First they came for the Socialists, and I did not speak out....

How lucky are we that we're getting this lesson for free?

 

I would think avoiding torches and pitchforks would be seen as a public good. As far as SNAP not allevating any social problems, imagine what happens when you have millions of people going hungry. Then you'll see a real social problem.

 

Oh, and as for as AOL's abortion of a CEO, he just flip-flopped on the 401K. They're back to the pay-per-period method:

http://recode.net/2014/02/08/aol-reverses-401k-policy/

 

While I appreciate the nod, as you can see in the links below, I can't claim credit for Big Food any more than I can for Big Pharma or Big Oil, and I find it odd that you are unfamiliar with a prefix that is threatening to overtake the the suffix "-gate" in prevalence.

http://hbr.org/2013/05/should-we-break-up-big-food/ar/1

http://www.politico.com/story/2013/12/big-food-anxious-for-new-rules-in-fda-pipeline-100510.html

http://www.usatoday.com/story/money/business/2013/09/12/chipotle-big-food-millennial-marketing/2798023/

Even if you are unfamiliar with term "Big Food", I'd think your contextual reading abilities would be advanced enough to understand the usage. Something tells me you are familiar with the terms "Big Government" and "Big Labor." Drawing on your knowledge of them, I would think you could almost intuitively come up with a rough working definition of "Big Food" as "Food corporations whose size endows them with significant influence on the lives of Americans as well as fiscal policy that guides the country."

I've isolated this passage because it is where you introduce a red herring (I did not invent that term either). You spend most of the rest of your time arguing this point, which I never made. I've noticed it is a common error in reasoning for you. Rather than debating the substance of an argument, you attempt to redefine the argument so that it fits neatly into one of the boogeyman templates that opposes the point of view you want to express.

Anyway, I'm actually a bit surprised to hear your demand side argument. I fingered you as a supply side trickle-downer. I agree with your assessment that consumer demand for food is an important variable in the economic equation, and nothing that I wrote was intended to suggest that the elimination of the SNAP program would diminish demand for food (if you can cite specific passages that lead you to the conclusions you draw, that will greatly enhance your argument).

My argument had nothing to do with aggregate demand. Rather, it has to do with the fact that the examples you cite as redistributions of wealth are nothing of the sort, wealth being the key word. There is a difference between income and wealth. The programs you cite as redistributions of wealth are actually redistributions of income. You might think the difference a semantic one, but people like our friend Richard W. Rahn at the Cato Institute disagree, because people like our friend Richard W. Rahn are economists, and this is what economists believe (See: http://www.cato.org/publications/commentary/confusing-wealth-income).

Nope, as I said before, I was not suggesting anything of the sort. Now, a question from me: Why even ask whether I was "really suggesting" something when you have already decided that I was, because to decide otherwise would limit your ability to make one of your boilerplate arguments and instead require you to perform some actual critical thinking? Hey, it's just a question.

See above.

This stuff is not that hard to look up. Per the Heritage Foundation, the USG spent $927 billion on social safety net ("Welfare State") programs in 2011, when the GDP was $15.99 trillion. So, to answer your question, about 6.2 percent of GDP. In 2013, the entire combined budgets for DHS and Dept. of Ag. were about 7.1 percent of GDP (See: http://budget.house.gov/uploadedfiles/rectortestimony04172012.pdf)

It is not a double-digit number, unless you include the number after the decimal point.

You got one right. http://www.heritage.org/research/reports/2013/08/federal-spending-by-the-numbers-2013

Kudos for arriving at a point I actually attempted to argue. It is too bad that you did not read the research paper that you linked to, because it raises the same issue that I raised, which, from my perspective, puts it somewhere near a discussion about redistribution of wealth.

From pp. 14-15:

For example, how should spending on public goods such as national defense be distributed across income groups—on an equal basis, according to income, or some other variable like wealth?...high-income people are assumed to derive more benefits from national defense than low-income people…The benefit of a spending program for a family is how much the family would (hypothetically) be willing to pay to keep that program in existence.10 For example, under the benefit principle approach, national defense is distributed to each family based on each family’s share of the nation’s income, as it is assumed that high-income families would be willing to pay more for national defense than low-income families.

