpaul12 is having trouble splitting apart the ideas of:

1) cultural change due to changing minority/majority statistics

2) illegal immigration

His/her opinions seem to be largely based on the idea that idea #1 is undesirable, and that idea #2 is what is causing that, therefore idea #2 is 'bad.' The fault in this argument is that idea #1 can come about through other means, such as legal immigration, and applying the same logic would result in the conclusion that legal immigration is bad, which would be a far less popular idea (even amongst the 'kill the illegals' crowd).

The underlying theme here, though is resistance to change.

He also has trouble separating both (1) and (2) from:

(3) the Great Recession and possibly his own troubles

To me it just seems like classic "they took our jerbs" style scapegoating.

  > it will be years before they have buying power
  > as a population to help our economy.

This isn't necessarily referring to the recession. I would just give the benefit of the doubt.

no why should you apologize are you bringing with you a 1,000 of your relatives who speak no english and have no skill to help our economy out of this crisis? Are you illegally crossing America's borders? I doubt it, rather you are coming to America legally with skills that can help us be the strong nation we are and maybe possibly once were.

If we are in this crisis can you tell me how millions of un-skilled illegal immigrants who utilize our free systems and have no buying power is going to help make America's economy stronger?

"Give me your tired, your poor, your huddled masses yearning to breathe free."

To be fair, that poem was written when their was a shortage of labor, a surfeit of land, and no government-mandated safety net.

I'm confused about your fixation on state parks in these posts.

Why did going to a park cause you to come to these conclusions?

Well as an entrepreneur i am looking for safe spots on local rivers to rent kayaks and canoes.

Many proven safe spots are in state parks per my research. I haven't been to these same state parks since i was a kid - about 15 years ago. So when I went to check four different potential spots(each in various PA state parks) I was flabbergasted by each and everyones population - all hispanic.

I recall going to these parks back in the day and none were very crowded as they are now. Also, back then it was a melting pot of people enjoying the parks - black, white, hispanic, asian ... not just one culture and its not just a few families it's like 50 to 100 families on the weekends.

I guess that's what these posts are to point out .... that im flabbergasted(taken by surprise), dealing with racial tendencies i didnt know i had, as well my own selfish desire to create a business on these waters but can not due to this MASSIVE influx of immigrants getting in the way of this legal citizen's desire to build a business (i know u cant set up shop in a state park but there are ways around that point).

Im not hear to argue or to incite one ... im just here to point something that has taken me by surprise and learn to get over it. Maybe someone here has been to a state park recently and thought wow things are changing.....

I was born here and go to state parks all the time. Your comments do strike me as racist and xenophobic.

You say they don't offer anything to the economy but they come because people hire them and pay them. They do work that by and large we won't do. We pay them to watch our children, harvest crops, yardwork, day laborer, etc.

They do pay taxes and by some studies pay more then they get in benefits:

http://en.wikipedia.org/wiki/Economic_impact_of_illegal_immi... http://reason.org/news/show/122411.html

If you want them to speak English I'd suggest you quit voting for idiots trying to destroy the public education system.

Mexican immigrants are likely to be descended from Native Americans to a much greater degree than white Americans.

Unless my education has badly failed me, the Native American cultures don't individually or collectively form much of the basis of US culture. They were here first, but the European Americans did a pretty thorough job of minimizing their influence.

What do you refer to when you speak of State Parks?

The article says "Close to $2 of every $10". No need to editorialize it.

God forbid anyone reduce a fraction!

The fraction reduction seems inflationary.

Reading this thread you'd think the difference between 20% and 19% is as great as life and death.

you're right, it's probably only a couple billion dollars.

This reminds me of that experiment where subjects who got $10 (or something) if they picked a red jellybean, preferred to pick from a bowl containing 7 red jellybeans out of 100 rather than 1 red jellybean out of 10, because they figured there were more red jellybeans in the first one. Some of them said they knew they were being irrational and then picked from the first bowl anyway.

Yes, this is a real experiment.

Apparently the concept of reducing a fraction is as genuinely foreign to Muggles as the concept of "well, if it's irrational maybe I shouldn't do it then".

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