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December 09, 2010

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We're not mentioning that, Gary, because Duff's point of contention appears to be that the Senate does not proportionately represent the people.

Which is true, but irrelevant, IMO.

Some reasons, other than the recession, for the growth in food stamp enrollments:

• The Department of Agriculture has been campaigning to boost enrollment rates. In 2000, only about 50 percent of those who were eligible were enrolled.

• Transition to electronic benefit transfer (EBT) cards.

• In many states, participants in Temporary Assistance for Needy Families automatically qualify for food stamps even if they don't qualify otherwise.

• Food stamps (Supplemental Nutrition Access Program - SNAP) enrollment is being pushed hard as an economic stimulus.

Tom M.: Oh, my, much more naive than I thought.

Dude, I was pointing out that if the first words in the names of the bills were related to their purported effect on growth and jobs, it is pure revisionism to claim that they were not sold on that basis.

They were in fact the primary policy - in fact just about the only policy - of the Bush years directly aimed at economic growth.

That they were also sold as "YAY FREE MONEY!" does not make it untrue that they were sold as policies for economic growth. Everyone loves free money but they are sensibly suspicious of it as a general policy. Which is why the story about them being a boost to growth that would magically pay for themselves was put out at the same time.

I'm not sure in what way I'm supposed to be "naive" in recalling - I was, you know, present at the time - that these bills were sold as boosting economic growth and offering as fairly straightforward evidence of that the fact that their names included the words "growth".

What next? Ten years from now the claim that ARRA was aimed at economy recovery as evidenced by the word "recovery" appearing in its name will be claimed as "naive"? Resorting to facts to support claims is now evidence of naivete?

CharlesWT, those are points worth making, but the most recent figures I could find (from 2007) suggested that enrollment rates had only increased to 66%. Even if they're somewhat higher now, that isn't enough to account for much of the rise. (e.g. if in 2001 50% were enrolled, that makes the overall eligible rate then 12%; if 66% are enrolled now, that makes the overall eligible rate about 21%)

(On the Senate conversation, I just don't have a lot to say myself. I am not discouraging it. Supermajority requirements make stalemate a stable strategy as the minority side remains 20 votes from being able to propose something that will pass, while still able to block anything the majority wants. That's why majority-vote systems evolve in the first place. The decision to maintain a supermajority rule is essentially a decision to be completely unable to resolve anything that is an actual hot political issue - it is completely nuts. It is clearly also convenient for a lot of lazy Senators who would be rather be fundraising than put their name to any actual legislation.)

Some CBO facts.

In 2001, the top 10% of earners paid 50% of total federal taxes. The top 1% paid 22.7% of the total.

In 2007, as a result of the Bush tax cuts, the top 10% of earners paid 55% of total federal taxes. The top 1% paid 28.1%.

Generally, lower tax rates have a stimulative effect on the economy, so I conclude that there are other factors for the higher percentage of people on food stamps. But, since our federal budget is structurally imbalanced, we do need to seek ways to increase revenues. This is why I agree with Obama that tax rates should increase for incomes over $250K a year, which makes me a bad Republican.

The Senate was, and is, designed to protect the various states from the tyranny of the densely populated centers.

By, apparently, subjecting densely populated centers to the tyranny of various states.

Charles, the increase in the percentage of total federal taxes paid by the top 10% and top 1% from 2001-2007 is not because of the Bush tax cuts. The way you present the data makes it look like Bush made the income tax rates more progressive when the opposite is true. From 2002-2007 the top 1% saw their incomes increase by over 60% and the top 0.1% saw an increase of over 90%, while the bottom 90% saw an increase of less than 4%. This accounts for the increasing share of federal tax payments from the rich.

Generally, lower tax rates have a stimulative effect on the economy

Is there any actual evidence for this?

It sort of makes sense on paper. If people have more cash, they will spend more. Economy stimulated.

But it's far from clear to me that it is true in fact in any kind of consistent way.

It seems to me that it is, at most, one of a broad spectrum of things that can, potentially, have a stimulative effect on the economy.

People don't always do what the textbook tells them to.

Generally, lower tax rates have a stimulative effect on the economy,

Very generally.

The idea, as Russell says, is to encourage consumption. The best way to do this with tax cuts is to direct the cuts toward the lower end of the income range.

Give a billionaire a $100K tax cut and his spending won't change much, if at all.

Give a thousand minimum wage earners a $100 tax cut each and the money will be spent.

It will also be spent if you don't cut taxes and give the money out as unemployment benefits. In fact, contrary to the claims of some conservatives, spending the money on unemployment benefits actually reduces unemployment.

Charles, the increase in the percentage of total federal taxes paid by the top 10% and top 1% from 2001-2007 is not because of the Bush tax cuts.

