Video: Obama Ag Secretary says rise in food stamps is putting people to work

posted at 1:25 pm on August 16, 2011 by Ed Morrissey

Secretary of Agriculture Tom Vilsack told MSNBC’s Morning Joe that the Obama administration has a jobs program already in place — and it’s food stamps. When asked about new numbers that show one in every seven Americans now receiving food stamps from the federal government, Vilsack said that’s good news. Food stamps create jobs, Vilsack insisted, and managed to even come up with a new multiplier effect number:

So here’s the question. If food stamps create jobs, like Vilsack says here, and we’re putting record numbers of Americans on food stamps, then why aren’t we seeing record job creation? If every dollar spent on food stamps creates $1.84 in production, as Vilsack argues, and the number of food stamp recipients keeps rising, then why haven’t the GDP numbers reflected that fabulous growth?

There are two answers, the first of which is two words: opportunity costs.  The supposed multiplier effect does not take into consideration the cost of taking capital from the private sector, where it can be put to use for actual growth and job creation, for use by the government.  In this case, the opportunity costs have a heavy burden of interest, since we’re not taking money from current capital but from future capital, thanks to runaway deficits.  Not only does this make less efficient use of capital, it underscores the signals to investors that the US government will practice sharply confiscatory tax policies in the future, which stunts investment and produces … well, the stagnation we’re seeing right now.

The other answer?  The multiplier effect is completely bogus.  For one thing, much of the money gets absorbed by the government bureaucracies that manage these programs.  Second, as I alluded earlier, the evidence we see all around us shows us that we can’t get economic growth through government welfare programs.  If what Vilsack said was true, we’d be better off seizing all income and handing out food stamps.

There are good humanitarian and social reasons for safety-net programs like unemployment insurance and food stamps, but economic growth isn’t one of them.  The rise in both are indicators of failing economics.

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Tom Vilsack – another stupid ass from Team Barry trying to tell us that a pile of shit is actually steak.

GarandFan on August 16, 2011 at 3:02 PM

unbeEffingleavable

do any of these clowns have a clue?

food stamps creates jobs?

massive facepalm

DrW on August 16, 2011 at 3:05 PM

Surely they can’t be that stupid.

txag92 on August 16, 2011 at 1:31 PM

Sí puede¡

Shay on August 16, 2011 at 3:21 PM

Technically, there would be a net decrease due to spillage & expanded evaporation plus the net wated energy to move the water. Just saying.

Is that more of that global warming climate change crap?

katablog.com on August 16, 2011 at 3:24 PM

I was going to mention how glad I was that Iowa is responsible for Vilsack, (and not Nebraska) but then I remembered that my great state gave the world Ben Nelson. :’(

Cornhusker on August 16, 2011 at 3:29 PM

Unemployment insurance actually causes people to forgo jobs that pay less than the insurance. Making less employment.

And prevents the poor working stiff having to fork over that $1 from investing it as he/she sees fit!

katablog.com on August 16, 2011 at 3:29 PM

above should say: And prevents the poor working stiff having to fork over that $1.84 (since it takes $1.84 to make $1 of freebies)from investing it as he/she sees fit!

katablog.com on August 16, 2011 at 3:30 PM

Folks – his commetns arent for most Americans – his comments are to soothe the Dem voters on food stamps.

BY telling them they are valued and will eventually get “employed” – you are both creating a teate to suckle, and also a validation of their laziness.

Odie1941 on August 16, 2011 at 3:30 PM

Seriously? This is the best they’ve got? That’s absurd sophomoric logic. Middle school children understand this is a pant load.

Alden Pyle on August 16, 2011 at 3:43 PM

Odie1941 on August 16, 2011 at 3:30 PM

His comments are food for foder for the Obama masses – which thankfully have decreased but not enough.

katablog.com on August 16, 2011 at 3:43 PM

Ed, you are both wrong on this. I do this as a business and there are mathematical methods and algorithms that have been empirically studied over the years. For reference you can look at

http://www.bea.gov/scb/pdf/regional/perinc/meth/rims2.pdf

also http://implan.com/V4/Index.php

For government spending, the multipliers are almost always less than 1.

But there is science involved in economic impact analysis there is economic activity generated by government spending, but there is also almost always what is called a dead weight loss.

