Welfare for the poor has as much cantillion effect as welfare for the rich. In both cases, it uses fiat money creation to leech from the productive and unbinds cultural regulation of ethics.
Discussion
Not quite. Canillon effects are strongest at the point where money enters the economy. In our system, new money enters through the banking sector. If there were no taxes and all government spending was freshly created money, then you'd be right. Welfare spending still has Cantillon effects, but they aren't as strong, because they're a few steps down the chain of events.
How so? Welfare money for the most part comes directly from the federal budget, which for the most part is created with government taking out loans to cover the budget. They are also the worst kind of loans, ones with principal that will never be paid and this contributes directly to inflation. This mechanism is no different than government contractors, accepting at least the contractors develop technology on the back of inflation. The best we can say welfare produces is more population, though not enough to sustain prosperity.
