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.

 

If that were the case, with as many people who are on some form of welfare/entitlement program, wages should be BOOMING. That's not the case. At all. And giving money to the bottom of the labor force, most of whom don't know jack about managing their money and easily go into debt, is certainly not a stimulative effect. Unless you call going into credit card or some other form of debt stimulative. 


 

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.

 

There is already a problem with folks who have been out of work for so long. They either don't see the point in going back since they can still collect money without doing much of anything for it, or they've been out for so long their skill set is no longer useful or they're considered 'too old' to be hired. Heck, my stepsister was laid off from her job several years ago and it took her at least 3 years to find another one. With her experience no one wanted to hire her because they were afraid that, with the right offer she would jump ship, so she had to live on severance pay and social programs until her current employer hired her. She could have stayed on social programs for awhile if she wanted but that's not how she thinks. She doesn't want to depend on the government for her 'paycheck' and no one should.


 

There are many reasons why a social welfare system is bad news. It makes people who have no ambition or drive anyway very lazy and ingrains an entitlement attitude.