Few people understand welfare and its purpose. While the recipients certainly benefit from the various programs, so do businesses. Just ask a local grocer how much it would affect their business if SNAP (food stamps) were eliminated. Depending upon where the business is located, it could easily range from 10% to 50% of their total receipts, and that’s an average over business cycles.

During a recession, this can make the difference between keeping functioning supply chains or watching them collapse in a domino-like chain event that could tip a recession into a depression that is much harder to recover from. The various programs add federal money to the economy automatically when it is needed, countercyclical to the business cycle. We can talk about welfare queens driving new Cadillacs all day and not address the benefit of the safety nets to the larger economy and even the wealthy shareholders.

Waiting for Congress to take action to avert such collapses would be a massive joke and unlikely to be large enough and timely enough to avoid the damage. I’m quite sure the ’08 recession would have degraded into a depression and would be still ongoing if the programs weren’t in place at the time. When sales receipts drop states and local governments also suffer losses that filter down and take their toll.

The only entity that can mitigate those losses is the currency-issuing federal government that can afford anything that is for sale and priced in the dollars it creates without restraint from revenue. Once the people figure out how economics works at the currency-issuing level they will discover that “any” suffering in this economy is entirely a political decision, not economics, and that “their” money is not involved in federal spending it will change how we choose politicians.