You suspect wrong. My notion is exactly what I said it was: defense spending benefits the rich far more than it does the poor. This is common sense. There's the obvious demand aspect (i.e. the military-industrial complex; the paper you linked assigns an equal benefit to all households of $4,295 from defense spending; seems a bit low for a household like, say, that of the CEO of Lockheed Martin with its $30+ billion in gov't contracts). But there are also aspects that are much more difficult to define. How much value does a landowner derive from a strong national defense compared to a renter? A rural subsistence farmer versus Jamie Dimon? A multinational corporation versus a small business? How much money did the US Military spend freeing Captain Phillips? How much does it spend to secure shipping lanes for multinationals? Who benefits from all our spending on the Saudis? From our presence in the Middle East? Look at the history of the naval powers since the 18th century. They exist primarily in order to safeguard existing markets and open new ones.

Not pertinent to my post.

Since you don't cite a source, I'll stick with mine, which says $689 billion. http://www.cbpp.org/cms/index.cfm?fa=view&id=1258

Anyway, I'm going to re-state your original point for you so that it fits the context of the topic at hand. My argument is that SNAP does not redistribute nearly as much "wealth" as you contend because many of the people who possessed the "wealth" that was redistributed end up getting a portion of it back because they profit off of said redistributed wealth in the form of demand. There is a reason why the "junk" food lobby has fought so hard to prevent changes to SNAP aimed at improving the dietary choices of aid recipients (http://www.eatdrinkpolitics.com/wp-content/uploads/FoodStampsFollowtheMoneySimon.pdf).

According to the Wall Street Journal, about 18 percent of all SNAP dollars are spent at Wal-Mart, the equivalent of about $14 billion per year in revenue for the retailer. So what is the net redistribution for Wal-Mart execs and major shareholders? That's my point.

The USG takes $75 billion from the entire population and, at least theoretically, gives it to the poorest segment of the population. The poorest segment of the population gives the $75 billion to retailers, who take their cut (a two percent profit margin would yield a profit of about $1.5 billion), and then split the remaining $73.5 billion between labor and distributors. Distributors take their cut and then split the remaining money between labor and manufacturers. Manufacturers take their cut and then split the remaining money between labor and investment. All of the labor beneficiaries spend their cut of the money on goods and services, many of which are produced by wealthy corporations. And the cycle starts all over again.

In other words, the SNAP program does not "redistribute wealth." It just makes sure that a certain amount of money makes a pit stop in the refrigerators of the people who, theoretically, most need food.

 

So true.

 

Per your source/ciphering (which sound reasonable to me), $14 billion of Walmart's revenues were SNAP-spurred. We don't (and really can't) know the degree to which those SNAP-spurred revenues crowded out other revenues, but I'm willing to assume they didn't. Further, I'm willing to assume that $1 from a SNAP customer is roughly equivalent (cost- and profit-wise) to $1 from a non-SNAP customer. Now, over that annual timeframe Walmart had $470 billion in revenues. So SNAP revenues were close to 3% of Walmart's total revenues. On those revenues, Walmart posted a net income of $17.8 billion. Thus, given those assumptions we made above, Walmart shareholders' net profit was boosted about $500 million.

Now, of course, those Walmart shareholders had to also pay taxes on that net income (whether manifested in dividends or capital gains). So they've paid twice -- the $7.9 billion they paid indirectly via federal and state corporate income taxes, plus their personal tax on dividends and/or capital gains. I'm not in a position to extrapolate as to what the average marginal tax rate Walmart's shareholders face, but you can bet your sweet bippy it's damn well north of 3%. Therefore, the assertion -- even the mild implication -- that somehow SNAP-related spending enriches, on net, Walmart's shareholders is ludicrous.

 

The best I understand it, he's arguing semantics. He's arguing that it's a redistribution of income, not a redistribution of wealth.

 

3.89 percent of each person's tax bill went to fund SNAP, according to WhiteHouse.gov (http://www.whitehouse.gov/2012-taxreceipt). Not clear on the relevance of overall effective/marginal tax rate.

 

Poor widdle babies.