Not true, Mike. The cuts were greater in percentage in the lower income brackets than in the higher income brackets, meaning that the higher income brackets would be taking on a higher percentage of the tax burden. The math held up.

Is there any actual evidence for this?

I figure the CBO knows what it's talking about, russell. Quote:

All four of the options for extending the expiring income tax cuts would raise output, income, and employment during the next two years, relative to what would occur under current law.
The problem is that our government can't really afford them. And don't forget that the Obama stimulus bill included around $275 billion in tax cuts/incentives, under the premise that such a thing would stimulate the economy. It doesn't mean that tax cuts are the only way to stimulate, or the best way. But the point is, I don't think Jacob made his case on the relationship between tax cuts and the percentage of people taking food stamps.

'I think you got the wrong guy, GOB.'

I got to that statement while remembering that you don't acknowledge that states retain any sovereignty. Maybe you are correct, but I'm not aware that they actually relinquished sovereignty, even after the great civil conflict.

In any event, the constitutional design of the Senate in some sense preserves small state influence, even if it cannot be construed as sovereignty.

I agree with you on the rule, but I still have much unease about being able to move MAJOR legislation through all the required steps with no more than half the votes plus one.

And don't forget that the Obama stimulus bill included around $275 billion in tax cuts/incentives, under the premise that such a thing would stimulate the economy. because that's the only way he could get a sufficient number of votes.

It sort of makes sense on paper. If people have more cash, they will spend more. Economy stimulated.

"Sort of" is right. The claim was about "tax rates", not the aggregate level of taxes, but I have to say this anyway:

If The Government has more cash, and SPENDS it, that stimulates The Economy, too. Let's not kowtow to the right-wing meme that tax money somehow disappears from The Economy. That's only true(ish) when The Government is running a surplus.

We're so unaccustomed to government surpluses that it's easy to forget the mechanics of them. When The Government runs a surplus, it collects $3T in taxes from The Economy and spends $2T into The Economy. What happens to the other $1T? It's used to pay down debt; i.e. redeem outstanding bonds -- i.e. it's paid out to bondholders. (The Government has a large outstanding debt, in this example. But we're perfectly accustomed to that.) It's fine to say that The Economy loses $3T of private demand for goods and services, owing to the taxes, but it's necessary to add that it gains $2T of it back, thanks to the spending. Filling demand is what people get employed to do.

The tricky thing is the $1T of, let's be clear, cash that goes out to the bondholders -- who are themselves members of the private sector, please note. The very fact that they owned $1T worth of bonds means that they were saving that money. And that means they are less likely to "spend" their $1T in The Economy than the government employees, contractors, and transfer recipients are to spend their $2T.

So, in the fiscal year we're talking about, overall demand in The Economy is likely to fall. Not by the full $1T that is the size of the surplus, but possibly very close. A government surplus is an anti-stimulus.

Sorry about the ramble. I'm just trying to emphasize the point that government spending is demand in The Economy, just like private spending is. And demand is what "creates jobs".

--TP

The problem is that government spending has dead weight loss, which depending on who you ask is about 20-40% of the total spent.

Sebastian,

The problem is that government spending has dead weight loss, which depending on who you ask is about 20-40% of the total spent.

Could you go into some detail on this? My understanding of "deadweight loss" is a loss of welfare due to frictions in the market and the fact that markets do not usually conform to textbook examples of pure competition.

I wonder what the basis of your figures is, and how it compares with the similar losses in the private economy.

The problem is that government spending has dead weight loss, which depending on who you ask is about 20-40% of the total spent.

Well, you didn't ask me. I peg it at about 0.0001% for unemployment benefits, 99.9999% for defense spending, 5% for Medicare, and 1% for social security. State and local spending varies by the Corruption Index.

This analysis takes into account Pareto optimums, negative externalities, whose ox is being gored and has an admitted Hicksian bias depending on resultant income effects.

"I suggest you stop this kind of purity trolling, first of all."

I don't think "So what exactly do you suggest should be tried?" is purity trolling.

You presented commonly available information, that millions of words have been written about, Jacob.

Asking for follow-ups about what you think should be done seems entirely reasonble to me.

We should try something different. We all know that: what do you suggest?

That's an interesting question, if one doesn't already have answers.

What was it you wanted people to talk about after presenting some facts, other than what to do?

"I've written plenty about what I think should be done, but in this case I happen to be writing about the existence and scale of a problem without proposing a detailed and politically-plausible solution. Largely because this problem is not one with a single solution other than 'get a lot more people employed', which task can be accomplished in any number of different ways."

Skimming the rest of the thread, it appears to have gone on to entirely different topics, which is fine, but I'm left equally unclear as what we were intended to discuss.

"I've written plenty about what I think should be done,"

Which posts of yours would you like us to read? Links? I'll do the reading if you give the pointers.

