Food Stamps on the Rise and Beneficial to the Economy?

April 26, 2010

The Cato Institute’s “Downsizing The Federal Government” Web site has recently posted the following graph showing the increase in users of government food stamps and the amount of money spent on the program:

Obviously during a time of economic downturn with higher unemployment, the use of this program would be expected to spike. However, Cato notes that benefits have also expanded.

The report also points to a recent Fiscal Times story that quoted a Center for American Progress staffer arguing that “For every dollar invested in [the food stamp program] over $1.84 goes back into the economy.” Rightfully, the Cato report points out the obvious that every dollar “invested” in food stamps represents a dollar taxpayers couldn’t spend to stimulate the economy — negating that fallacious argument.

More on the Compensation Disparity

January 11, 2010

The Cato Institute‘s latest Tax and Budget Bulletin notes the continued disparity between government and private-sector compensation. Here is an interesting table from the report:

Free of competition and the need to actually turn a profit, government continues to act oblivious to the economic realities around us. The disparity in compensation is particularly troubling in this  time of economic downturn, as I have noted in several previous posts.

Government v. Private-Sector Compensation

November 3, 2009

Earlier this year I wrote about government employee benefits in Florida outpacing private-sector benefits — particularly noteworthy in a time of recession. Now comes an interesting analysis comparing average federal government wages and total compensation to those in the private sector.

 In an update from a previous post, the Cato Institute‘s Chris Edwards notes the following:

The new data show that average federal compensation is now more than double the average in the private sector.

Here is his graph displaying the average difference since 2000:

He also created a graph comparing just the average wages. He used data from the U.S. Department of Commerce’s Bureau of Economic Analysis.

In a time of economic downturn, the stark contrast between the government and the private sector is a bit worrisome — especially to those recently experiencing pay cuts or a layoff. But government doesn’t often face the same pressures as the private sector. It isn’t required to be competitive in order to stay in business; it can simply raise taxes or print or borrow money.

Ironically, all of that taxing, printing and borrowing in one way or another reduces private investment in things like jobs and higher compensation packages. Taxing takes that money directly. Printing reduces the value of that money. Borrowing diverts that money and eventually leads to higher taxation or more printing.

Insurance Mandates

October 9, 2009

With the prospects of a public (read: government) option losing momentum, another aspect of health-care “reform” is gaining more attention: an insurance mandate. The Senate Finance Committee bill requires that individuals obtain health coverage that meets government-approved “minimum required benefit” standards or face a tax that could be as high as $750.

Here is an excerpt on the “excise tax” from the current version of that bill:


Summing up the problems with such government mandates, a Cato Institute briefing paper from Michael F. Cannon states the following:

Compulsory health insurance could require nearly 100 million Americans to switch to a more expensive health plan and would therefore violate President Barack Obama’s pledge to let people keep their current health insurance. In particular, the legislation before Congress could eliminate many or all health savings account plans. Making health insurance compulsory would also spark an unnecessary fight over abortion and would enable government to ration care to those with private health insurance.

In addition, such an ill-conceived mandate would be a boost to private insurance companies who would see their customer pool greatly increase. Individuals not wanting to pay the fine would reluctantly sign up for health insurance thanks to the paternalistic nudging of the government.

A Year of Bailouts

October 3, 2009

A year ago is when the whole flawed — and unconstitutional — government bailout frenzy began under the Bush administration with the Troubled Asset Relief Program (TARP). This pie chart shows where the money has gone so far:

After TARP came the auto bailouts, the “stimulus” package, Cash for Clunkers and many more dubious and economically flawed government programs to help “rescue” our economy — all under Obama. But this graph tells a lot about whether these programs helped save the economy:


The actual unemployment rate has risen well beyond the White House projections for both with and without the recovery plan. Thanks for all your help Washington!

You would think reason would tell politicians to leave things alone from now on. But to ask a politician to listen to reason is typically a complete waste of time — almost as much a waste of time as these bailouts were.