Thanks Larry Ray Davis 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. However, that idea has lost currency, Bivens says, because the politics are more divisive than theyve been for a long time. Some Republicans have argued against extending federal benefits programs, citing the deficit. But that argument doesnt hold up, Bivens explains, because the growth of public spending is at a historic low: Were undertaking unprecedented austerity on the budget side. (More on the austerity effect here.) To see how spending in emergency unemployment benefits compares to other programs and tax cuts, see the chart below: motherjones/politics/2014/01/unemployment-benefits-food-stamps-economic-impact
Posted on: Tue, 04 Mar 2014 00:58:36 +0000