I could go on to address all the varied subsequent topics people raised, but presumably you wanted us to discuss something as regards your post, Jacob: what was it?

It's entirely likely I'm missing what's perfectly obvious to everyone else, since I do that quite frequently.

Oh, what do I think we should do?

A negative income tax, guaranteed minimum income, and fully funded social services, which also includes revamping our entire criminal justice system, changing Senate rule 22, and a long list of other changes both to our political system, and the entire structure of a society based around consumerism.

And I can be specific. But that's where I'd have to start, unless we're proceeding from the bottom up, with specifics, and then expanding to more general cases.

It's not a hard question for me to answer: was that a start, or should we get into specifics, or what?

Give me a desired word count, and an actual specific question.

Present me with information that I know, and no question, and I'm left asking what the question is.

"Do you want to have a democracy or do you not want to have a democracy?"

I'd like a particular kind of democracy.

Urban voters are terribly under represented in the Senate. Rural voters are terribly over represented.

This is not going to change.

Could you be more specific about the time frame? I'm quite sure that in five billion years, it will have changed.

I'm sure that even in one billion years it will have.

I'm sure that even in one million years it will have.

I'm sure that even in one hundred thousand years it will have.

I'm sure that even in a thousand years it will change.

I'm pretty sure that even within 200 years it will have changed.

I strongly suspect that within one hundred years it will have changed.

I think that odds are reasonable that within fifty years, it will have changed.

Disagree with any of this, and if so, which one?

If not, now we're down to the trivia of debating how likely change will happen in which of the next five decades.

So: what timeframe is your declaration intended to apply for, since as stated, it's clearly untrue?

efg:

But the deepest root problem is: those most dependent are the least likely to vote.
Not the deepest root, but a crucial one.

If the unemployed, welfare recipients and/or food stamp recipients voted in the same proportions as we old, Social Security and medicare loving farts do, things might be different.
It would help a lot. More important would be to have the same amount of money as the rich, since money buys political influence and communications, which buys votes.

Of course, that's not going to happen, and I'm not proposing communism.

But political power in this country does not stem from voting in a vacuum, as I'm sure we all agree, and we don't have "one person, one vote" when money is such a huge factor in what actually gets voted on in legislatures.

Please note that I'm not asserting money is the controlling factor. "Huge" does not mean "controls."

Money alone will not buy an election, in most cases.

But it's always going to have a strong effect unless we have a rather different culture, economics, politics, and so on.

I don't want to change that too radically, although how radical or not something is is purely a matter of POV.

But acknowlegment and some agreement on how things actually work is a necessary starting place for discussions of how to move from reality to something we can get to, and what we can do about it within our lifetimes, and the next ten years.

I can go on addressing all the various wanderings of this thread, but it seems extremely rambling and all over the place, which is what tends to happen when posts without questions are presented. What were we supposed to be talkin about here?

Should I go on responding to various wandering points, or not bother, because it was yesterday's -- no, four day's ago's conversation?

Wait, there were no posts at all between December 9th and 12th?

Oh.

http://www.slate.com/id/2277405/

The story starts in the Clinton days, when welfare reform spurred the stigmatization of support programs from food stamps to welfare to WIC. The occasionally toxic rhetoric on welfare payments (remember Reagan's mythic welfare queens in pink Cadillacs?) sometimes found its target in the food program. Though President Bill Clinton supported expanding food stamp participation rates, his own Department of Health and Human Services boasted that new food stamp rules would promote the bipartisan goal of "ending the dependence of needy parents on government benefits." The Personal Responsibility and Work Opportunity Act of 1996—welfare reform—tightened eligibility rules. Between 1996 and 2000, with stricter rules and a booming economy, participation rates plummeted.

Fast forward two years. President George W. Bush appointed Eric Bost as his undersecretary for food, nutrition, and consumer services at the USDA, and the two went on a quiet crusade to expand eligibility, increase enrollment, and reduce stigma around nutrition aid. In 2002, for instance, Bush announced his support for letting legal immigrants apply for benefits, and he pushed the provision into the farm bill—granting about 300,000 more people eligibility at a multibillion-dollar federal cost. Bost also expanded the size of and outreach for SNAP, "reflecting the administration's commitment to the nutrition safety net"—no mention of welfare there. In negotiations around the 2008 farm bill, the Bush administration took a final, fateful step to reduce stigma and pull the program into the 21st century. The USDA officially rebranded food stamps as SNAP benefits, with a focus on nutrition rather than free food.

The cocktail of rising unemployment, stagnant wages, eased access to support programs, and purposeful destigmatization during the Bush administration meant that rolls swelled—from 17 million when he took office to 28 million when he left. That caused some consternation among conservatives. But the administration pushed back. "I don't have any problems with those programs growing, and indeed, they were intended to grow," Ron Haskins, a Bush adviser, told the Associated Press in 2007.

