That's right Ed, the folks on welfare living in section 8 housing and buying steak and beer with their food stamps don't benefit at all. It's the guys who work hard and earn it that have to be penalized for taking advantage of the system.
Well, it's the guys that sold the beer and steak to the recipients. And they bought the beer from, in some cases Cindy McCain. Steak came from Texas, Florida, Kentucky, Oklahoma and other states. Stockholders of Budweiser saw their stock go up because of that beer and commodity prices raised due to the steak [all on a macro level of course].
My dad used to say that you could take all the money in this country from every single person, put it in a single bucket, divide it EQUALLY among every person in the country and within 10 years the same people that originally had it will have it again. When I was 10 I didn't really understand that. Now I do.
The logic that social services money plows back into the economy is proved every time. Same with the Military Industrial Complex of the 1960s. It provided the growth that everyone enjoyed.
Where we DON'T get benefit is when we Deficit spend and our Revenues move offshore in the form of interest. Where we DON'T benefit is when our Trade Deficit is $5Trillion in goods and services that we send money out and do not get return.
Now, the question becomes, is it SMART to distribute in that fashion and that is where the difference lies. We have to be VERY specific and VERY systematic and regulated when we decide to enhance ANY social services programs "just" to raise the level. It is not an easy or particularly smart approach.