Wednesday, May 26, 2010

Two Articles of Interest

So there are two interesting articles noteworthy of mention in this week's BusinessWeek (May 24 - 30th).

The first is that France figured out that that high taxes on restaurants is bad for business because bankruptcies in the industry began to soar (p.16). So, the government decided to drop the VAT tax from 19.6% (!!) to 5.5%. So, what happened? The industry added jobs even though the general economy was losing them, and restaurant salaries are up an average of 5 percent. Obama, take note.

The second article of interest is that there are nearly 40 million people on food stamps in the US (p.33). That is not a typo: 40 million people! Are you telling me that over 10% of the population of this country cannot handle their own affairs and feed themselves? This tells me that the requirements to get such handouts is WAY TOO LIBERAL! People always downplay the significance of welfare/food stamps costs, but with a number that high, they should probably think twice. Reuters reports that it will cost nearly $60 billion this year for just the food stamps. Don't make the fallacy of thinking the number is not so bad by comparing it to the Obama deficit (fallacy of anchoring) - $60 billion is huge!

Also, in that article the author mentioned that many states can keep their welfare numbers artificially low by providing a three month lump sum instead of the usual monthly stipend. The states are not required to report them as being recipients if the lump sum is doled out.

A colleague of mine made an excellent suggestion today: anyone receiving government handouts should have to undergo a mandatory drug screening.

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