Yes, but also:

http://www.cnn.com/2010/LIVING/12/13/food.insecurity.holidays.middle.class/

More than 50 million Americans were living in a food insecure home at some point in 2009, including 17 million children, according to the U.S. Department of Agriculture. That amounts to one out of six Americans, the highest the government has reported in the last 15 years.

In contrast, before the recession in 2006, 36 million people lived in a food insecure household.

With unemployment near 10% and foreclosures ongoing, more Americans are relying on food banks, institutions that are usually regarded as a last resort, food security experts said. Feeding America, an organization of more than 200 U.S. food banks, fed 37 million Americans in 2009, nearly a 50% jump from 2006...

"Six year ago, when I started working here, I saw the cliche. There were people entrenched in poverty," said Ross Fraser, spokesman for the nonprofit Feeding America. "Well, that's changing. You have more and more people who have college degrees, who have become unemployed or underemployed."

jrudkis on December 13, 2010 at 01:31 AM:

http://www.slate.com/id/2277405/

Click here, anyone who wishes to read the full article Annie Lowrey, posted at Slate Dec. 10, 2010, at 2:15 PM ET, entitled "A Satisfying Subsidy: How conservatives learned to love the federal food stamps program."

Punctuation mine. Good piece.

Same same for Jacob Davies' December 13, 2010 at 03:17 PM link to Stephanie Chen's The new hungry: College-educated, middle-class cope with food insecurity posted at December 17, 2010 4:55 p.m. EST.

I also endorse. Apologies for brief hit and run ketchup.

Chen:

[...] In many states, families cannot have more than a few thousand dollars' worth of saleable assets.
A plurality, if not majority, of states use $2000 as the specific cut-off at present, and for the past decade.

Cites available if requested.

This

the percentage of the population using food stamps rose from 6% in 2001 to 14% today.

is disgusting.

It's actually a terrifically good thing, because this is largely the result of increased willingness by the current and previous administrations to significantly reach out to people who need food assistance, but have felt too stigmatized and ashamed to accept it.

There have been a tremendous number of articles about this in the past ten years, but let's go to Greg Beato.

[...] But the Great Recession isn't the whole story behind food stamps' second great awakening. The Department of Agriculture's Food and Nutrition Service (FNS) has been engaged in a lengthy campaign to boost the program's enrollment rates. In 2000, just 16.9 million people were receiving food stamps, and only 50 percent of those who were eligible even participated in the program. Then FNS and the state agencies that administer SNAP began streamlining application processes and ramping up their outreach efforts. By 2007, 66 percent of "eligibles" had been converted into participants, and preliminary data suggests that that percentage continued to increase in 2008 and 2009.

The growth of SNAP was driven partly by the transition from paper-based coupons to electronic benefit transfer cards, a process that was mostly completed by 2004. Convenient, stigma-free purchasing power such as this is just one the way government has been, in the words of Secretary of Agriculture Tom Vilsack, "breaking down barriers to participation" in SNAP. In theory, one cannot receive food stamps with a gross monthly income exceeding 130 percent of the poverty level, and a participant is ineligible who has "countable resources" such as bank accounts or vehicles that fail to qualify for certain exclusionary criteria.

But while the federal government sets these standards, it also gives states leeway for modification. Under a process known as "broad-based categorical eligibility," SNAP applicants in dozens of states are now automatically considered eligible if they're already participating in the Temporary Assistance for Needy Families program. Details vary, but categorical eligibility typically means applicants can have gross incomes of up to 200 percent of the poverty level, aren't subject to asset tests and don't need to verify their net incomes.

The FNS and state agencies have also implemented ways to increase monthly payments. Ultimately, a household's net income determines the size of its payment. But recipients can claim various deductions, including one for utilities allowed to be as much as $273 a month. According to federal guidelines, recipients can claim the maximum utility deduction regardless of how much they actually spend on utilities as long as they participate in the Low Income Home Energy Assistance Program. [...]

You say this is "disgusting." I'm curious if you speak as someone who has ever been helped by, or eligible for, food stamps/SNAP, or from a different perspective?

I speak as someone who has applied and used them a few times, but mostly not, because in the past, uh, it wasn't a barrel full of monkeys worth of fun to do so, even when one is counting pennies for a potato, and living on someone's floor, or otherwise being homeless, and especially not if you have mental illness that interferes with you coping with bulling through the process on your own.

I've qualified most of my life, and taken advantage of that a grand total of perhaps 12-15 months over, say, the past twenty years.

The last time was sometime in early-mid-2000s, for perhaps 3 months or so.

This isn't to say I disagree with Beato's critique at the end of his piece, or innumerable other criticisms of the system, or that I don't believe we should have a much more radical change, but still.

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