Your discussion about crowding our private capital has some value, but again, really the science does not have a lot of heuristics, the equations need to be run with detailed specifics. Clearly Vilsack does not know what he is talking about but it is helpful to actually run the numbers

georgealbert on August 16, 2011 at 3:46 PM

Remember, those Bush tax cuts where people got a $300 tax rebate. That totally didn’t stimulate the economy, though. If he had given $300 worth of food stamps instead, totally different.

lorien1973 on August 16, 2011 at 3:53 PM

Tom Vilsack – another stupid ass from Team Barry trying to tell us that a pile of shit is actually steak.

GarandFan on August 16, 2011 at 3:02 PM

NewSpeak: Shit is Shinola

BobMbx on August 16, 2011 at 3:54 PM

If food stamps create jobs and multply out $1 = $1.84, why aren’t we just issuing everyone tons of food stamps?

Obviously, we can make everyone wealthy and end the recession by issuing food stamps to everyone.

Monkeytoe on August 16, 2011 at 3:59 PM

Obama Ag Secretary says rise in food stamps is putting people to work

He’s right. Keeping people on welfare and foodstamps keeps Democratic legislators in their positions.

/Saving n Creatin’ jobs.

Just not for YOU.

Key West Reader on August 16, 2011 at 4:15 PM

Multipliers: a science significant two places past the decimal.

Or a farce.

theperfecteconomist on August 16, 2011 at 4:20 PM

Tom Vilsack – another stupid ass from Team Barry trying to tell us that a pile of shit is actually steak a streak (in America’s underwear.)

GarandFan on August 16, 2011 at 3:02 PM

chickasaw42 on August 16, 2011 at 4:25 PM

These people insult our intelligence. Do they have any idea how offensive they are saying stuff like this?

petefrt on August 16, 2011 at 4:31 PM

The supposed multiplier effect does not take into consideration the cost of taking capital from the private sector, where it can be put to use for actual growth and job creation, for use by the government. In this case, the opportunity costs have a heavy burden of interest, since we’re not taking money from current capital but from future capital, thanks to runaway deficits. Not only does this make less efficient use of capital, it underscores the signals to investors that the US government will practice sharply confiscatory tax policies in the future, which stunts investment and produces … well, the stagnation we’re seeing right now.

It’s paragraphs like this that make Ed Morrisey the James Bond of bloggers.

Men want to be him, and women want to be with him.

JohnGalt23 on August 16, 2011 at 4:56 PM

Just think of all the economic growth we could stimulate by putting half of the Government on food stamps.

stevezilla on August 16, 2011 at 5:23 PM

I’m beginning to think Krugman’s “alien invasion” has already started…

cnredd
Political Wrinkles
http://politicalwrinkles.com

cnredd on August 16, 2011 at 5:27 PM

Surely they can’t be that stupid.

txag92 on August 16, 2011 at 1:31 PM

“Don’t call me Shirley”…Vilsack

right2bright on August 16, 2011 at 5:27 PM

hummm… yes, but I have it on good authority that spot is taken.

It’s paragraphs like this that make Ed Morrisey the James Bond of bloggers.

Men want to be him, and women want to be with him. the first mate stands proudly by him.

JohnGalt23 on August 16, 2011 at 4:56 PM

Franklyn on August 16, 2011 at 5:40 PM

Awesome!

With four more years of Obowma, we’ll all be on food stamps stimulatin’ the economy.

Liberalsim ALWAYS generates the exact opposite of its stated intent.

dthorny on August 16, 2011 at 6:14 PM

remarkable how so many ppl just overlook facts merely to spew bull shit they like

georgealbert on August 16, 2011 at 10:08 PM

Tom Vilsack used to be the respectable former Governor of Iowa…

Gohawgs on August 17, 2011 at 12:56 AM

Tom Vilsack used to be the respectable former Governor of Iowa…

Gohawgs on August 17, 2011 at 12:56 AM

Obama knew he had picked a winner when Vilsack showed up for work with his own set of monogrammed knee pads.

Extrafishy on August 17, 2011 at 5:43 AM

The idea, i believe, is to eradicate the middle class. Everybody is on the dole, the former middle class and the poor. That ensures democrat votes. You have to vote for the party that hands out your food. The wealthy will be left for the government to plunder to pay for our subsistence. This is the goal of socialism. This has to be the basis for this kind of thinking. I hope i’m wrong, but i’m a pessimist.

abcurtis on August 17, 2011 at 11:28 AM

Correct me if I’m wrong, don’t my taxes pay for food stamps? So, the money has been taken from me before it’s “allegedly” created 1.84 dollars in revenue.

dthorny on August 17, 2011 at 8:52 PM

This man is a criminal liar, and he knows it, as are all who agree with him.

proconstitution on August 17, 2011 at 10:02 PM

Comment pages: 1 2