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theprof00 on 02 August 2012
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Kasz216 said:
theprof00 said:
 

 

2nd bold, I spend maybe 2 bucks a week on welfare if that. That money would likely go to buying a single ride on the train, or a pack of gum, or a soda. Instead, when it gets lumped into welfare, that 2 dollars becomes a 90$ pair of shoes for someone else, or a 300$ tv. My 2 dollars cannot support industries with products at a higher level than 2$, so, for example:e difference is that instead of giving the extra to the rich, we're giving it to a different class, who likely buys different items.

What happens to that $2 (and for that matter a bunch of other 2 dollars from other people) once you've bought the gum?

The answer is... it gets bundled together... just how you'd have government do.   The difference is... the company gives you gum.  Governmet gives you nothing.   GDP grows, because gum has been produced and you purchased it.

This is partially why the study you unknowingly cited, comes to the conclusion that government spending in general (not just welfare) is bound to cause a loss in GDP growth.

but it does build something, it builds economy in poorer areas, keeps people in poorer areas content and buying more infrastructure, like satellite dishes. It gives companies a reason to branch into those areas because they become affordable. It grows small businesses in that area, which leads to new development projects and new buildings and when offering greater diversity of businesses, it attracts developers. Many of these poor areas are in havens near cities. As the wealth of that area grows, younger professionals and entry level people start renting in the area. Eventually these poor areas become yuppie developments. Growing up poor I've seen it happen firsthand in several townships around boston, like Everett, Malden, East Boston, Jamaica Plain, The back bay. These were all once just poor neighborhoods and as spending in the area increased, which was unlikely to occur for people living out of town and not crossing the tracks so to speak. That's my opinion of it anyway.

So yes, while the gum would send money to people owning the business and working there, it instead tends to support people who don't live or spend in these areas. As area develops, it expands the city. More and more developers and businesses are willing to expand into these areas, set up new buildings, etc. A good example is new york city's greenwich village, and someday soon, the bronx.

More people in and with access to the city and businesses means more businesses can support their infrastructure with workers. It cuts down on travel and commuting, saving traffic and road maintenance, etc.

Sure it's debateable, I'll agree that perhaps there is a net loss (haven't got the full picture yet), but I don't either see it as simply a waste of resources to provide people the ability to buy products freely.