Beyond helping Americans in need, economists say that programs like unemployment insurance and food stamps generate high returns on investment, especially during recessions. According to data from Moodys Analytics, every dollar spent on a temporary increase in food stamps contributes another $1.67 to the economy. A buck of extended unemployment kicks in $1.49. Compare that with the impact of a corporate tax cut—32 cents on the dollar. Using the deficit for something like unemployment insurance—thats a multiplier—is a good thing, says Josh Bivens, the director of research and policy at the Economic Policy Institute. Theyre shock absorbers, not bad things. Unemployment benefits tend to get spent right away on needs like groceries, for example. Chad Stone, the chief economist at the Center on Budget and Policy Priorities, explains that as long as you dont raise taxes or cut spending from other programs, this type of spending trickles up, giving the overall economy an added boost.
Posted on: Fri, 31 Jan 2014 17:25:34 +0000