Quote:I just explained it, I'm sorry you didn't understand what I'm talking about.

 

When the labor force shrinks the price of the quantity of labor demanded necessarily increases, which has two effects.

 

First, it drives up wages for labor, which increases and distributes more widely spending power, and increased spending power creates a positive feedback loop that increases the marginal propensity to consume. In effect money given to people at the bottom of the labor force as the strongest stimulative effect on the economy.

 

Second, it increases the tax base. With wages increasing the federal tax base widens out, something Republicans claim they want.

 

Really, the only downside to a real social welfare system with no idiotic requirement to work or limit on benefits is the possibility of disenfranchisement for people who want to work but remain out of the labor pool for too long. Though I think adding more social welfare to make all public universities free to anyone straight up to PhD level would also fix that problem.

 

Sure if welfare wasn't being funded by the remainder of the working class and they where simply leaving the market and sustaining themselves your argument might have a leg to stand on. that's not the case, the welfare doesn't come from a magical government tree fund, it's funded through the taxation on the remainder of the working class. Welfare isn't the equivalent of older generations leaving the workforce to make room for new generations, your argument is flawed on so many levels it's to frustrating to get into.

 

It's not shrinking when people collect welfare over working, they're still being "paid" still have a net cost on the economy, they're just not producing anything.

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