What Is Seen And What Is Not Seen.

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Frederic Bastiat was an economist in France during the mid 1800’s. His essay, That Which Is Seed and That Which Is Not Seen, starts like this: “In the economy, an act, a habit, an institution, a law, gives birth not only to an effect, but to a series of effects. Of these effects, the first only is immediate; it manifests itself simultaneously with its cause – it is seen. The others unfold in succession – they are not seen: it is well for us if they are foreseen. Between a good economist and a bad economist this constitutes the whole difference……the bad economist pursues a small present good, which will be followed by a great evil to come, while the true economist pursues a great good to come, at the risk of a small present evil.”

SEEN AND UNSEEN CONSEQUENCES OF FOOD STAMPS

I read this article titled, American Dependency (And The Third Day Of The Month Effect), by Rory of  The Daily Coin at zerohedge.com, about the growing number of people, {almost 50 million} on food stamps, and Bastiats essay immediately came to mind. What is seen is the supposed benevolence of politicians and bureaucrats helping hungry people get food for their survival. What is not seen is the abuse of the system by people who don’t need assistance but take it any way, and also what happens on the retail, whole sale, and administrative side of this equation.

Must See Video!

UNSEEN INCENTIVES FOR THE CONSUMER AND PRODUCER

Under this program people who qualify are able to use their debit card to purchase things other than food, like cigarettes, booze, and lottery tickets. They can also sell these cards for cash to fund other purchases. People who qualify for the food stamps, but don’t need them, can use the money they would have spent on food every month to purchase anything they want. The woman in the video paid $9,000 for breast implants while she was getting $700 a month in food stamps.

Grocery stores and convenient stores are benefiting because of the increase in sales brought about by the food stamp program. The Snack Food Association, and the American Beverage Association represent whole sale companies like Coke, Frito Lay, Pepsi, Sunny Delite, and Nestle to name a few. These associations lobby Government for the food stamp program to offer as many choices to the consumer as possible, which of course means these companies products. JP Morgan Chase makes millions being the administrator of the debit cards used for this program. I’m sure big agricultural companies lobby for this program just like they lobby for ethanol mandates.

This is what happens when “good” politicians {bad economists} pursue a small present good”. The unforeseen incentives that are created, unleash a chain of actions that increase the demand for the Government program. The consumers, the suppliers, and the Government administers of the program all have a similar incentive, which is to grow the program.  When there is a pile of tax payer dollars to be spent, the line of people who are trying cash in stretches for miles. The food stamp program is welfare for people and companies at every level.

CONSUMPTION PAID FOR WITH COUNTERFEIT MONEY

Food stamps are just another way our Government counterfeits money. The “dollars” on these debit cards are just numbers put into a person’s account by a key stroke on a computer. Since the Government borrows 40 cents of every dollar it spends, 40% of the numbers printed into these accounts don’t exist. The government will eventually borrow the money, the Fed will purchase the debt using electronically printed counterfeit money, the Fed will continually roll over the debt when it comes due, and you and I will pay for 60% of this consumption through direct taxation, and the other 40% through the hidden tax of inflation. When do we pass the point of no return, or have we already passed it?

 

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