If every $1.00 spent on umemployment puts $1.60 into the economy

[Live_Free_Or_Die]

How much money has to be stolen in taxation to spend $1.00 on unemployment?

[Distinguished Gentleman]

I'll have to look up the source, but I saw that if A: the stimulus dollar brings in 1.60 in GDP; and B: That stimulus dollar came from taxes, then you wind up losing about a dime in GDP.

This money tends to come from debt and is thus a loss to future GDP. Tax cuts bring in significantly more GPD, especially capital gains which encourages investment from around the world.

[Kludge]

At the end of the day, it all requires an unnecessarily-high level of production which can only be sustained through promoting materialism and high property taxes. The higher the GDP is boosted through means as this, the more people will need to work -- this would be fine for the USG -if- people on welfare want to work. A high GDP isn´t necessarily desirable.

[Distinguished Gentleman]

http://globaleconomicanalysis.blogspot.com/search?updated-max=2010-07-16T04%3A33%3A00-05%3A00&max-results=3

I didn't find the stimulus statistics, which I believe to be buried somewhere in the Cato blog, but I felt like I learned a lot from Mish's explanation of the jobs picture and how to improve it. Certainly better than make-work stimulus.

[Sentient Void]

I'd really like to hear more economics on this as well. I hear this all the time and know that it's based on fallacy somewhere and look forward to finally being able to debunk it.

Apart from the fact that you're just adding money to an economy without adding anything of equivalent value as well since nothing is being produced in it's place. Which eventually leads to inflation.

[jsu718]

I'll have to look up the source, but I saw that if A: the stimulus dollar brings in 1.60 in GDP; and B: That stimulus dollar came from taxes, then you wind up losing about a dime in GDP.

This money tends to come from debt and is thus a loss to future GDP. Tax cuts bring in significantly more GPD, especially capital gains which encourages investment from around the world.

I wouldn't necessarily classify unemployment insurance as taxes. Sure it is taken out of your check whether you like it or not, but it at least gets redistributed directly in your state rather than going through the federal govt slush fund from all of their combined theft. The extensions are federally funded, but the regular UI is not. In reality when people collect unemployment they are just getting back money that they paid in and keep it from being spent by the govt which in turn promotes smaller govt.

[noxagol]

If that were true, then why don't we just have everyone be unemployed and collect unemployment.....

[jsu718]

If that were true, then why don't we just have everyone be unemployed and collect unemployment.....

It's like a perpetual motion machine... only it keeps getting faster.

[anaconda]

Whoa that's a 60% return!!! I wish all government programs were that good....

[Distinguished Gentleman]

I wouldn't necessarily classify unemployment insurance as taxes. Sure it is taken out of your check whether you like it or not, but it at least gets redistributed directly in your state rather than going through the federal govt slush fund from all of their combined theft. The extensions are federally funded, but the regular UI is not. In reality when people collect unemployment they are just getting back money that they paid in and keep it from being spent by the govt which in turn promotes smaller govt.

I feel like we're not on the same page. Are you thinking of the payroll tax, instead of the capital gains tax? The payroll tax finances unemployment insurance. Capital gains is a tax on investments.